The Law on Securities Markets 2007 sets forth the dual listing requirements for legal entities that wish to place their securities on a foreign stock exchange. The law specifies the conditions under which resident entities may issue shares outside Kazakhstan, but also raises questions as to which entities are subject to it and whether it applies to previously issued shares in addition to new issuances, among other things.
The Agency for the Regulation of the Activity of the Regional Financial Centre Almaty (RFCA) has developed new listing rules for the special trading platform of the RFCA. The new rules do not apply to the entire Kazakhstan Stock Exchange, but similar regulations are due to be introduced by September 2008.
Parliament recently amended the Law on Securities Markets to simplify international public offerings of Kazakh companies. The revised provisions have been successfully tested in the initial public offering of the production arm of Kazakhstan's state oil and gas company on the London Stock Exchange.
In a major step towards the liberalization of currency operations and the export of capital, Kazakhstan adopted a new currency control law in June 2005. In December 2005 the National Bank introduced a number of regulations which clarified the new provisions and expanded the range of foreign investments and derivative transactions open to Kazakh investors, removing the need for a licence from the national bank.
A new regulation permits certain qualified non-residents to become members of the Kazakhstan Stock Exchange, the country's only securities trading establishment. However, the membership requirements include the existence of certain information exchange agreements between Kazakhstan and the non-resident member's country of incorporation; as yet, there are no such treaties with other jurisdictions.
The National Bank of Kazakhstan has approved regulatory amendments which introduce the concept of termless (hybrid) subordinated debt obligations which may be included in Tier 1 capital. This new provision is intended to address the shortage of capital for banks, a consequence of the explosive growth in bank assets brought about by high oil prices and the overall expansion of Kazakhstan's economy.
In a move to restrict the influx of funds into Kazakhstan, and into the domestic property market in particular, the Kazakh Parliament has recently approved a number of changes to the legislation governing the securities market.
In late 2004 the Kazakhstan government adopted a number of regulations setting forth basic investment rules and limits for investment funds to supplement the new Law on Investment Funds. Among other things, it identifies the investment instruments in which funds that are not created as 'risk funds' may invest.
The Central Depository, which registers transactions and holds securities traded on the Kazakhstan Stock Exchange as a nominal holder, has opened an account with Clearstream Banking Luxembourg to facilitate the accounting of securities and funds of the depository's clients. This long-awaited link with global markets should simplify cross-border securities trading.
In an unexpected move, the National Bank of Kazakhstan has effectively prohibited the investment of pension assets in debt securities issued by special purpose vehicles (SPVs) owned by Kazakhstan companies, unless such SPVs meet minimum rating requirements identical to those applicable to the securities of other foreign issuers. New rules on depositary receipts have also been approved.
The new Securities Market Law regulates the issue, placement, circulation and redemption of securities and other financial instruments. The law aims to ensure the efficient operation of the securities markets, protect the interests of investors and safeguard competition. Meanwhile, new rules have been introduced on the management of securities portfolios.
New resolutions issued by the National Bank of Kazakhstan have established rules for evaluating the financial viability and stability of brokers, dealers and securities registrars. The bank has also established new reporting requirements to increase transparency and efficiency in securities market operations.
A new regulation sets out the rules for the issue, placement, circulation, repayment and servicing of mid-term foreign currency-denominated state securities issued by municipal executive authorities. The list of securities in which pension funds may invest has also been expanded.
Recent National Securities Commission regulations of interest to securities market players include new reporting requirements for pension funds and rules on the assignment of national identification numbers to state securities.
The National Securities Commission has issued regulations on the placement of international bonds on the Kazakh securities market, and has introduced a standard method for writing off securities in investment accounts. The National Bank of Kazakhstan's authority to deal with securities and derivatives has also been increased.
The National Securities Commission recently adopted several new acts aimed at protecting the rights and legally protected interests of investors in the securities market and of fund depositors. They include regulations on second-tier banking activities and pension funds.
The government and the National Securities Commission have adopted a number of new resolutions relating to additional share issuances made by joint stock companies, hard currency-denominated Treasury bills, pension funds and government borrowing. This update has the details.
Including: Legislative Framework; National Securities Commission; Organized Market; Professional Participants and Nominal Holders; Share Transfer; Offering Restrictions; T-Bills; Private Securities; Bonds; NBK Notes; Repos and Reverses; Futures, Forwards, Options & Swaps; Pension Funds; Blue-Chip Programme; Documentation
Over the past 12 months the National Securities Commission of the Republic of Kazakhstan has continued to enact regulations for the further development and implementation of the legal framework that governs securities and the securities market. This update outlines the most important of these.