Finance Minister: Bosnia's Federation entity to launch capital market reform

The new legislation creates the conditions for the development of modern financial services and instruments, greater market transparency, stronger investor protection, and a safer and more competitive environment for domestic and foreign investment.

"With these laws, the Federation of Bosnia and Herzegovina is taking an important step toward a modern, safe and competitive financial market aligned with European standards. We are creating more room for investment, the development of new financial services and stronger investor protection," FBiH Minister of Finance and Deputy Prime Minister of the Federation of BiH Toni Kraljevic said.

The Draft Law on the Capital Market aligns the Federation of BiH’s regulatory framework with modern European standards. This will strengthen the role of the capital market as a source of financing for the economy, with clearer business rules, a higher level of investor protection and greater investor confidence.

A particular novelty is the establishment of the first regulatory framework for providers of services related to virtual assets. In doing so, the Federation of BiH is following European and global trends in digital finance while defining business conditions, the responsibilities of service providers and regulatory oversight.

"The area of virtual assets is receiving a clear and comprehensive regulatory framework for the first time. This will increase user security, the accountability of service providers and the legal certainty necessary for the sustainable development of digital finance," Kraljevic stressed.

The FBiH Ministry of Finance is also finalizing a new Law on the Securities and Capital Market Commission, which will complete the reform of this area. The plan is to strengthen the regulator’s independence and efficiency through clearer supervisory powers, stronger institutional capacities and the application of best European practices.

Following the completion of the public consultation and consideration of proposals from experts and interested members of the public, all three laws are planned to be submitted for further legislative procedure in September.

Alongside the capital market reform, the FBiH Ministry of Finance has submitted to the FBiH Government a Draft Law on Amendments to the Law on Factoring. The proposed amendments are aimed at removing administrative barriers and strengthening factoring as an alternative source of financing, particularly for micro, small and medium-sized enterprises.

These activities are part of a broader reform agenda aimed at reducing the burden on businesses, increasing access to sources of financing and improving the business environment. Together with a reduction in contribution rates, measures to support workers and reforms of the payment system, the new laws will contribute to building a more competitive and accessible financial system.

"With these reforms, we are laying the foundations for a financial system that turns capital into investment, investment into economic growth, and growth into new jobs. We are building a safe, transparent and competitive market that gives investors confidence, entrepreneurs new financing opportunities, and citizens a stronger and more stable economy," Kraljevic said.