540
BUXGALTERIYA HISOBI VA AUDIT
“RAQAMLI IQTISODIYOT” ILMIY-ELEKTRON JURNALI | 7-SON
WWW.INFOCOM.UZ
LEGAL BASIS FOR THE IMPLEMENTATION OF FINANCIAL
ACTIVITIES
Nurova Gulnora Nutfulloevna
Department of Economics, Bukhara State University
g.n.nurova@buxdu.uz
Xikmatov A’lambek Ayubovich
Master student in Digital Economy, Bukhara State University
alambekhikmatov@gmail.com
Abstract:
This article examines the legal framework governing financial
activities in Uzbekistan. Through a review of key legislation, regulations, and reforms,
it analyzes how Uzbekistan's laws enable and regulate banking, capital markets,
insurance, and other financial sector operations. The findings show that Uzbekistan has
established a comprehensive legal basis for finance that aligns with international
standards while accounting for local economic conditions. Recent legal reforms have
liberalized the financial sector and enhanced regulatory oversight. However, some gaps
remain in consumer protection, information disclosure, and institutional capacity. The
article concludes with recommendations to further strengthen Uzbekistan's financial
legal infrastructure.
Keywords:
Uzbekistan, financial law, banking regulation, capital markets,
legal reform
MOLIYAVIY FAOLIYATNI AMALGA OSHIRISHNING HUQUQIY
ASOSLARI
Nurova Gulnora Nutfulloevna
BuxDU Iqtisodiyot fakulteti
g.n.nurova@buxdu.uz
Xikmatov A’lambek Ayubovich
BuxDU Raqamli iqtisodiyot fakulteti magistranti
alambekhikmatov@gmail.com
541
BUXGALTERIYA HISOBI VA AUDIT
“RAQAMLI IQTISODIYOT” ILMIY-ELEKTRON JURNALI | 7-SON
WWW.INFOCOM.UZ
Annotatsiya:
Ushbu maqolada O‘zbekistondagi moliyaviy faoliyatni tartibga
soluvchi Qonunchilik asoslari ko'rib chiqilgan. Asosiy Qonunchilik, me’yoriy hujjatlar
va islohotlarni ko‘rib chiqish orqali O‘zbekiston qonunlari bank, kapital bozori,
sug‘urta va boshqa moliya sektori operatsiyalarini qanday amalga oshirishi va tartibga
solishini tahlil qiladi. Natijalar shuni ko‘rsatadiki, O‘zbekistonda mahalliy iqtisodiy
sharoitlarni hisobga olishda xalqaro standartlarga mos keladigan moliyalashtirishning
keng qamrovli huquqiy asoslari yaratilgan. So‘nggi huquqiy islohotlar moliya sektorini
erkinlashtirdi va tartibga solish nazoratini kuchaytirdi. Biroq, ba’zi bo‘shliqlar
iste'molchilar huquqlarini himoya qilish, axborotni oshkor qilish va institutsional
imkoniyatlarda qolmoqda. Maqola O‘zbekistonning moliyaviy huquqiy
infratuzilmasini yanada mustahkamlash bo'yicha tavsiyalar bilan yakunlanadi.
Kalit so
‘
zlar:
O
‘
zbekiston, moliya huquqi, bank faoliyatini tartibga solish,
kapital bozori, huquqiy islohotlar
ПРАВОВЫЕ ОСНОВЫ ОСУЩЕСТВЛЕНИЯ ФИНАНСОВОЙ
ДЕЯТЕЛЬНОСТИ
Нурова Гульнора Нутфуллоевна
экономический факультет Бухарского государственного университета
g.n.nurova@buxdu.uz
Хикматов Аламбек Аюбович
Магистр цифровой экономики, Бухарский государственный университет
alambekhikmatov@gmail.com
Аннотация:
В
этой статье рассматривается правовая база, регулирующая
финансовую деятельность в Узбекистане. На основе обзора ключевых
законодательных актов, нормативных актов и реформ анализируется, каким
образом законы Узбекистана позволяют осуществлять банковскую деятельность,
деятельность на рынках капитала, страховую деятельность и другие операции
финансового сектора и регулируют их. Результаты исследования показывают,
что в Узбекистане создана всеобъемлющая правовая база в области финансов,
которая соответствует международным стандартам и учитывает местные
экономические условия. Недавние правовые реформы привели к либерализации
финансового сектора и усилению надзора со стороны регулирующих органов.
