The big news of the month was the announcement of new entrants into Uzbekistan’s capital markets regulatory sandbox.

First was the news on 4^th November 2025 that the Central Depository of Armenia JSC became licensed as a participant in the sandbox. While Armenia does not have a budding capital market, there is a significant amount of local and Russian capital in the country, which can now find its way into Uzbekistan’s capital markets through regional brokers such as TBC Capital. Further, with the Federation of Euro-Asian Stock Exchanges headquartered in Armenia and focused on promoting capital markets development and integration, this is also likely a marketing exercise focused on broader regional integration of capital markets, which is a positive for the once closed country of Uzbekistan. It will be interesting to see how Armenia’s involvement develops, as the two countries have a close historical relationship as it relates to capital markets engagement on a capacity-building level. 

Next up, on 14^th November 2025, New York-based institutional broker-dealer Auerbach Grayson (Agco) was licensed in the sandbox. Agco operates in 125 countries, forming partnerships with local brokerages and white-labeling their services. Their local partner in Uzbekistan is our long-time broker, Avesta. The one big challenge Agco has faced up to now has been that capital markets legislation has inhibited sub-accounts for brokers, which would otherwise enable Agco to open one brokerage account in Uzbekistan and then offer sub-accounts to foreign clients without each of them having to go through the burdensome account opening process on their own. This, along with the historic lack of liquidity, is why, when we have met many of their clients on the ground in Tashkent, they tended to be in “waiting mode” as the market has historically not been developed enough for them to participate. As that is now changing, we believe Agco’s involvement in the market and the enabling of sub-accounts to help lead to a transformation of liquidity and, in due course, product offerings in the local market, which will help to advance the re-rating we so often pen about. Further, with Agco being able to provide foreign institutional clients access, and very likely custody in the near future, as part of the regulatory sandbox, this increases the odds of the local tranche of the UzNIF offering being oversubscribed. It remains to be seen what the size of the IPO allocation will be to the local market, but if fungibility is included in the new capital markets legislation, then the odds of getting a full allocation locally will be dramatically higher than fighting with the “rest of the investment world” in London for an allocation.

Finally, on 18^th November 2025, Georgia’s TBC Capital got licensed in the sandbox and will be offering brokerage services on the exchange. This comes after Bank of Georgia became the first custodian in the regulatory sandbox. This means TBC Capital, Bank of Georgia, and Auerbach Grayson are the three foreign groups that will act as a bridge into Uzbekistan. We would not be surprised to see groups such as BNY Mellon, Halyk Bank, and others also enter the market as competition and media attention grows.

So, as can be seen, market participants on the “infrastructure” side of things are increasing in preparation for more local business through IPO’s and bond issues. We have harped on for many years discussing this “chicken and egg” situation: “Why would a foreign service provider bear the expense to enter Uzbekistan if there is no business to be done?” Equally, why would a foreign investor look to invest in Uzbekistan if there was “nothing to buy”? These two issues are in the process of being addressed, and the accompanying performance of the AFC Uzbekistan Fund this autumn is hopefully just the start of a broader flow of foreign and local capital into Uzbekistan’s capital markets, which sets in motion the flywheel effect of higher asset prices, more product offerings, and more market participation and liquidity. We look forward to the momentum of news flow over the past few months continuing apace, and for this thesis to continue to unfold.