ASIAN DEVELOPMENT BANK TAR:UZB 36498

Transcription

1 ASIAN DEVELOPMENT BANK TAR:UZB TECHNICAL ASSISTANCE TO THE REPUBLIC OF UZBEKISTAN FOR DEVELOPMENT OF THE CAPITAL MARKET July 2003

2 CURRENCY EQUIVALENTS (as of 30 June 2003) Currency Unit sum SUM1.00 = $ $1.00 = SUM * *Official exchange rate ABBREVIATIONS ADB Asian Development Bank Carthills Carthill Asset Management Company CCFSM Center on Coordination Functioning of the Securities Market GKI GOS Kom Imushestvo (State Property Committee) IOSCO International Organization of Securities Commissions JSC joint stock company NBU National Bank of Uzbekistan OTC over-the-counter SOE state-owned enterprise TOR terms of reference TA technical assistance UZSE Uzbekistan Stock Exchange NOTE In this report, $ refers to US dollars. This report was prepared by D. Kertzman, Financial Sector Specialist, Governance, Finance and Trade Division, ECRD.

3 I. INTRODUCTION 1. The Government of Uzbekistan requested Asian Development Bank (ADB) assistance to strengthen the institutional framework to support capital market development. A Fact-Finding Mission visited Tashkent from 10 to 22 February 2003 and reached an understanding with the Government on the objectives, scope, cost, financing, and implementation arrangements for the technical assistance (TA). 1 The TA logical framework is given in Appendix 1. II. ISSUES 2. Capital Market. Although the Government has begun to establish a two-tiered financial system for private enterprises, due to ongoing government control of the banking sector and difficulties in accessing the capital market by private enterprises, scarce domestic funds are often not allocated to the most productive uses. For larger enterprises, the nonconvertibility of the local currency makes raising capital overseas, and foreign investment, problematic. 3. The capital market has been used primarily by the State Property Committee (GOS Kom Imushestvo or GKI) to raise funds for smaller and medium state-owned enterprises (SOEs) that have been corporatized by allowing them to sell noncontrolling state shares through initial public offerings. Currently there are 4,700 joint stock companies (JSCs), of which approximately 3,000 were originally SOEs. Of the former SOEs, 794 are currently traded on the C List of the Uzbekistan Stock Exchange (UZSE), the list designated for privatized enterprises that meet certain requirements, 2 although all former SOEs are eligible for trading on the exchange and the over-the-counter (OTC) market. 4. Based on high listing standards, 3 only six companies, four of which are banks, are listed on the A list of the UZSE. Although B list requirements are lower, no companies have qualified for it. Less than 1% of secondary trading in listed shares takes place on a formal OTC market, Elsis Savdo, which is controlled by the National Bank of Uzbekistan (NBU). Most secondary trading of listed shares (approximately 81%) takes place on an unregulated informal secondary OTC curb market. 4 Based in part on poor corporate governance practices, there is limited interest in investing in privatized enterprises, including those that have been listed, resulting in limited trading liquidity. Transaction costs on the UZSE are high (ranging between 3.7 and 5.7%) but have come down in recent years due to competition from the curb market. Significant decisions taken by the UZSE are subject to Center on Coordination Functioning of the Securities Market (CCFSM) oversight, and the UZSE does not appear to act independently. Most securities market participants appear to be affiliated with the banking sector. 5. Recent regulatory changes that removed previous restrictions on the size of corporate bond issues have enabled larger domestic enterprises to raise needed funds through the domestic corporate bond market. An international syndicate that includes 19 local and foreign banks, Carthill Asset Management Company (Carthills), and one other nonbank financial institution has been formed to underwrite corporate debt. This syndicate began to develop a secondary corporate bond market in April of 2002 and has thus far organized nine corporate bond issues issues worth SUM5.67 billion, including a recent bond issue of SUM600 million with a maturity of 2 years and a coupon rate of 28% involving a large cosmetics manufacturing 1 The TA first appeared in ADB Business Opportunities on 11 March Paid in capital of SUM200 million, SUM300 million total assets, 500 shareholders, one-year profitability. Slightly different requirements apply to banks. 3 Paid in capital of SUM1 billion, SUM1.5 billion total assets, 2000 shareholders, 3 years profitability, etc. Slightly different requirements apply to banks. 4 In 2002, trading on the curb market was more than SUM20 billion, compared with SUM4.6 billion for the UZSE and SUM600,000 for the organized OTC market.

