Securities and Exchange Organization of Iran obligates banks and credit institutions to apply international standard frameworks (IFRS) to their accounting reports.
Mandatory standardization (IFRS) in the reports of large companies in the bourse is a great leap forward in attracting foreign investment. Coupled with the unification of the exchange rates this has the potential to create a great change in foreign investments in the bourse.
“The lack of access to transparent information in a standard international language is one of the major problems for the attraction of foreign investors. Foreign investors do not have access to neither internationally standardized financial statements nor are statements available in English”, notes Abbas Nikchery, CEO of Mellat Bank Brokerage.
Under the directive by the Securities and Exchange Organization (SEO) banks, credit unions, insurance companies and companies with at least 1,000 billion IRR ($31m) capital must follow international standards. This allows foreign investors to easily analyze the larger industries.
Another point of interest is the unification of the exchange rates as foreign investors are confused as to which exchange rates will be used to import and export their capital. Unified exchange rates will allow investors to avoid optimistic or pessimistic forecasts and rather use realistic forecasts for the Iranian capital market.
Carrying out this plan will allow the Iranian capital market to become transparent and reliable for foreign investors.