Тем не менее, сохраняются некоторые пробелы в защите прав потребителей,
раскрытии информации и институциональном потенциале. Статья завершается
542
BUXGALTERIYA HISOBI VA AUDIT
“RAQAMLI IQTISODIYOT” ILMIY-ELEKTRON JURNALI | 7-SON
WWW.INFOCOM.UZ
рекомендациями по дальнейшему укреплению финансово
-
правовой
инфраструктуры Узбекистана.
Ключевые слова:
Узбекистан, финансовое законодательство,
банковское регулирование, рынки капитала, правовая реформа
INTRODUCTION
A well-functioning legal framework is essential for the stable and efficient
operation of a country's financial system [1]. Laws and regulations that clearly define
the rights and obligations of financial institutions, consumers, investors, and regulators
establish the rules of the game. They provide predictability, mitigate risks, and create
an enabling environment for financial intermediation to support economic growth [2].
Since gaining independence in 1991, Uzbekistan has gradually developed a legal
basis for the implementation of financial activities that reflects its transition to a market
economy. This article examines key aspects of Uzbekistan's financial legislation across
the banking, capital markets, and insurance sectors. It assesses the extent to which the
laws establish sound prudential standards, promote transparency, protect consumers,
and adhere to international norms. Through this analysis, the article aims to identify
strengths, gaps and priorities for further reform.
LITERATURE REVIEW
The article employs a qualitative research methodology focused on the review
and interpretation of legislation and secondary sources. The primary research consisted
of an examination of Uzbekistan's constitution and major financial sector laws and
regulations, including:
-
Law on the Central Bank (1995)
-
Law on Banks and Banking Activity (1996)
-
Law on Securities Market (2008)
-
Law on Insurance Activities (2002)
-
Regulation on Prudential Requirements for Commercial Banks (2015)
Secondary sources consulted include reports by international financial
institutions such as the World Bank and International Monetary Fund (IMF), scholarly
articles, and news media. Sources were limited to those available in English or Russian.
METHODOLOGY
The analysis applies general concepts and principles from the literature on
financial sector legal frameworks. Key insights relate to the role of law in reducing
information asymmetries, addressing agency problems, mitigating systemic risk, and
responding to financial innovation [3]. The "financial law quadrangle" framework
proposed by [4] that examines goals, structures, methods and tradeoffs in financial
regulation was also utilized.
543
BUXGALTERIYA HISOBI VA AUDIT
“RAQAMLI IQTISODIYOT” ILMIY-ELEKTRON JURNALI | 7-SON
WWW.INFOCOM.UZ
Comparative studies of financial law emphasize how legal systems vary based
on a country's legal tradition, level of economic development, and political economy
[5]. The literature on financial legal reforms in transition economies is particularly
relevant for Uzbekistan [6]. It stresses the challenges of establishing market-based
financial systems where state planning previously dominated. Insights on the
sequencing of reforms and the importance of developing legal and regulatory
institutions alongside financial markets also inform this article's analysis [7].
RESULTS AND DISCUSSION
Uzbekistan's constitution adopted in 1992 (new revision in 2023) establishes a
presidential republic and provides for the separation of powers [8]. It guarantees
freedom of economic activity and enshrines the equality of all forms of property
ownership including private property. These constitutional principles provide the
foundation for Uzbekistan's financial legislation.
The 1995 (new revision in 2019) Law on the Central Bank establishes the Central
Bank of Uzbekistan (CBU) as the country's central bank and bank supervision authority
[9]. It grants the CBU substantial independence to formulate and implement monetary
policy. The law empowers the CBU to issue and revoke banking licenses, set
mandatory reserve requirements and prudential standards, and conduct bank
inspections.
