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AMENDMENTS TO THE BANKING LAW
- The following amendments were made to the Law of the Republic of Kazakhstan dated 31 August 1995 No. 2444 "On Banks and Banking Activities in the Republic of Kazakhstan" (the "Banking Law").
- On June 30, 2025, amendments were made to the effect that a non-resident bank of the Republic of Kazakhstan is liable for the obligations of its branch operating in the territory of the Republic of Kazakhstan.
- Also, in the new version of Article 8 of the Banking Law, new
types of organizations have been added, in relation to which the
ban is lifted or exceptions are specified. In the list of
exceptions to the bans on banks and bank holdings, when they can
create, acquire shares and shares, new categories of organizations
related to IT, platforms, and security have appeared:
- Organizations (residents and non-residents of the Republic of Kazakhstan) engaged in the offer and sale of goods, works and services on the electronic trading platform and (or) information and advertising trading platform, and (or) the Internet platform, as well as on the provision of their sites and platforms for use by third parties for the above purposes;
- Organizations (residents and non-residents of the Republic of Kazakhstan) engaged in the development, implementation and maintenance of software, equipment and devices in the field of information and communication technologies and (or) systems for working with biometric identification;
- Organizations (residents and non-residents of the Republic of Kazakhstan) engaged in the development, maintenance and implementation of software in the field of information security and (or) anti-fraud;
- Organizations (residents and non-residents of the Republic of Kazakhstan) engaged in the development and maintenance of software using cloud computing technologies;
- Organizations (residents and non-residents of the Republic of Kazakhstan) engaged in activities to ensure information, telecommunication and technological interaction between participants of the technological platform.
- That is, the legislator has added technological and platform areas as those in which banks/holdings are allowed to participate (subject to certain conditions).
- A new clause was introduced, which establishes that the amount of investment of a bank or bank holding in the charter capital of such organizations (those related to the above technological areas) should not exceed the threshold established by the regulatory act of the authorized body. A limit on the total amount of such investments has also been added. That is, in addition to the fact that participation is allowed, a quantitative limit is introduced.
- Previously, Article 8 of the Banking Law has already included some innovative technologies: artificial intelligence, blockchain, and others. The new edition has expanded this list, specifying specifically cloud computing, biometrics, information security systems, as well as platform online trading platforms and advertising platforms.
- The amendments made to Article 11-1 of the Banking Law have
strengthened regulatory control over subsidiaries through:
- exact reference to Article 40 of the Law;
- additional ground for revocation of permits (in case of violation of capital);
- simplification of certain procedures (electronic payment, clarification of documents for non-residents);
- elimination of duplicate grounds for refusal (risk control systems are now regulated in other sections).
- The provisions of Article 13-1 of the Banking Law have also been significantly updated. The legislator has clarified the conditions for the admission of non-resident banks to the market of Kazakhstan, as well as strengthened the requirements for documents, financial stability and business reputation. First of all, a new requirement has been introduced: a non-resident bank must be a legal entity under the legislation of the country of its residence. The condition for total assets has also been clarified - they must be at least 20 billion US dollars. In terms of interaction with foreign regulators, it is established that in cases where the national law of the country requires a separate permit to open a branch abroad, the non-resident bank is obliged to attach a copy of such consent.
- With regard to the license, the wording has been changed: now we are talking about the availability of a valid license (permit) to conduct banking and other transactions with the mandatory disclosure of the list of such transactions. At the same time, the non-resident bank and its branch must confirm the absence of violations of capital adequacy ratios and liquidity ratios over the past twelve months.
- The list of documents attached to the application has been
revised. In addition to the decision to open a branch and the
regulations on it, the following is required:
- information on persons owning directly or indirectly ten or more percent of shares (participatory interests) and controlling persons;
- an extended package of financial statements – not only for the last two years, but also for the completed quarter, and in some cases alternative forms, if the audit confirmation is not yet ready;
- data on managers.
- At the same time, a relaxation has been introduced: if a non-resident bank has a credit rating of at least "A-" , a number of information about owners and managers may not be submitted.
