Title: Central Bank of Armenia Takes over Financial Regulation and Supervision: Uniform System Introduced
Overview
The Central Bank of Armenia has taken on new regulatory and supervisory roles, marking a significant shift towards a uniform system of financial regulation and supervision in the country. This move aims to boost trust and stability within the financial system and promote unhindered growth for its participants.
New Law and Transferred Powers
- December 8, 2005: The new Law on Introducing a Uniform System of Financial Regulation and Supervision in the Republic of Armenia was adopted, outlining the steps to transfer regulatory functions from various bodies to the Central Bank.
- January 1, 2006: The Securities Commission was liquidated, and its functions related to securities market regulation, reporting issuers, and self-regulatory organizations were assumed by the Central Bank through legal succession.
- Regulatory functions: Insurance activities, pawn shops, and cumulative pension insurance organizations’ regulatory functions were also taken over by the Central Bank.
Key Concepts
- Financial system: The new regulation covers a uniform financial regulation and supervision framework.
- Other participants of the financial system: Other entities and individuals involved in the financial sector.
- State competent body: The central authority responsible for financial regulation and supervision.
- Secondary legislative acts: Laws and regulations that are subordinate to primary legislation.
Objectives
The primary objective of the reforms, as stated in Article 4 of the law, is to create an independent, effective, and unified consolidated supervision and regulation system. This system aims to:
- Ensure smooth financial system operation
- Protect consumer rights
- Promote financial institutions’ sustainable growth
Law Details
- Key articles: Article 1 defines the scope and content of the new system, and Article 4 sets the primary objective.
- Secondary legislative acts: These remain valid until January 1, 2007, and the Central Bank is empowered to make necessary adjustments or amendments to these acts before the deadline.
Implementation
- December 22, 2005: President Robert Kocharyan signed the law.
- January 1, 2006: The law comes into force ten days after its official announcement.
Clarifications
The Central Bank is tasked with providing official clarifications related to the application of this law and other relevant laws and secondary legislative acts concerning the financial sector.