The Securities and Exchange Organization—the financial markets regulator in Iran—is in talks to join the International Organization of Securities Commissions, a club for organizations that regulate the world’s securities and futures markets.
The talks are part of a general push to establish international recognition for the organization, helping ease foreign investment in Iran's financial markets once sanctions are lifted, says the head of SEO's Department of International Affairs and Public Relations.
Bahador Bijani added that his organization intends to issue securities in global financial markets and is also in touch with international credit agencies, IRNA reported.
Iran's government is betting big on getting high inflows of foreign investment, after sanctions imposed on its nuclear energy program are lifted, to pull the economy out of recession and spur an era of growth.
The permanent members of the United Nations Security Council plus Germany struck a historic deal with Iran this July, which will limit Tehran's nuclear energy program in exchange for removal of all nuclear related sanctions against Iran. The deal is soon to be implemented.
"Long-term, constructive interaction with foreign capital markets and attraction of foreign investors are most important to our organization," said Bijani.
> Going International
Iran's plans to join IOSCO, which has members from over 100 countries, started a decade ago, but were halted as a result of sanctions. Now the application process has resumed.
David Wright, secretary-general of IOSCO, met with top SEO officials last week and said SEO is going to coordinate with the international organization in "technical, regulatory and supervisory fields" to facilitate Iran's membership.
Members of IOSCO are typically the securities commissions or the main financial regulators from each country. The organization's members regulate more than 95% of the world's securities markets. IOSCO's role is to assist its members in promoting high standards and act as a forum for national regulators to cooperate with each other and other international organizations.
IOSCO is structured into a number of committees that meet several times a year at different locations around the world with a permanent secretariat based in Madrid.
SEO's membership status will be discussed and decided upon in the organization's conference in Peru in mid 2016.
"Iran's membership in IOSCO will create the possibility for other institutions of Iran's financial markets to join related international organizations," Bijani said.
> Attracting Foreign Investors
"Iran is a stable country in a tumultuous region," Bijani said, "and foreign investors know that."
With an educated youth population of 80 million, vast energy and natural resources and exports in almost every industry, Iran has been heralded as the last frontier market.
Foreign investors–for now mainly portfolio investors–have been granted 111 trading codes, but they own a less than 1% stake in Iran's securities markets.
To ease and attract foreign investment, SEO is writing and reviewing appropriate directives and regulations, says the official.
Meanwhile, the Organization for Investment Economic and Technical Assistance of Iran is pursuing an easing of banking regulations so that foreigners can open accounts swiftly.
Furthermore, the organization is working on foreign exchange and money laundering regulations, while being in talks with foreign ratings agencies, so they can set up shops in Iran.
Financial reporting is also being dusted. The organization is creating English financial information websites and trying to get company financials published in English, which is a huge step.
This year will mark the first time SEO's annual report will be printed in English and Persian.
"We are sending SEO staff to English business courses, as interactions with foreign companies are increasing," Bijani said.
Finally, the organization says it is planning to create international exchanges in Iran's seven free trade zones and establish a centralized foreign exchange, so currency futures and options can be traded to hedge against fluctuations of the rial.
Bijani did not give any details about the operation mechanisms of "foreign exchange bourse", neither did he elaborate on free trade zones.