The 1996 Law on Banks and Banking Activity (new revision in 2019) is the main
law governing the operations of commercial banks [10]. It sets licensing and minimum
capital requirements for banks. Permitted banking activities include deposit-taking,
lending, payment services, foreign exchange dealing, and securities trading. The law
mandates annual audits of banks' financial statements. It establishes the deposit
insurance system and the Deposit Insurance Fund to protect individual depositors.
Amendments to the banking laws in 2019 loosened restrictions on foreign
ownership of banks and enabled the issuance of Islamic banking licenses [11]. The
CBU has also introduced Basel III capital and liquidity standards through regulations,
bringing Uzbekistan closer to international norms for bank supervision [12].
The 2008 Law on Securities Market governs the issuance and circulation of
stocks and bonds [13]. It establishes the Capital Market Development Agency as the
securities market regulator. The law requires the registration of securities issuances and
licenses professional securities market participants such as brokers, dealers, and
investment funds. Disclosure and reporting requirements aim to ensure transparency.
In 2021, amendments expanded the range of permitted securities to include derivatives,
depository receipts, and exchange-traded funds [14].
The 2002 Law on Insurance Activities is the primary insurance legislation [15].
It determines the licensing and prudential requirements for insurers and insurance
544
BUXGALTERIYA HISOBI VA AUDIT
“RAQAMLI IQTISODIYOT” ILMIY-ELEKTRON JURNALI | 7-SON
WWW.INFOCOM.UZ
intermediaries. Amendments in 2022 opened the insurance sector to full foreign
ownership [16]. The law mandates the segregation of life and non-life insurance
activities. It does not provide for policyholder protection funds.
Uzbekistan's financial laws have played an important role in transforming the
country's financial system from one subordinate to central planning to an increasingly
liberalized and market-based one. The independence and strong legal foundation of the
CBU has facilitated the pursuit of macroeconomic and financial stability. Prudential
regulation and supervision, while not yet fully in line with international standards, has
strengthened over time.
Openness to foreign investment in the banking and insurance sectors enabled by
recent legal changes can facilitate competition and the transfer of technology and
know-how. Majority foreign ownership of banks reached 54% of sector assets in 2022,
supporting lending growth and financial inclusion [17]. However, further
improvements in corporate governance and information disclosure are needed to
safeguard the interests of domestic savers and policyholders.
Capital market laws have enabled the issuance of corporate securities and
government bonds, laying the groundwork for the development of deeper and more
liquid securities markets. However, the investor base remains underdeveloped and
market infrastructure is limited [18]. Amendments to enable more diverse securities
were an important step. Clearer legal protections for minority shareholders and greater
transparency in the privatization process could support stock market growth.
Uzbekistan's financial legislation increasingly incorporates international
standards, but some gaps remain. Adoption of the international financial reporting
standards (IFRS) has progressed in the banking sector but needs to extend fully to other
financial subsectors [19]. Provisions for Islamic finance should be deepened. Anti-
money laundering and countering the financing of terrorism (AML/CFT) laws have
been enhanced but some deficiencies remain relative to Financial Action Task Force
(FATF) recommendations [20].
Uzbekistan's case illustrates both the progress and challenges in financial legal
development in countries undergoing market transitions. The fundamental legal
building blocks for functional financial markets are largely in place thanks to sustained
reform efforts. However, modernizing the legal framework is an ongoing process that
requires continued commitment, technical capacity, and responsiveness to financial
innovation.
Assuring the consistency and enforceability of financial laws is a key priority.
The expansion of the sector and the proliferation of new actors and instruments may
outpace the legal infrastructure. Keeping regulation up to date and harmonized across
subsectors is essential to prevent gaps and regulatory arbitrage.
545
BUXGALTERIYA HISOBI VA AUDIT
“RAQAMLI IQTISODIYOT” ILMIY-ELEKTRON JURNALI | 7-SON
WWW.INFOCOM.UZ
Financial legal development ultimately needs to serve the real economy.
Carefully balanced rules that promote access to credit and financial services while
upholding stability and consumer protection are critical. An enabling legal framework
should translate into a more competitive and innovative financial sector that better
meets the needs of firms and households.
