Services to Investment funds' depositories
The Law of the Republic of Azerbaijan “On Investment Funds” determines the organization, management and liquidation principles and rules of investment funds, as well as the legal and economic basis of regulation and supervision of investment fund activities.
An investment fund is a financial institution dealing with collective investment activity. Safekeeping of the stocks (shares) of the investment fund, keeping records and affirmation of the rights and encumbrances, as well as the safekeeping of the managing assets of the investment fund and related documents are carried out by the depositories of the investment fund unless otherwise provided by the legislation. The depositories of the investment fund, which shall be the members of the central depository, form the depository system together with the central depository and the investment companies.
Pursuant to the Law of the Republic of Azerbaijan “On Investment Funds”, the central depository carries out the registry of the investment funds’ shareholders. The central depository also opens a correspondent account in each currency for every depository in accordance with the “Rules for account opening, maintaining and money transfer by investment fund’s depository”.
In case of liquidation of the investment fund’s depository, the investment fund manager concludes a temporary arrangement with the central depository on depository services until the selection and approval of the new investment fund’s depository. Accordingly, the funds of the liquidated depository are transferred to the central depository’s account (indicating information on the balances of each investment fund).