4 2 company (Pillada-Vostok). The lead underwriter was a local private bank, Business Bank, and the manager of both issues was Carthills. Purchasers and underwriters of corporate debt are generally institutions affiliated with the issuers, including banks. Systemic and investor protection concerns have been raised based on these affiliations, inadequacy of financial disclosure, and the absence of an independent and credible credit rating agency. 6. Capital Market Regulator. CCFSM was created by presidential decree in March of 1996 under GKI, and replaced the State Commission on Securities established under the Ministry of Finance in The General Director of CCFSM is also a Deputy Chairman of GKI. GKI s role as the largest shareholder and seller of shares in the market, while overseeing CCFSM, raises significant conflict of interest concerns In 1998, CCFSM became a full member of the International Organization of Securities Commissions (IOSCO), a private organization that promotes adoption of international best practice standards of securities regulation among its members. Pursuant to IOSCO membership requirements, CCFSM recently conducted a self-assessment of its compliance with IOSCO principles and identified, among others, the following gaps that need to be addressed: (i) methodology for providing clear and comprehensive interpretations of laws and regulations to the public; (ii) professional staff training; (iii) development of self-regulating organizations (role and regulations); (iv) development of investigation and surveillance techniques; (v) coordination with NBU on regulation of bank securities activities; (vi) disclosure requirements for issuers, including collective investment schemes, accounting requirements, and effective sanctions for noncompliance; and (vii) protection of minority shareholder rights. With respect to compliance with the IOSCO principle on the operational independence of the regulator, CCFSM has not committed to the timing for full implementation. 8. CCFSM has 32 staff at its central office in Tashkent and 88 staff in 14 regional offices. The Department of Professional Participants (six central office staff and regional staff) oversees approximately 350 professional participants in the capital market, including market institutions (exchange, organized OTC market, depository, etc.) and securities intermediaries, including enforcement-related duties. Another department (five central office staff and regional staff) oversees regulation of JSCs to ensure compliance with the Joint Stock Company Law and related decrees and regulations. 9. Corporate Governance Reforms. Recently, the Government has taken measures to promote better corporate governance. In January 2003, the Government issued a decree On Increasing the Role and Significance of the Private Sector of the Economy 6 that incorporates many recommendations proposed by ADB, 7 including removal of the preferential powers of state trustees and managers who represent shares owned by the Government to veto supervisory board decisions, 8 and professionalization of their role. This decree also requires (i) GKI to sell state shareholdings in JSCs of 25% or less through the stock market in Note one of the components of ADB Technical Assistance to Uzbekistan for Enterprise Restructuring and Corporate Governance. Manila. is to develop proposals to create an independent securities market regulator to address conflict of interest concerns. 6 Presidential decree No. UP-3202, 24 January ADB Technical Assistance to Uzbekistan for Corporate Governance and Reform Program. Manila. See also footnote State trustees of JSCs represent the Government s share in the statutory capital of an enterprise that is in excess of 25%, while a trust manager is authorized to hold the state s shareholdings when it is 25% or less. Trustees and managers serve on the supervisory council without election by shareholders at the general meeting of shareholders. Under cabinet of ministers resolution 361, regardless of the amount of capital held by the Government, the state trustee or trust manager representative has de facto approval powers over actions of the supervisory council (veto right).

