Central Bank of the Republic of Azerbaijan amends capital and liquidity rules for investment companies and introduces a minimum leverage ratio

The Central Bank of the Republic of Azerbaijan has approved amendments to the Rules on Sustainable Capital Requirements for Investment Companies, updating the classification framework and the methodology for calculating ongoing capital requirements, and adding new requirements on liquid assets and leverage. The changes cover how investment companies are categorised, how category changes are regulated, and a new approach to capital calculation that takes into account not only the size of an investment company’s trading book but also its level of activity in providing investment services. The revised framework also introduces new liquid-asset requirements and sets a minimum leverage ratio, with the stated aim of supporting more proportionate regulation and improving alignment with international regulatory standards under the 2024–2026 financial sector development strategy. A six-month transition period applies for investment companies to determine their category, notify the Central Bank, and bring their activities into line with the revised Rules. The Central Bank also held a presentation and discussions at the Azerbaijan Capital Markets Association (AKBA) to explain the approved changes and address sector questions.