The National Agency for Prospective Projects (NAPP) presented the key provisions of the Capital Market bill at a press conference Wednesday. The new bill is intended to replace the existing Securities Market Law.
According to NAPP's presentation, the bill was prepared pursuant to a presidential decree dated December 18, 2025. The current law, dating to 2015, consists of 9 chapters and 64 articles; the new document runs to 16 chapters and 123 articles. The agency cited the need to systematize existing rules, implement modern financial instruments, and bring regulation in line with international standards as the main reasons for the overhaul.
The bill was prepared taking into account approaches used by the Asian Development Bank, UNDP, the Islamic Development Bank, the International Finance Corporation, the EBRD, the U.S. Securities and Exchange Commission (SEC), IOSCO and other organizations.
NAPP describes the project's main goal as building a "fair, transparent and competitive" capital market, protecting investor rights, and introducing modern instruments that meet international standards.
The presentation also outlined how key market indicators have trended in recent years. Market capitalization rose from 171.4 trillion soums in 2023 to 242.4 trillion in 2024 and 284.6 trillion soums in 2025 — an increase of roughly 66% over two years.
Nominal GDP grew over the same period, from 1,107.6 trillion to 1,653.6 trillion soums. Based on NAPP's figures, the ratio of stock market capitalization to GDP rose from about 15.5% to 17.2%.
Exchange trading volume grew from 2.7 trillion soums in 2023 to 9.8 trillion soums in 2025 — a 3.6-fold increase. Over-the-counter trading grew even more sharply, from 178.5 billion to 7.85 trillion soums — more than a 40-fold rise.
Securities issuance volume rose from 190.8 trillion to 269.1 trillion soums, driven mainly by equities, which grew from 189.7 trillion to 265.1 trillion soums. Bond issuance more than tripled, from 1.06 trillion to 3.93 trillion soums.
At the same time, NAPP pointed to persistent problems: low liquidity, a lack of mechanisms for complex financial transactions, underdeveloped infrastructure, limited supervisory authority, and continued obstacles for non-residents entering the Uzbek market and for local companies seeking access to foreign markets.
Sukuk, derivatives and securitization
One of the reform's central pillars is the introduction of new financial instruments. The bill establishes a legal framework for covered bonds, derivatives, securitized bonds, sukuk, sustainability bonds, subordinated bonds, and foreign-currency-denominated bonds.
NAPP projects that these new instruments will help boost capital raised through the stock market from 10 trillion soums in 2026 to 20 trillion soums by 2030, according to a forecast chart included in the presentation.
A separate section of the bill addresses sukuk, or Islamic securities, which NAPP defines as securities that comply with Islamic finance standards. The bill envisions several types of sukuk — partnership, lease, trade and agency-based — to be issued through a special-purpose vehicle (SPV) backed by assets contributed by the issue's originator.
Lease-based sukuk, for example, would be issued to finance the acquisition of property that is then leased back to the originator; trade-based sukuk would finance property purchased and resold to the originator in installments; and partnership sukuk would finance joint commercial ventures.
The bill also permits the issuance of sovereign sukuk, which could be issued on Uzbekistan's behalf by the Central Bank or another state body authorized by the president or the Cabinet of Ministers.
To illustrate the market's potential, NAPP cited global figures: by the end of 2025, the worldwide Islamic finance market was estimated at $6 trillion, of which roughly $1 trillion was in sukuk. The presentation also cited sukuk market sizes in individual countries — $340 billion in Malaysia, $31 billion each in Saudi Arabia and Turkey, and $50 million in Kazakhstan.
Tax breaks through 2038
Several of the new instruments come with dedicated tax incentives. Investment fund income received in the form of dividends would be exempt from dividend tax. Transactions between a covered-bond-issuing bank and the special company holding the covering assets would also be tax-exempt.
Transfers of securities between accounts held by a foreign nominee holder, where there is no change of beneficial owner, would not be treated as a sale and therefore would not create tax liability.
Income from foreign-currency-denominated bonds — including interest income and exchange-rate gains — would be fully exempt from profit tax and personal income tax through 2038. Sukuk income would be treated the same as bond interest income and would likewise be tax-exempt through 2038. Transactions involving property, goods, works or services between the originator and the special financial company in a sukuk issuance would be exempt from turnover tax.
