Mass Privatization Models

Based on the East Europe experience, there are three mass privatisation models:

1. in the Free market model, the citizens receive vouchers with a specific face value expressed in financial terms. These vouchers can be tradable and marketable. They are bearer documents and they can be exchanged in the share of joint stock companies or for the share certificate of newly created investment funds. The typical example is Russia.

2. in the Mixed model, citizens receive coupons, with a specific number of points, which are usually not tradable and not exchangeable. They are registered securities. The exchange mechanism is closely controlled by state. The typical example is the case of ex-Czechoslovakia.

3. in the Centrally regulated model, the citizens receive share certificates without face value. These certificates are registered securities. They cannot be exchanged, cannot be traded and cannot be given to third persons. These certificates have to be deposited in the centrally established national investment funds. The funds also receive the shares of all joint stock companies, which are designed for mass privatization, and after market valuation of the shares, the funds exchange the shares for the certificates. The typical example is Poland.

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