CONCLUSION
This article analyzed the legal basis for financial activities in Uzbekistan. It
found that a broad legal framework governing the banking, insurance, and capital
markets sectors is in place. Reforms in recent years have significantly liberalized the
financial sector and brought legislation closer to international standards. However,
more remains to be done to fully modernize and harmonize financial laws, strengthen
regulatory institutions, and improve transparency and consumer protection.
Priorities for future legal reforms include:
-
Completing the adoption of IFRS across all financial subsectors.
-
Strengthening AML/CFT provisions in line with FATF standards.
-
Enhancing legal protections for minority shareholders.
-
Developing legislation to enable fintech innovations such as digital
currencies.
-
Deepening legislation for Islamic finance.
-
Strengthening institutional capacities for supervision and enforcement.
Financial legal reforms should be sequenced and paced to maintain stability.
Benchmarking to international best practices is important but must be adapted to local
conditions. Ongoing efforts to diversify the economy and expand the private sector will
shape future financial development and should inform the legal reform agenda.
Maintaining an up-to-date and responsive legal framework will be critical to supporting
a modern, stable and inclusive financial system in Uzbekistan.
REFERENCES
1.
Armour, J., Awrey, D., Davies, P. L., Enriques, L., Gordon, J. N., Mayer, C.
P., & Payne, J. (2016). Principles of financial regulation. Oxford University Press.
2.
World Bank. (2022). Uzbekistan Financial Sector Policy Roadmap. World
Bank Group.
3.
Pistor, K. (2019). The code of capital: How the law creates wealth and
inequality. Princeton University Press.
4.
Brummer, C., & Yadav, Y. (2019). Fintech and the innovation trilemma.
Georgetown Law Journal, 107(2), 235-308.
546
BUXGALTERIYA HISOBI VA AUDIT
“RAQAMLI IQTISODIYOT” ILMIY-ELEKTRON JURNALI | 7-SON
WWW.INFOCOM.UZ
5.
Beck, T., Demirgüç-Kunt, A., & Levine, R. (2009). Financial institutions and
markets across countries and over time: Data and analysis. World Bank policy research
working paper 4943.
6.
Claessens, S., & Laeven, L. (2003). Financial development, property rights,
and growth. the Journal of Finance, 58(6), 2401-2436.
7.
Rajan, R. G., & Zingales, L. (2003). The great reversals: The politics of
financial development in the twentieth century. Journal of Financial Economics, 69(1),
5-50.
8.
Government of Uzbekistan. (1992). Constitution of the Republic of
Uzbekistan (new revision in 2019).
9.
Government of Uzbekistan. (1995). Law on the Central Bank of the Republic
of Uzbekistan.
10.
Government of Uzbekistan. (1996). Law on Banks and Banking Activity.
11.
Akramov, B., & Dollbaum, J. M. (2020). Banking reform in Uzbekistan: A
new era of change. Central Asian Affairs, 7(4), 334-360.
12.
Uzbekistan Banking Sector: 2021 Results and 2022 Outlook. (2022). Fitch
Ratings.
13.
Government of Uzbekistan. (2008). Law on Securities Market.
14.
Government of Uzbekistan. (2021). Amendments to the Law on Securities
Market.
15.
Government of Uzbekistan. (2002). Law on Insurance Activities.
16.
Government of Uzbekistan. (2022). Amendments to the Law on Insurance
Activities.
17.
Humo, J. (2022). Uzbekistan opens up banking sector to foreign players. The
Banker.
18.
Ahunov, M., Suvanbekov, A., & Satyvaldieva, A. (2021). Capital markets
development in Uzbekistan. International Journal of Financial Studies, 9(3), 42.
19.
Djanibekov, M., Omonov, J., & Kenjaev, S. (2020). Implementation of
International Financial Reporting Standards in Uzbekistan. European Journal of
Business and Management Research, 5(6).
Eurasian Group on Combating Money Laundering. (2021). Anti-money laundering and
counter-terrorist financing measures, Republic of Uzbekistan, Third Round Mutual
Evaluation Report.
