Capital market reform in the territory of the Federation of Bosnia and Herzegovina has been waiting for changes for years. New laws on the capital market and virtual assets are being prepared, as well as amendments to the Factoring Act, i.e. facilitating the purchase of monetary claims.
The aim of the reform is to harmonize regulations with European Union standards. This should help domestic companies and protect investors, as the rules for digital money, i.e. cryptocurrencies, as well as securities trading will be regulated.
The drafts of the Law on the Capital Market and the Law on Providers of Services Related to Virtual Assets and Cryptocurrencies are still in the public discussion procedure. The goal is for the laws to be further referred to the legal procedure in September.
The new entity laws will mean harmonization with the standards of the European Union. The Federal Ministry of Finance says that this is a new stage in the development of the financial market.
“With these laws, the Federation of Bosnia and Herzegovina is making an important step towards a modern, safe and competitive financial market, harmonized with European standards. We are opening up more space for investments, development of new financial services and stronger protection of investors,” said Federal Finance Minister Toni Kraljević.
Cryptocurrencies regulated for the first time
In this way, the work with cryptocurrencies and digital money is legally regulated for the first time. It will include supervision and security for citizens engaged in these activities.
It is also a novelty that the Factoring Act would help small and medium-sized enterprises to regulate the collection of receivables. And in order for the reform to be complete, the drafting of the Law on the Securities and Capital Market Commission is underway.
“For now, we only have stocks and bonds, and according to the new law there will be other types of assets. The money market will be regulated, we can talk about derivatives trading, which is very current on the global market. The result is the possibility for brokerage houses, which currently only mediate securities transactions, to expand their operations”, explained Ahmed Hodžić, head of the Department for Trading and Supervision of the Sarajevo Stock Exchange.
More space for investments
In securities trading, the problem is outdated legislation, a limited number of investors and a lack of transparency. Solving this would mean a lot for the economy.
“In such a way that it is directed towards some productive activities where it will bring benefits, from infrastructure projects to certain budget needs. This reform goes in the direction of liberalization, speeding up processes in the area of the capital market and introducing new financial technologies. Fintech is also introduced there, the issue of digital assets is included,” said Admir Čavalić, chairman of the Economic Policy Committee of the House of Representatives of the Federation of Bosnia and Herzegovina.
Greater security for investors
This would make the Federation of Bosnia and Herzegovina part of modern financial systems, according to experts.
“Virtual assets provide greater security and control of participants and service providers, a more efficient and effective capital market with a greater number of issuers and a greater number of investors, as well as greater protection of both domestic and foreign investors,” said Almir Alihodžić, professor at the Faculty of Economics in Zenica.
Reform with new technologies
The reform would change the way companies trade on the capital market. It includes modern software and artificial intelligence for faster buying of stocks and bonds.
A step ahead was made by Brčko District, which at the beginning of the year initiated the reform of the capital market by adopting the Draft Law on the Securities Market and establishing a new stock exchange, Federalna writes.