5 2004, 9 (ii) shareholder approval of the chairman of the board s employment contract, (iii) the board of directors to develop an annual business plan based on profitability and dividend targets to be approved by shareholders, (iv) submission of a report on the results of this plan quarterly to the supervisory board and the linking of payment of executive directors and the supervisory board chairman to financial performance, and (v) prohibits employees from becoming members of the supervisory board. 10 To help effectively implement this Decree and develop institutional capacity to promote capital market development, the CCFSM requested technical assistance from the ADB. Except for World Bank assistance in helping the CCFSM develop a computerized consolidated disclosure system, the Government is not receiving any TA from other donors in this area. 10. Legal and Regulatory Framework. Securities legislation consists of six laws, presidential decrees, resolutions of the cabinet of ministers, and procedures and instructions. CCFSM is currently working on amendments to five of these laws to address a number of issues, including the recording of beneficial ownership of shares and restrictions on the activities of securities market intermediaries Operations and Strategy of ADB and Other Aid Agencies. In 2000, ADB provided TA to GKI to promote corporate governance reforms at the enterprise level for privatized firms and new enterprises. 12 The TA included (i) a review of the adequacy of the policy, legal, and regulatory framework for corporate governance and an assessment of corporate governance practices; (ii) development of a suitable framework for efficient management of the Government s shares in enterprises; and (iii) capacity building to enhance supervision and regulation of enterprises. The consultant s final report contained a number of recommendations, including (i) clarification of disclosure requirements for enterprises making a public offering and for public companies, (ii) clarification of the supervisory council s role to approve and remove management, (iii) removal of the power of state trustees and trust managers to veto supervisory council decisions, and (iv) the need to transform CCFSM into an independent market regulator. 12. ADB is currently supporting the Government in the restructuring and liquidation of SOEs within the broader framework of reforms of corporate governance and enterprise restructuring. A new TA was approved in December of that, among others, is focused on helping the Government draft and implement changes in the current legal framework to establish an independent securities regulator, enhance CCFSM enforcement powers, consolidate regulation of the securities market into one umbrella law, and evaluate self-regulation by the UZSE. The current TA, which is focused on capacity building of CCFSM, promotion of international best practice standards, and capital market development, will complement the above-referenced related assistance. 3 9 GKI continues to own 25% or less in 2,068 JSCs. 10 On 13 February 2003, the President of the Republic of Uzbekistan issued an order On the Measures of Execution of Decree UP-3202 (Order P-1708) to establish a special commission to improve management of privatized enterprises. The order, among others, reiterates the need of JSCs to hold general shareholder meetings no later than April 2003 to ensure conformance with the decree. 11 The Law on Securities and Stock Exchanges (adopted in 1993 and amended five times), the Law on Joint Stock Companies and Protection of Shareholder Rights (adopted in 1996), the Law on Securities Market Functioning Mechanisms (adopted in 1996), the Law on Activity of Depositories in the Securities Market (adopted in 1998), and the Law on Protection of the Rights of Investors in the Securities Market (adopted in 2001). This list does not include implementing regulations, which may be in the process of being drafted and/or amended. 12 ADB Technical Assistance to Uzbekistan for Corporate Governance Reform Program. Manila. 13 ADB Technical Assistance to Uzbekistan for Enterprise Restructuring and Corporate Governance. Manila.

6 4 III. THE TECHNICAL ASSISTANCE A. Purpose and Output 13. The TA will facilitate development of an orderly, fair, and efficient capital market. The TA will (i) support incorporation of international best practice standards into the current legal and regulatory framework, and (ii) enhance the capacity of CCFSM to develop and regulate the capital market. B. Methodology and Key Activities 14. The TA will perform the following tasks: (i) (ii) (iii) (iv) Legislative Framework. Review and recommend changes in the current legal and regulatory framework for compliance with IOSCO principles governing the regulation of issuers (including SOEs), collective investment schemes, market intermediaries (including banks), and secondary market, and provide related training of CCFSM staff on such principles. Corporate Bond Market. Review and assess the current institutional framework for corporate bond market development, including the role of CCFSM and NBU; identify impediments to the development of the primary and secondary market; work with CCFSM and key decision makers to develop a strategy and timetable to address such impediments; and provide related training to enhance CCFSM s regulatory capacity in this area. Secondary Equity Market. Review the current institutional and policy framework for secondary trading of equity securities; identify impediments to the development of the secondary market; work with CCFSM and key decision makers to develop recommendations to address such impediments; and provide related training to enhance CCFSM s regulatory capacity in this area. Corporate Governance. Review the status of proposals to implement the new presidential decree, identify key implementation issues, and work with CCFSM staff to develop recommendations to address these issues. (v) Enforcement. Review current disclosure requirements; procedures for monitoring compliance, detecting violations/irregularities, and sanctioning; the role of CCFSM; the accountability of market participants (UZSE, market intermediaries, auditors, lawyers); and identify gaps therein (legal framework and enforcement) and work with CCFSM to develop an effective strategy to address these gaps. C. Cost and Financing 15. The estimated total cost of the TA is $290,000 equivalent, including a foreign exchange cost of $175,000 and a local currency cost of $115,000 equivalent. The foreign exchange cost of $175,000 and local currency costs of $25,000 equivalent will be financed on a grant basis by ADB s TA funding program. The Government will contribute $90,000 equivalent in kind for office space, counterpart staff, transportation, and other services. Details of the cost estimate are provided in Appendix 2.

