APPLYING BANKING ACTIVITY RULES TO THE REGULATION OF VENTURE FUNDS IN UZBEKISTAN

Abstract

This article examines two options for regulating venture financing that could effectively influence the quality development of venture funds and reduce the risk of loss of assets. The research used methods of analysis of the scientific works of authoritative international experts in the field of venture finance, comparative analysis of international experience in the sphere of regulation, and practical application. The proposed methods of regulating venture financing are the establishment of an interest limit for each project and group of interrelated projects, as well as the diversification of the venture fund’s investment portfolio. These methods of regulation can be implemented directly by the capital market regulator in relation to the participants of venture financing and in the model documents of the regulator of the capital market proposed for application by the venture finance entities. The introduction of these regulatory methods is expected to reduce the risk of investing in high-risk projects. Given that investors with the lowest share of investment can occasionally influence the decision of the venture capital management company when investing in certain projects, this regulation will serve the purposes of attracting large foreign investors to local startups and the development of the risk capital ecosystem in general and domestic investments in particular. The existence of regulatory methods to protect investors through the introduction of various instruments will increase the population’s activity in venture financing.