At the end of 2021 Serbian Parliament adopted a new Law on capital market (“Official Gazette of the Republic of Serbia”, no. 129/2021 as of 28 December 2021) (“New Law”). New Law entered into force on 5 January 2022, but its application will start on 6 January 2023, unless Serbian Parliament adopts till then amendments by which it will postpone the application of the New Law.
During 2022 Serbian Securities Commission (“SEC”) adopted numerous rulebooks for implementation of the New Law, which also will be applicable as of 6 January 2023. In addition, entities (e.g. brokers, credit institutions) which obtained operating licenses under the previous Law on capital market adopted in 2011 have the obligation to harmonize their operations and acts with the requirements of the New Law not later than 6 January 2023.
The New Law is aligned with the EU regulations governing markets in financial instruments (MiFid II), prospectus, investor compensation regimes, transparency, settlement finality in securities settlement systems, and market abuse. Also, it is worth to mention that the New Law introduced detailed provisions governing the pledge of stocks, in which manner it strengthened the protection of pledgees’ rights in case of default by a debtor.
According to explanation of the Serbian Government, the aim of the New Law is to achieve greater transparency and responsibility in business, to create and develop financial instruments that are offered on the capital market and thus in turn to create a more attractive market for both domestic and foreign investors. Time will tell if the New Law will result with development of the Serbian capital market which is relatively underdeveloped.
