Serbia: in 2002 we were retained by the Privatisation Agency of Serbia, funded by the World Bank, to undertake a Review of Capability of Capital Markets to Support Privatisation.  Our task was to review the scope and capacity of capital markets organisations and institutions needed to support the privatisation programme, including the efficiency of stock exchanges, registration and clearing and settlement systems and procedures and the range of institutional investors; to assess the existing capital markets legal and regulatory framework; to submit a report to the Privatisation Agency summarising findings and identifying key weaknesses and gaps which currently exist within capital markets and their regulatory organisations that could substantially affect the ability to carry out the envisaged privatisation successfully and finally to develop a procedure for the sale of minority shares of the Share Fund in accordance with the existing and proposed regulatory framework.

The work was undertaken in two phases: firstly a review of the legislative and regulatory framework governing capital markets, including ownership and transfer rights; the method of offering minority shares through the market by an auction process; the range of companies available for privatisation; the actual and potential demand from both domestic and foreign sources for shares in the privatisation offers; the efficiency and operation of the stock market, including the attraction of specialised bonds resulting from liberation of frozen currency deposits; corporate governance and disclosure and the capacity of the regulator and of the Share Fund.  The second phase consisted of submitting a report with recommendations on the strategy and methodology for sales of State shares through a variety of means, on the attraction of foreign investors and on the development of domestic institutional investors.