The Cabinet of Ministers of Uzbekistan has approved regulations for remote digital identification of clients in the securities market. Remote customer identification, which is already practiced in many countries, will be allowed in 3 months. This decision is a significant and long-awaited step for the development of the capital market in Uzbekistan.
   Previously, residents and non-residents of Uzbekistan had to visit a broker's office in person to undergo identification. The alternative option was to send notarized copies of documents, which involved additional steps such as apostille/legalization and notarized translation into Uzbek. This process was time-consuming and incurred expenses for notary services, translation, delivery, and apostille, among others.
   Now clients can be remotely identified by either an employee of a broker using provided information or through automated programs and applications. The client's data is cross-checked with government databases, and if necessary, an online video conference can be conducted for visual identification. The client could sign the contract using the Unified Identification System (OneID) with an electronic signature and accept the public offer. Brokers have the right to limit transactions and forgo remote identification if risks are detected.
   This solution enables clients to open brokerage accounts without visiting an investment intermediary's office. It is applicable to both citizens and foreign individuals, as well as legal entities for identifying authorized persons. This simplifies the process, reduces transaction costs, and attracts new clients who were previously hesitant to go through the traditional account opening procedure.
   The decision is expected to increase the number of investors and traders, facilitating access to capital for local companies, boosting market liquidity, and improving the efficiency of stock and bond pricing.
   Investment intermediaries must establish restrictions in their internal rules to assess the risk level for clients who have undergone digital identification. These restrictions pertain to the maximum amount allowed for a single transaction, the number of transactions permitted within a calendar month, and the maximum withdrawal limit for clients. These measures help manage and mitigate potential risks associated with client activities.
   The implementation of remote digital identification is anticipated to result in a faster growth rate of both accounts and transactions. Brokers will gain access to a new pool of clients who were previously inaccessible due to restrictions. To effectively leverage this feature, brokers need to establish their infrastructure or utilize third-party systems for client identification. However, along with the new opportunities, there are additional obligations related to information security, anti-money laundering measures, adopting a risk-weighted approach to client interactions, implementing transaction limits, and taking other necessary actions to ensure regulatory compliance.

                   Number of transactions carried out on the Republic Stock Exchange "Tashkent"