As of 2011, the Serbian Capital Market Act has been changed multiple times due to the need for improvement of domestic legislation and alignment with the market’s demands, as well as harmonization of Serbian legislation with the EU acquis. Once again, on 3 February 2020, the National Assembly of the Republic of Serbia adopted amendments to the Capital Market Act, which came into force on 12 February 2020.
On this occasion, one of the main aims for adopting the amendments to the Capital Market Act was its alignment with the Public Debt Act. Additionally, it is expected that the amendments will facilitate foreign investors and funds to invest in domestic securities.
Namely, after a thorough analysis of the Serbian capital market, it was determined that it is necessary to reduce financing costs and provide efficient diversification of investments in order to attract more foreign investments in domestic securities and allow for further development of the Serbian market.
The amendments to the Capital Market Act also introduce one important novelty into the Serbian legislation: besides the Central Securities Depository and Clearing House, now also foreign legal entities may perform clearing and settlement of financial instruments issued by the Republic of Serbia if they are engaged in accordance with the Public Debt Act and Central Securities Depository and Clearing House’s act. In practice, this means that the procedure of account opening will be significantly simplified for foreign investors since from now on they do not have to open them with the Central Securities Depository and Clearing House.
Also, foreign entities that want to perform clearing and settlement of financial instruments won’t have to establish branch offices in Serbia, but will only have to obtain authorization from the Serbian Government. The National Bank of Serbia will be able to open and maintain money accounts of foreign entities that perform these operations.
Henceforth and given all of the above mentioned, we expect that these novelties will attract more foreign investments and overall improve the domestic financial market.
This text is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us.
By Milos Velimirovic, Partner, and Nevena Milosevic, Associate, Samardzic, Oreski & Grbovic