Uzbekistan is taking steps to modernize its stock exchange system with the recent adoption of a new Cabinet of Ministers resolution aimed at preventing price fluctuations in exchange trading.
The resolution, on additional measures to prevent price fluctuations in stock exchange trading through the introduction of modern exchange mechanisms, outlines a range of measures designed to stabilize the market, improve competition, and strengthen legal compliance.
A key component of the resolution is the establishment of a "reliability" rating for stock exchange participants. The rating system will evaluate exchange members and trading participants, rewarding those with high trading turnover with increased income potential. This move aligns with Uzbekistan's goal to foster a competitive and transparent trading environment.
The new mechanisms are set to go into effect by July 15, 2025. The resolution mandates that certain state-controlled enterprises and legal entities—those where the state holds 50% or more of the capital—must sell specific chemical and industrial products solely through exchange trading. These products include hydrochloric and nitric acids, sodium cyanide, sodium hypochlorite, liquid nitrogen, liquid chlorine, zinc oxide, ferromolybdenum, and various types of flour products.
As part of the reforms, the government will also introduce bilateral reverse auctions at the Uzbekistan Republican Commodity Exchange. This system allows both sellers and buyers to submit bids simultaneously, enhancing market efficiency.
By June 1, 2025, the Republican Commodity Exchange will establish new infrastructure, including exchange warehouses across the country and procedures for registering products. Additionally, exchange members will receive training on the new auction mechanisms, with qualifications awarded upon completion.
The goal of these reforms is to promote the establishment of real market prices based on supply and demand while reducing illegal activities in commodity exchanges.
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