Public Disclosure Copy The World Bank Implementation Status & Results Report Capital Markets Modernization Project (P120321) Capital Markets Modernization Project (P120321) EUROPE AND CENTRAL ASIA | Azerbaijan | Finance & Markets Global Practice | IBRD/IDA | Technical Assistance Loan | FY 2011 | Seq No: 10 | ARCHIVED on 29-Jun-2016 | ISR24451 | Implementing Agencies: Azerbaijan State Committee for Securities Key Dates Key Project Dates Bank Approval Date:17-Mar-2011 Effectiveness Date:07-Nov-2011 Planned Mid Term Review Date:20-Jan-2014 Actual Mid-Term Review Date:03-Feb-2014 Original Closing Date:31-Dec-2015 Revised Closing Date:01-Jul-2016 Project Development Objectives Project Development Objective (from Project Appraisal Document) Increase the use of equity and corporate debt as financing and/or investment instruments through the adoption of an effective capital markets regulatory framework and infrastructure. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Component 1: Streamlining and Automating Market Infrastructure.:(Cost $6.00 M) Component 2: Updating and Strengthening the Legal and Regulatory Framework.:(Cost $1.90 M) Component 3: Stimulating Supply.:(Cost $1.80 M) Component 4: Capacity Building:(Cost $3.90 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Satisfactory  Satisfactory Overall Implementation Progress (IP)  Satisfactory  Satisfactory Overall Risk Rating  Low  Low 6/29/2016 Page 1 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Capital Markets Modernization Project (P120321) Implementation Status and Key Decisions The project was implemented overall successfully and is closing on July 1, 2016 after five years of implementation. Project development objective (PDO) was achieved, as indicated by the significant growth of securities issue during the life of the project and confirmed by the project indicators. Eight out of nine indicators have been fully met or exceeded the target. The new legal and regulatory framework have been established and enforced, and the new integrated capital market information system (CMIS) for securities trading, clearing, settlement and supervision was installed, tested and became fully operational. The qualitative changes achieved during the life time of the project are essential for the future market development in a sustainable and healthy way. Despite the slight underperformance of one of the result indicators (i.e. companies with listed equity) the progress achieved so far from the qualitative point of view responds to the project spirit and objectives and can be considered essential and remarkable. Streamlining of the BSE listing procedures and cleaning up the market is an important reform towards creating more transparent, reliable and investment attractive environment. Once the market returns to normal upon macroeconomic and regional stabilization, the reforms undertaken under the project will enable issuers to tap the markets and resume issuance in a more effective, efficient and transparent manner. As of June 2015 supervision mission nearly all the deliverables envisioned under the project have already been delivered and endorsed by the implementation agency. These include: 100% deliverables under Components 1, 2, and 3 and nearly full completion under Component 4, with just two deliverables outstanding under Component 4, which are expected to be finalized and endorsed by the implementation agency before end June 2016. Procurement under the project has been completed. Disbursement of the loan funds are at 98% in June 2016, with several outstanding payments due in the next few months. Funds under the capital market component of the FSMP grant TF00975 has been fully disbursed by October 2015. 6/29/2016 Page 2 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Capital Markets Modernization Project (P120321) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Low  Low Macroeconomic  --  Substantial  Substantial Sector Strategies and Policies  --  Low  Low Technical Design of Project or Program  --  Low  Low Institutional Capacity for Implementation and Sustainability  --  Low  Low Fiduciary  --  Low  Low Environment and Social  --  Low  Low Stakeholders  --  Low  Low 6/29/2016 Page 3 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Capital Markets Modernization Project (P120321) Other  --  --  -- Overall  --  Low  Low Results Project Development Objective Indicators PHINDPDOTBL  Increased issuance of corporate bonds (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.90 20.70 14.10 3.80 Date 15-May-2011 10-Oct-2015 31-May-2016 30-Jun-2016 PHINDPDOTBL  Increased number of companies with listed equity (accumulative) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 4.00 5.00 8.00 Date 15-May-2011 10-Oct-2015 31-May-2016 30-Jun-2016 PHINDPDOTBL  Improved price transparency (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 100.00 100.00 90.00 Date 15-May-2011 10-Oct-2015 31-May-2016 30-Jun-2016 Overall Comments Intermediate Results Indicators 6/29/2016 Page 4 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Capital Markets Modernization Project (P120321) PHINDIRITBL  Ratio of market participants electronically linked to market infrastructure (trading, clearing and settlements) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 100.00 100.00 100.00 Date 15-May-2011 10-Oct-2015 31-May-2016 30-Jun-2016 PHINDIRITBL  Enactment of a new Capital Market Act (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 15-May-2011 10-Oct-2015 31-May-2016 30-Jun-2016 PHINDIRITBL  Promulgation of capital markets regulation required upon enactment of Law (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No In process Yes Yes Date 15-May-2011 10-Oct-2015 31-May-2016 30-Jun-2016 PHINDIRITBL  Number of companies involved in the listing advisory program (debt and equity) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 16.00 16.00 15.00 Date 15-May-2011 10-Oct-2015 31-May-2016 30-Jun-2016 6/29/2016 Page 5 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Capital Markets Modernization Project (P120321) PHINDIRITBL  Increased of the threshold pass rate of the Financial Certification examination for market participants (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 50.00 75.00 75.00 75.00 Date 15-May-2011 10-Oct-2015 31-May-2016 30-Jun-2016 PHINDIRITBL  Consumer Awareness of Capital Market Instruments (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 24.00 56.00 59.38 45.00 Date 15-May-2011 31-Dec-2014 31-May-2016 30-Jun-2016 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P120321 IBRD-80240 Effective USD 12.00 12.00 0.00 11.77 0.23 98% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P120321 IBRD-80240 Effective 17-Mar-2011 22-Sep-2011 07-Nov-2011 31-Dec-2015 01-Jul-2016 Cumulative Disbursements 6/29/2016 Page 6 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Capital Markets Modernization Project (P120321) Restructuring History Level 2 Approved on 06-May-2015 Related Project(s) There are no related projects. 6/29/2016 Page 7 of 7 Public Disclosure Copy