- The grounds for refusing to issue a permit have also been expanded. In addition to noncompliance with the established conditions, now they include the provision of false information, the lack of impeccable business reputation among the managers of the branch, as well as the insufficiency of the business plan. In addition, a rule has been introduced on the revocation of a previously issued permit in case of inaccurate information in the documents.
- Finally, the provisions on the validity of the permit have been clarified: it remains in force until the branch obtains a license, but can also be canceled upon suspension or revocation of the license of a non-resident bank in the country of its residence, or in cases provided for by the new paragraphs 3-1 and 4 of Article 13-1 of the Banking Law.
- Article 17-1 of the Banking Law has also been significantly
amended. The changes are aimed at clarifying the status of bank
holdings and large participants of the bank, as well as
strengthening control over the sources of funds and disclosure of
information. Previously, a non-resident legal entity had to meet
the minimum rating of one of the international agencies in order to
obtain the status of a bank holding company or a major participant,
but now the conditions have become more stringent:
- availability of a license (permit) for financial activities in the country of origin;
- availability of a separate consent or permission from the financial supervisory authority of its jurisdiction to hold shares in a Kazakh bank (if such consent is required);
- the presence of a minimum rating;
- mandatory subordination to consolidated supervision.
- Thus, the status of a non-resident bank holding company is now possible only if these conditions are fully met.
- A new paragraph 3-1 has been introduced in Article 17-1 of the Banking Law, detailing what funds can be used to purchase bank shares: for individuals: income from labor or entrepreneurial activities, cash savings, as well as gifts, inheritance, winnings — but only within 25% of the value of the acquired shares; for legal entities: income from business activities or contribution to the charter capital; for financial institutions: assets, provided that the transaction does not violate capital adequacy and liquidity ratios.
- In the new version, Article 21 of the Banking Law stipulates that only non-resident legal entities (and not individuals, as before) can act as founders of resident banks. An application for permission to open a bank must now be accompanied by a copy of the consent (permit) of the financial supervisory authority of the non-resident country to own shares in a resident bank of the Republic of Kazakhstan or a confirmation that such consent is not required. The same requirements apply to cases where a bank is created through a voluntary reorganization of a microfinance organization in the form of conversion into a bank.
AMENDMENTS TO THE LAW ON THE SECURITIES MARKET
- The following amendments were made to the Law of the Republic of Kazakhstan dated 2 July 2003 No 461-II "On the Securities Market" (the "Securities Market Law") in the 2nd quarter of 2025.
- In the definition of "professional organization" (Article 1), the circle of founders was replaced: it was "a legal entity created by professional participants of the securities market" , it became "a legal entity created by financial organizations" in the form of an association (union) in order to establish uniform rules and standards for their activities in the securities market.
- The concept of "foreign accounting organization" has been introduced, which means "a foreign organization that is a client of the Central Securities Depository of the Republic of Kazakhstan, which, in accordance with the legislation of the state of which the foreign accounting organization is a resident, performs functions similar to the functions of a nominee holder established by paragraph 1 of Article 59 of this Law, taking into account the requirements determined by the regulatory legal acts of the authorized body " .
- A new paragraph 4 has been added to Article 59 of the Securities Market Law, introducing a regime for a foreign accounting organization – a foreign client of the Central Depository (CD), which performs functions similar to that of a nominee holder. Payment of dividends and remuneration on serial securities held on the personal account of a foreign accounting organization opened in the central securities depository 's accounting system shall be made to the holders of these serial securities through the foreign accounting organization.
AMENDMENTS TO THE LAW ON CURRENCY REGULATION AND CURRENCY CONTROL
- In the second quarter of 2025, the Law of the Republic of Kazakhstan dated 2 July 2018 No 167-VI "On Currency Regulation and Currency Control" (the "Law on Currency Regulation") was amended to clarify the functions of supervisory authorities and revise the approach to the introduction of temporary currency measures.
- Article 22 clarifies that the authorized bodies, when exercising control, have the right to identify not only violations, but also the conditions that contributed to their commission, which expands the toolkit of currency supervision.
- Chapter 6 of the Law on Currency Regulation received a new name - instead of "Special Currency Regime" , "Measures to protect the balance of payments" is now used.
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