SEO to boost international stock exchange project in Free Trade Zones

Iran’s Securities and Exchange Organization (SEO) is gearing up to breathe fresh life into its long-awaited international stock exchange project situated within the country’s free trade zones, thanks to a revitalized partnership with the Free and Special Economic Zones High Council. During a collaborative meeting hosted in Tehran, high-ranking officials from the SEO, the council’s secretariat, and various economic and investment institutions engaged in talks to extend the operational license for the international exchange, scrutinize domestic and foreign shareholder structures, and assess the necessary trading infrastructure. The meeting saw a unanimous agreement on expediting the re-launch of the project.

Hojjatollah Seyedi, the Head of SEO, highlighted the advanced progresses made in laying the foundation for the international exchange, emphasizing that the required trading and settlement infrastructure is already in place. The focal point now is to set the stage for market operations and formal listings in line with the endorsed regulatory framework. Seyedi outlined three pivotal aspects of the project – licensing, shareholder composition, and infrastructure, none of which he perceives as roadblocks to its success.

In advocating for a proficient shareholder base, Seyedi leans towards financial institutions over commercial or industrial entities, citing past encounters which unveiled the potential for non-financial entities to disrupt exchange operations’ stability. He cautioned against concentrated ownership, asserting that the absence of a single individual or institution holding a predominant stake is vital for the project’s success, favoring distributed ownership amongst credible financial entities.

Foreign investors are welcomed by Seyedi, provided they are reputable financial institutions compliant with Iran’s legal and financial structure. “We stand prepared to vet proposed domestic and foreign shareholders to establish a stable, professional, and scalable governance system,” he affirmed.

Reza Masrour, the Secretary of the High Council of Free and Special Economic Zones, urged the speedy resolution of lingering administrative obstacles, emphasizing the national scope of the project beyond free zones. Despite past lags in progress, Masrour expressed an unwavering commitment, backed by renewed coordination from the SEO, to propel the project forward.

Notably, regulations for establishing the exchange were sanctioned in 2018, and a preliminary license was granted in 2023. However, the license’s nine-month validity has lapsed, prompting a proposal for extension to two or three years to ensure sufficient time for comprehensive implementation.

The forum featured delegates from Iran’s Foreign Investment Company (IFIC), Iran Currency and Gold Exchange, Organization for Investment, Economic, and Technical Assistance, alongside private investment advisory firms. The rebooting of the international stock exchange falls within Iran’s overarching strategy to allure foreign capital, deepen its financial markets, and elevate the global competitiveness of its free trade zones.