7 5 D. Implementation Arrangements 16. CCFSM will be the Executing Agency and will provide the necessary office support, counterpart staff, transportation, and other services to the consultants. Implementation of the TA is scheduled to begin in September 2003 and end in July ADB will review and monitor the implementation of the TA through missions and consultants reports. 17. The TA may be tendered separately to international firms or to individuals in accordance with ADB s Guidelines on the Use of Consultants and other arrangements satisfactory to ADB on the engagement of domestic consultants. If firms are recruited, the consultants will be selected and recruited using a biodata technical proposal, using the quality and cost-based selection method. A team of six individual consultants three international and three domestic will be assembled by ADB to implement the TA for a total of 14 person- months. The three international consultants will include a team leader/capital market regulatory expert (2 personmonths), a corporate bond market expert (1 person-month), and a secondary equity market development expert (1 person-month). The terms of reference for the consultants are in Appendix 3. The TA will support training, seminars, and workshops, which will be done by the consultants in close coordination with CCFSM and ADB. Equipment will be procured by consultants in accordance with arrangements acceptable to ADB. 18. The TA is expected to begin in September 2003 and will be implemented over a period of 11 months, finishing in July The team leader will submit (i) an inception report 2 weeks after the commencement of services, (ii) quarterly progress reports during implementation, (iii) a draft final report before the conclusion of the contract, and (iv) the final report 2 weeks after incorporating comments from CCFSM and ADB. IV. THE PRESIDENT'S DECISION 19. The President, acting under the authority delegated by the Board, has approved the provision of technical assistance not exceeding the equivalent of $200,000 on a grant basis to the Government of Uzbekistan for Development of the Capital Market, and hereby reports this action to the Board.

8 6 Appendix 1 TECHNICAL ASSISTANCE FRAMEWORK Design Summary Goal More orderly, fair, and effective capital market Performance Indicators/Targets International best practice standards introduced into the legal and regulatory framework Increased number of IPOs Monitoring Mechanisms Quarterly reports and project completion report ADB missions Assumptions and Risks Increased number of listed companies Increased number of investors and market liquidity Purpose Create a more effective capital market policy and regulatory framework Adoption of amendments to legal and regulatory framework to promote capital market development Application of legal and regulatory requirements to all market participants (including SOEs) Effective enforcement of legal and regulatory framework Feedback from consultants, executing agency, and market participants on effectiveness of recommendations Quarterly reports and project completion report ADB missions Government commitment to capital market development Outputs Recommendations to incorporate best practices into legal and regulatory framework Recommendations for improving enforcement of legal and regulatory requirements Recommendations to address impediments to corporate bond market development Reports and workshop materials Draft laws/amendments, implementing rules/regulations/guidelines Reports ADB missions CCFSM staff working on the TA adequately qualified and Available; key decision makers willing to participate in workshops ADB=Asian Development Bank, CCFSM= Centre on Coordination Functioning of the Securities Market, IPO=initial public offering, SOE=state-owned enterprises, TA=technical assistance.

9 Appendix 1 7 Recommendations to address impediments to development of the secondary equity market Recommendations to effectively implement recent presidential decree to promote better corporate governance and private enterprise development Related workshops Identification of possible follow-up project/s Activities Consultations and meetings Analysis of relevant policies, laws/ decrees and regulations/rules, procedures Drafting of recommendations, reports and workshop materials Training of CCFSM staff Workshops to disseminate findings and discuss key policies Draft amendments, to laws, implementing rules/ regulations / procedures/ guidelines Workshop materials Reports Reports Close supervision by ADB staff Consultants adequately qualified and available CCFSM cooperation and support of other key decision makers Effective implementation of proposals Inputs Consulting services Workshops 4 person-months of international consulting inputs and 10 personmonths of domestic consulting services Successful recruitment and timely fielding of adequately qualified consultants within available budget

10 8 Appendix 2 Item COST ESTIMATES AND FINANCING PLAN ($ 000) Foreign Exchange Local Currency Total Cost A. Asian Development Bank (ADB) Financing a 1. Consultants a. Remuneration and Per Diem i. International Consultants ii. Domestic Consultants b. International and Local Travel c. Reports and Communications Equipment b Training, Seminars, and Conference a. Domestic Training b. Overseas Training c. Interpreters and Translators Transportation Government Observers for Contract Negotiations 6. Contingencies Subtotal (A) B. Government Financing 1. Office Accommodation and Venue/Facilities for Training/Seminar 2. Local Counterpart Staff Contingencies Subtotal (B) Total a Financed by ADB s TA funding program. b Equipment to be purchased includes notebook computers, facsimile machines, and photocopiers. Source: Asian Development Bank estimates.

