Earlier this year, the head of the agency Atabek Nazirov said that the issue of granting LLC the right to issue corporate bonds was being worked out. Currently, only joint stock companies and commercial banks have this right. At the same time, the requirements for the issuer to issue bonds make this instrument an unattractive source of financing even for many JSCs.

Despite the fact that corporate bonds are a convenient alternative to bank financing, such norms significantly reduce the list of organizations that can switch to this tool.

This circumstance, according to the agency, is causing a sharp reduction in the number and volume of corporate bonds outstanding in recent years. In particular, in 2010-2018, the number of corporate bonds in circulation decreased from 41 to 17 units, and their volumes from 512 billion to 198 billion soums, which is only 0.002% of the amount of issued shares.

The country currently has more than 148,000 enterprises in the form of a limited liability company operating in various sectors of the economy. None of these enterprises have an alternative to financing a bank loan, and corporate bonds can become such an alternative.

“For doing business, the bond market should be a worthy alternative in attracting financing, and for the population and investors - a profitable tool for investing free funds. The abolition of unnecessary restrictions on the issuance of bonds will significantly expand the circle of enterprises interested in raising additional funds for business development or reorganization. The issuance of corporate bonds may be the only alternative for companies experiencing difficulties in attracting credit banking resources, for example, due to the absence or lack of collateral,” head of the capital market analysis and improvement of legislation agency Tursun Makhkamov said. 

Also, the draft law proposes to amend the taxation procedure of holding companies. In particular, it is proposed not to consider the funds received as dividends of its subsidiaries as well as cash from the sale of shares of holding subsidiaries as the holding company’s total income.