Investment services providers
In Armenia, investment services are provided by investment companies and banks. An investment company is an organization licensed for providing investment services, whereas banks can provide investment services without obtaining an additional license. Meanwhile, credit organisations can act as a dealers in the market. Fund management companies can provide several investment services upon permission by the CBA.
Investment companies simplify the investment process for individuals who may not have the time or expertise to manage their own investments directly and request portfolio management. A dealer, on the contrary, acts as a principal, buying and selling securities for their own account.
Investment services providers ensure smooth access to the securities market for investors to buy and sell securities quickly and efficiently and establish fair market prices for securities.
They can also offer research, financial advisory to help clients make informed investment decisions.
Investment service providers also play a key role in raising capital for companies by underwriting new stocks or bond offerings.
Market Access for Investment Companies
CBA establishes market entry regulation to ensure that only qualified, prudent and financially sound firms are allowed to deal in the securities market, safeguarding their clients from potential risks and to foster investors’ confidence in securities markets.
For the licensing of Investment services providers, requirements are set for capital, corporate governance, technical equipment, premises and other requirements.
Read More
Activity regulation
Investment services provision is regulated by the CBA to ensure fair dealing, transparency, and investor protection. This includes regulations regarding:
- capital adequacy to ensure to provision of investment services is backed by sufficient financial resources to meet their obligations.
- conflicts of interest to mitigate risks that could arise when an investment services provider acts in both a brokerage and dealer capacity.
- Anti-Fraud Measures to prevent fraudulent activities and protect investors from scams.
Regulations aim to promote sound investment practices and risk management within these companies, helping to prevent systemic risk. Also, rules mandate investment services providers to deliver clear and accurate information about their fees and risks involved. CBA’s rules aim to prevent discriminatory practices and ensure that investors are treated fairly. This involves preventing market manipulation or insider trading. Such policy fosters market confidence and promotes efficient allocation of capital.
Exit from the Market
Read more about Investment services providers legislation (available in Armenian)
List of Investment companies licensed by the Central Bank