Foreign investors to gain direct access to depository accounts
The bill proposes the concept of foreign nominee holders — a status available to foreign custodians, investment intermediaries and depositories recognized by the regulator. These entities would be allowed to open accounts directly with the Central Securities Depository and represent the interests of foreign investors. NAPP expects this to "radically simplify" market access for non-residents.
it will also implement a formal definition of a custodian — a financial institution, including a bank, that holds client assets, tracks cash and securities, and confirms ownership rights over them.
Investment intermediaries would be authorized to act as official representatives of bondholders and sukuk holders and to defend their interests before issuers. The bill also provides for the creation of self-regulatory organizations for professional market participants.
Separately, the bill implements credit rating agencies, which — with NAPP's authorization — would be able to assess issuers' creditworthiness, asset quality, corporate governance standards and instrument liquidity.
A new category of qualified investors would also be established: individuals with sufficient knowledge, experience and financial resources. NAPP would maintain a list of complex instruments available only to these investors.
NAPP to gain access to banking secrecy and independent fining powers
A substantial portion of the bill expands the regulator's authority in line with IOSCO standards.
NAPP would be granted the right to request and receive information protected by banking secrecy when needed to carry out its supervisory functions. The agency would also be permitted to apply "reasoned judgment" in licensing, supervision and the registration of financial instruments, and plans call for introducing a transparency rating for issuers.
The regulator would gain the power to independently impose and enforce financial penalties on market participants, including issuers. A member of a company's supervisory board or management board, for instance, could be fined up to 100% of their annual compensation.
Fines could also reach twice the amount of illegally obtained income, 5% of net profit for the previous year, or 1% of the violator's total capital. The bill separately specifies tiered penalties ranging from 0.5% to 2% of charter capital, as well as fixed fines from 41.2 million to 82.4 million soums.
NAPP would also be able to swiftly restrict specific operations of professional market participants. Upon detecting a violation, the agency could suspend an investment intermediary's brokerage, underwriting or depository activities for up to three months.
The regulator would additionally be empowered to suspend trading in issued securities, refuse to register new issuances, and demand early redemption of bonds and sukuk, with investors paid the income owed to them. Licenses held by professional market participants and specialists' qualification certificates could be suspended without a court ruling — the presentation cites suspension periods of up to 10 days, with the possibility of longer terms.
Central counterparty and an expanded role for the depository
The bill also restructures the capital market's infrastructure. Trading could be organized not only by the stock exchange but also by currency and commodity exchanges that establish dedicated securities sections, with trading and clearing rules set by these venues in coordination with the regulator.
The Central Securities Depository would retain exclusive authority over maintaining securities-ownership registries, assigning international codes, settling trades, and centrally distributing dividends and other income. It would also be allowed — without obtaining a banking license — to open correspondent accounts with foreign banks and depositories, record authorized financial transactions, and open foreign-currency accounts.
A new institution, the central counterparty, would also be implementd. It would act as the buyer to every seller and the seller to every buyer on the exchange, absorbing the risk of settlement failures. To cover this risk, the central counterparty would build a system of margin contributions and a reserve fund drawn from its own and clients' assets. This role could be filled either by the Central Securities Depository or by the stock exchange itself.
State companies eyed for secondary offerings; depository to link with Clearstream and Euroclear
NAPP's presentation concludes with a list of further practical steps to develop the market. These include adopting presidential or government decisions on privatization programs and increasing the free-float share of shares in major state-linked companies through secondary public offerings (SPOs) on both domestic and international stock markets.
To attract foreign institutional investors, the plan calls for technically and legally integrating Uzbekistan's national securities-registration system with international central depositories, including Clearstream and Euroclear, improving clearing infrastructure, and expanding custodial services.
Modernizing the infrastructure of the Tashkent Republican Stock Exchange and building long-term strategic partnerships to attract domestic and foreign investors were named as separate priorities. Once the bill is adopted, NAPP and other relevant agencies will also need to revise subordinate regulations to bring them in line with the new requirements.
Speaking at a forum in June, EBRD representative Francis Malige said Uzbekistan needs to build up its domestic investor base, along with insurance, pension funds and capital markets. He noted that large investors typically go where a market already has real activity, rather than to markets being built up artificially through foreign asset managers.
In late December, the president was informed of plans to implement new trading instruments in Uzbekistan's capital market and attract $1 billion in investment. Among the key initiatives cited were permitting trading in foreign companies' shares, allowing local companies to issue foreign-currency bonds, and extending the "regulatory sandbox" to cover additional residents.
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