Gov’t presents bill on investment funds to develop capital market in Georgia

The Government of Georgia has presented a bill on investment funds earlier today at a government meeting which aims to develop investment funds in Georgia and ensure free competition.

It also provides rules to create investment funds, to regulate their activity and to protect the interests of investors.

An investment fund is a type of supply of capital which belongs to numerous investors. It is used to collectively invest in stocks and bonds.  In an investment fund, each investor owns their individual shares.

The law on investment funds is very important for developing a capital market (the part of a financial system concerned with raising capital by dealing in shares, bonds, and other long-term investments), which is effective way for distributing financial resources in the economy,” said Georgin Prime Minister Giorgi Gakharia.

The law will apply to investment funds and their asset management companies, as well as other persons and institutions which are involved in the process of investing the assets of the funds and management, administration and accounting activities of the investment funds.

[Law on investment funds] is very important as it will help accumulation of savings [income not spent, or deferred consumption] and funds will distribute them in different areas,” said Deputy Economy Minister Ekaterine Mikabadze.

Mikabadze noted that the bill is designed in line with international best practices, fulfills the obligations under the Association Agreement with the EU and fits the Georgian economy.

Georgian government has been working on the bill for four year.

The bill will be sent to the Parliament of Georgia to be approved.