11 Appendix 3 9 OUTLINE TERMS OF REFERENCE FOR CONSULTANTS A. International Consultants (4 person-months) 1. A team of three international experts will be recruited to assist the Center on Coordination Functioning of the Securities Market (CCFSM). The terms of reference (TOR) are provided to outline the indicative tasks. International consultants will be required to formulate the specific TOR for domestic consultants in their respective area and oversee the domestic consultants work. All consultants (domestic and international) will be required to provide detailed written inputs in their respective areas to the team leader in a timely manner to meet their reporting obligations outlined in para. 18 of the technical assistance (TA) report. The consultants will be required to undertake any other related tasks to attain the objectives of the TA. 1. Team Leader/Capital Market Regulatory Expert (2 person-months) 2. The consultant should have an advanced degree in finance, law, or related field and at least 10 years experience in capital market regulation and development in countries in transition. The consultant will be responsible for the overall management of TA implementation and the timely delivery of quality interim and final reports. The consultant should review the current institutional and policy framework and its role in promoting capital market development, identify impediments to such development, make proposals to address such impediments, recommend additional measures to complement earlier proposals, address any perceived gaps, and prepare a table of indicators to help CCFSM track the status of recommendations and the impact on market development. The consultant will assist the Government in introducing reforms to the current framework to promote international best practice standards. In particular, the consultant will do the following: (i) Review CCFSM s most recent self-assessment with the International Organization of Securities Commissions (IOSCO) principles governing the regulator, self-regulation, issuers (including state-owned enterprises [SOEs]), market intermediaries, and the secondary market; review subsequent developments, recommendations/reports/proposals to incorporate such principles and the status thereof, and outstanding issues (policy and implementation); and, after extension consultation with CCFSM staff, prepare a draft written plan to incorporate such principles into the legal and regulatory framework, including key steps that need to be undertaken (rules, regulations, legislative amendments, etc., in coordination with advice being given on a related ADB technical assistance activity (e.g., independence of the regulator, selfregulatory role and duties of Uzbekistan Securities Exchange [UZSE]). Co-host a workshop with CCFSM for key decision makers (GOS Kom Imushestvo [GKI], Ministry of Justice, UZSE, market participants) to clarify the importance of incorporation of IOSCO principles to market development; present the findings and draft recommendations; and solicit feedback and comments on the feasibility of such incorporation. Incorporate workshop comments into final report, which should include a proposed strategy and a timetable to monitor progress and market impact. (ii) Review current disclosure requirements for listed issuers (including SOEs), procedures for monitoring compliance (including development of technology to electronically file and consolidate information) and enforcement (including recent

12 10 Appendix 3 enforcement actions for noncompliance), role of CCFSM (including regional offices) and the UZSE and any other government agencies, and accountability of other market participants for noncompliance (UZSE, market intermediaries, auditors, lawyers, directors/management of listed issuers). Draft recommendations to address perceived gaps and promote enhanced disclosure for discussion and review by CCFSM. Incorporate CCFSM comments into the final report, which should include a proposed strategy and timetable for implementation to monitor progress and market impact. (iii) Review the latest presidential decrees/resolutions/orders (collectively the decree ) promoting good corporate governance and the implementing rules/regulations/guidelines issued by CCFSM to ensure compliance; identify key implementation issues (e.g., rights of shareholders in joint stock companies that are being reorganized due to inability to comply with new capital requirements); assess the proposed impact of the decree on capital market development; identify the role of CCFSM and other regulators in the implementation of corporate governance standards and implementation strategies; and prepare a draft report summarizing findings, identifying implementation gaps and outstanding issues, and recommending measures to address such gaps. Present the draft written report to CCFSM staff for discussion, and incorporate CCFSM s comments into the final report. 2. Corporate Bond Market Expert (1 person-month) 3. The consultant should have an advanced degree in finance or a related field and at least 10 years experience in corporate bond market development, including experience in countries in transition. The consultant will be responsible for preparation of a report and recommendations to identify and address key impediments to corporate bond market development, including implementation issues and proposed sequencing of reforms with a focus on CCFSM s role. The consultant will review and assess the current institutional and policy framework for corporate bond market development, including the role of CCFSM and the National Bank of Uzbekistan (NBU); identify impediments to the development of the primary and secondary market, including the adequacy of current disclosure requirements and the ability of investors to monitor risk; work with CCFSM and key decision makers to develop a strategy to address such impediments; and develop mechanisms to enhance institutional capacity in this area, including workshops for CCFSM staff on key development issues. The consultant shall also prepare a matrix of sequenced policy recommendations to address impediments to development of the corporate bond market. 3. Secondary Equity Market Development Expert (1 person-month) 4. The consultant should have an advanced degree in finance or a related field and at least 10 years experience in capital market development in countries in transition. The consultant will conduct an assessment of the current institutional and policy framework for the primary offering and secondary trading of securities on the UZSE, the formal over-the-counter market, and the curb market; review procedures for offering and trading shares on such markets; identify impediments to development; and develop recommendations to address such impediments and promote the development of the secondary market. In particular, the consultant will do the following:

