As of today, Kyrgyz companies cannot publicly issue securities to attract investment. Own sources informed 24.kg news agency.
The situation was caused by personnel decisions of the Government. Recall, Sanzhar Mukanbetov left the post of the Chairman of the State Service for Regulation and Supervision over Financial Market in May 2019. He became a Minister of Economy. A new head of the state service has not been appointed so far, therefore there is no quorum of the executive board of the service.
This has affected the financial market. For the public issue of securities and their placement, they must be registered at the State Service for Regulation and Supervision over Financial Market. The decision is made by the executive board. Moreover, there is a requirement that a quorum of the board is needed for eligibility — at least five members must make a decision.
As of today, there are only three members of the executive board — the deputy chairman, he is the acting chairman, and two members.
A quorum for making a decision on registration of public issues of securities is not secured. As a result, companies cannot register securities at the State Service for Regulation and Supervision over Financial Market and issue them into circulation in order to attract investment in the stock market.
«Due to the inability to publicly issue securities, the Kyrgyz stock market is stagnating. The market is already poorly developed, and such unpleasant situations also hamper its development. In addition, the population does not have an opportunity to invest in publicly issued securities, which are often more attractive than, for example, deposits in banks,» market participants told 24.kg news agency.
Back in August 2019, they asked the Prime Minister to solve the problem. However, the letter was forwarded to the State Service for Regulation and Supervision over Financial Market for some reason, although the chairman and members of the executive board are appointed by the head of the Cabinet.
The state service replied that securities issues would be resolved when the quorum is secured. However, date for its meeting is not set.
«In October, we sent a second letter to the Prime Minister with a request to solve the problems. There are no shifts. This situation jeopardizes the Kyrgyz stock market. There are companies that can not carry out public issues of securities for several months. As a result, the popularity of the stock market is falling due to the regulatory body. Companies lose their desire to attract investment in this way,» professional market participants believe.