Market infrastructure - Kazakhstan
Institutions and organisation
The central bank and is also one of the prime regulators. Following the country’s independence in 1991, the banking system was formed in 1993 and the Banking Law was adopted in 1995.
The NBK reports directly to the President of the Republic of Kazakhstan and is regulated by various presidential decrees and international agreements. The Bank’s main objectives are to minimise inflation and secure stability of the national currency, the Tenge (KZT).
The NBK regularly inspects local banks and local branches of foreign banks.
The National Bank of Kazakhstan (NBK) is the central bank and acts as sole prime regulator, which regulates the securities market, insurance and pension-funds industries and the banking sector. It supervised the markets and had responsibility for issuing bank, brokerage, custodian, depository and registrar licences, and for certifying new issues.
The Central Securities Depository Joint-stock Company (KACD) is the only securities depository in Kazakhstan. It was originally established in 1994 as a division of the National Bank of Kazakhstan. In 1997 it was re-formed as the Central Securities Depository Joint-Stock Company (KACD), a standalone joint stock company owned by the market participants. Its major shareholders include the National Bank of Kazakhstan (54.98 %), the Kazakhstan Stock Exchange Joint-Stock Company (34.69 %), 13 banks (7.01 %), 7 brokerage companies (3.32 %) (1 July 2016).
There are no minimum capital requirements for membership to the KACD. However a pre-requisite of membership is a Professional Participants licence from the National Bank of Kazakhstan for which there are capital adequacy requirements.
Securities are fully dematerialised and all trades executed on KASE are required to settle at the KACD. The Depository segregates client assets held for participants through the use of segregated client sub accounts it provides (almost) simultaneous DVP/RVP settlement and RTGS via the National Bank payment clearing system).
Settlement and registration occur simultaneously at the KACD so settlement is irrevocable on Settlement Day.
KACD is recognised as the National Numbering Agency (NNA) eligible to give to financial and non-financial instruments the ISIN and CFI in accordance with the international standards.
The Kazakhstan Stock Exchange Joint-Stock Company (KASE) which members are the professional participants of securities market and other legal entities eligible for making the deals with other financial instruments except the securities. The stock exchange must have not less than ten members of professional participants of securities market. The members of stock exchange can be the foreign legal entities if they comply with the following requirements:
- To be a member of stock exchanges which belong to the World Federation of Exchanges.
- To have a licence of the authorised body in the country of residence on brokerage and/or dealer activities. Access of those foreign legal entities to trades on the stock exchange is possible in cases where the existence of international agreements on cooperation and the exchange of information among authorised bodies is an area of supervision on brokerage and/or dealer.
The KASE is a self-regulated joint stock company whose largest shareholder is The National Bank of Kazakhstan (50.1001 %); the second largest shareholder is Venture capital fund Centras (6.8815 %). KASE has 58 shareholders (1 June 2017).
As of 1 October 2017, the KASE listed 149 companies.
The Managing Board of the KASE has approved the reclassification of securities in the KASE official list in accordance with the new listing requirements established by the FSA’s Resolution No.77, which came into force 1 September 2008.
Local brokers are not allowed to trade on OTC market with securities of listing companies.
The National Bank of Kazakhstan manages the KZT inter-bank payment clearing system, the Kazakhstan Interbank Settlement Centre (KISC). Payments are made electronically via the Interbank System of Money Transfer (ISMT) between correspondent accounts maintained by the banks at the NBK Payment Centre.
- Opening of accounts
- Stock market services:
- Safekeeping of securities
- On-exchange trade settlements
- Settlement on FOP or DVP basis
- Corporate OTC trade actions processing
- Exercise of securities ownership rights
- Reporting services
- Issuer services
- Paying agent services
- Numbering agency services
- Cash settlements in RUB and foreign currency
- Real-time RUB settlements (via BESP)
- Information services
- Electronic documents transit
- SWIFT connection outsourcing
Ministry of Finance of Kazkhstan(MinFin) is an executive government agency of the country performing the public administration function in finance, budgeting and taxation by ensuring the development and adherence to the legislation for budgeting, inland revenue and accounting purposes, prevention of economic offences
Main competences and authority of the Ministry of Finance are as follows:
- Preparation of the Annual State Budget of Kazakhstan;
- Monitoring over the execution of the State Budget, reporting on the budget performance, submission of the budget execution report;
- Public funds management for the Government of Kazakhstan;
- Definition of major directions of the tax policy and improvement of tax legislation in the country;
- Sovereign debt management;
- Cooperation and coordination with international financial institutions and bilateral partners;
- Cooperation with international rating firms on sovereign rating of the country.