13 Appendix 3 11 (i) (ii) (iii) (iv) Conduct an assessment of the role of these three markets, requirements for trading thereon, pricing of securities, transaction costs, clearance and settlement, and role of intermediaries. Review the role of, and procedures used by, the UZSE and the formal over-thecounter market, Elsis Savdo, in self-regulation and customer dispute resolution. Present recommendations at a workshop with key decision makers. Prepare a matrix of sequenced policy recommendations to address impediments to development of the secondary equity market. B. Domestic Consultants (10 person-months) 5. The domestic consultants will be required to assist the international consultants in (i) providing country background information and helping to ensure that the work done by the international consultants is appropriate to the Uzbekistan situation; (ii) collating recent policy and institutional, legal, and regulatory measures governing the capital market in the consultants respective areas; (iii) providing logistical and other technical translation services as appropriate and needed; and (iv) providing written inputs to facilitate the preparation of team reports. 1. Capital Market Regulatory Specialist (6 person-months) 6. The consultant should have a solid background in Uzbekistan legislation relating to the capital markets and sufficient experience working with CCFSM. The consultant will support the international capital market regulatory expert and the other international experts with respect to legal and regulatory issues. The TOR for the consultant will include, but not be limited to, the following: (i) (ii) (iii) Help the capital market regulatory expert review current requirements governing self-regulatory organizations; regulation of issuers (including SOEs), market intermediaries, and the secondary market; proposed changes to such requirements, and CCFSM s current supervision and enforcement practices in these areas including the imposition of related sanctions for noncompliance. Help the capital market regulatory expert review requirements governing corporate governance (duties of the board/management/controlling shareholders, liability, disclosure, etc.), and the role of CCFSM and other regulators in monitoring and enforcing compliance with such requirements, including the imposition of related sanctions for noncompliance. Help other experts review current regulatory requirements governing the issuance and trading of corporate bonds and equity securities; the role of CCFSM and other regulators (and self regulatory bodies) in monitoring and enforcing compliance with such requirements, including imposition of related sanctions for noncompliance; and procedures/requirements for addressing customer complaints/disputes. 2. Corporate Bond Market Specialist (2 person-months) 7. The consultant should have solid experience in developing a corporate debt market in Uzbekistan and will work under the supervision of the international corporate bond market expert. The TOR for the consultant will include, but not be limited to, the following: (i) Contribute to the review and assessment of the current institutional and policy framework for corporate bond market development, including the role of the

14 12 Appendix 3 banking sector, key market participants, and market regulators (CCFSM and NBU). (ii) Contribute to the development of a policy reform agenda to promote development of the corporate bond market and strengthen supervision and regulation of market participants. 3. Secondary Equity Market Development Specialist (2 person-months) 8. The consultant should have solid experience in developing the equity market in Uzbekistan and will work under the supervision of the international secondary equity market development expert. The TOR for the consultant will include, but not be limited to, the following: (i) (ii) Contribute to the assessment of the current institutional framework for the primary and secondary trading of equity securities, including requirements and procedures for offering and trading shares thereon, how securities are priced on such markets, transaction costs, clearance and settlement of trades, the role of intermediaries, and impediments to future growth/development. Contribute to the development of a policy reform agenda to promote development of the equity securities market and strengthen supervision and regulation of market participants.