AFSA Publishes Notice on the Expected Approach to Event-Based Contracts in the AIFC

The Astana Financial Services Authority (AFSA) has published Notice on the Expected Approach to Event-Based Contracts in the Astana International Financial Centre (AIFC). The initiative aims to support innovation and the further development of derivative markets in the AIFC while ensuring that new products are tested within a controlled regulatory environment. 

Event-Based Contracts are derivative instruments whose payout depends on whether a specified future event occurs or does not occur. Under AFSA’s approach, tested contracts may reference financial and economic events only. 

Testing will be available only within the AIFC FinTech Lab. AFSA will assess applications individually using a risk-based approach, taking into account the proposed product, business model, and the applicant’s capabilities and resources. Event-Based Contracts may be offered only to Professional Clients and eligible Semi-professional Clients who have passed the required appropriateness assessment. They will not be available to the general retail public. 

The framework also provides a range of safeguards. Event-Based Contracts must be fully collateralised, and margin or leverage is not permitted. Testing Firms must provide clients with clear information about the product and its risks and obtain acknowledgement that the client understands the binary, all-or-nothing nature of the contract before trading. 

AFSA will also apply market abuse and financial crime requirements to Event-Based Contract activities. Testing Firms will be required to maintain appropriate systems and controls to identify and prevent market abuse and financial crime. 

The FinTech Lab allows AFSA to monitor testing arrangements, including contract specifications, client profiles, and transactions. AFSA may impose or amend conditions and limits, restrict particular products, or require testing to cease where risks to clients, market integrity, or AFSA’s regulatory objectives arise. 

The approach is set out in the AFSA Notice on the Expected Approach to Event-Based Contracts in the AIFC, available here. 

Reference:  

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), established in accordance with the Constitutional Law of the Republic of Kazakhstan “On the Astana International Financial Centre” for the purposes of regulating financial services and related activities in the AIFC. AFSA administers the AIFC Regulations and Rules and is responsible for the authorisation, registration, recognition, and supervision of financial firms and market institutions in the AIFC. afsa.kz  

The Astana International Financial Centre (AIFC) is an independent jurisdiction where investors and businesses meet emerging opportunities of Kazakhstan and Central Asia in a transparent and sustainable environment backed by the principles of English Common Law. aifc.kz  

Public Relations and Communications Division of AFSA, [email protected]