In the first half of 2023 the number of fund managers at AIFC has grown to 30 (up from 25 in first half of 2022), with AIFC continuing to be the jurisdiction of choice for large firms. The dynamics of growth of fund management companies is the best indicator of investment appeal of a country and the figures shown is evidence that AIFC is turning into a regional investment hub.

Assets under Advisory went up by 437% in the first half of 2023, while Assets under Management increased by 43% compared with the same period last year.  Additionally, assets of investment funds saw a 199% rise and investments of brokerage clients secured an increase of 721% compared to a similar period last year.

In June this year the enhancements to the AIFC Asset Management Framework were introduced, which can be considered as a significant step in supporting the growing asset management industry in the AIFC. These enhancements are geared towards aligning AIFC with evolving global trends, catering to the needs of investors, and ensuring a competitive edge in the international financial landscape.

AIFC introduced Limited Partnerships and Protected Cell Company as new types of fund vehicles for fund incorporation. Besides, AIFC expanded the list of Specialist Funds, which means that more fund structuring options became available for fund managers: Umbrella Fund, Fund of Funds, Master-Feeder Structure.

Chief Executive Officer of AFSA Nurkhat Kushimov: “Smart and efficient investing are the fundamentals of building wealth for individuals and economies. When the groundwork such as predictable regulations is there for investments to work for people and the country, then investing becomes easy to do. And this is exactly what AFSA does – our role is to build the necessary infrastructure for unimpeded investment flows.”

AFSA is the sole jurisdiction in the region to offer businesses a comprehensive legal regime for attracting, implementing and protecting investments based on AIFC Law’s principles, norms and precedents of the law of England and Wales and standards of the world’s leading financial centres.

Reference: 

Assets under Advisory (AUA) means the market value of the client’s portfolio, for which the client seeks advice from the investment advisor.

Assets under management (AUM) is the total market value of the investments managed by a person or entity on behalf of investors.

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), which is 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.

Around 2,200 firms from 78 countries are registered in the AIFC. These firms provide banking, insurance, investment, professional and other services. The range of financial services offered at the AIFC is comparable to the list of services available in long-established financial centers of the world, such as London, Hong Kong, Singapore, Dubai and others. www.afsa.kz

The Astana International Financial Centre (AIFC) is an independent jurisdiction with a favourable legal and regulatory environment and a developed infrastructure for starting and doing business, attracting investment, creating jobs and developing Kazakhstan’s economy. https://aifc.kz/ 

Contact information:

Public Relations and Communications Division of AFSA:

+7 (717) 264 73 43; +7 7172 61-37-45 email: [email protected]

The Astana Financial Services Authority (AFSA) has issued two Consultation Papers to seek suggestions from the market on the proposed:

1. Rules and mechanisms of cooperation of Unbacked Digital Asset Exchanges and/or the Centre Participants authorised to carry out digital assets-related activities with second-tier bank of the Republic of Kazakhstan (AIFC Rules). (“Rules of cooperation”). To read the paper please follow this link.
2. List, timing and procedure of report submission by digital asset exchanges of the Astana International Financial Centre (AIFC Rules). (“Rules of reporting for cryptoexchanges”). To read the paper please follow this link.

The proposals in these papers will be of interest to current and potential AIFC participants, second-tier banks of Kazakhstan as well as wider digital asset market and stakeholders.

The amendments to the Constitutional Law of Republic of Kazakhstan “On Astana International Financial Center” № 176-VII adopted on 30 December 2022 (that came into force on 01 April 2023) required implementing these Rules. These Rules are aimed to provide a legal framework for Digital Asset Service Providers cooperating with commercial banks of Kazakhstan following completion of the Pilot project for the cooperation of the cryptoexchanges with second-tier banks of Kazakhstan (“Pilot Project”).

Proposed draft Rules were developed taking into consideration feedback received from Pilot Project, Pilot Project Rules, AIFC Rules and Regulations, Acting Law of Kazakhstan and recommendations of relevant standard-setting bodies, such FATF and IOSCO.

Proposed draft Rules were developed taking into consideration feedback received from Pilot Project, Pilot Project Rules, AIFC Rules and Regulations, Acting Law of Kazakhstan and recommendations of relevant standard-setting bodies, such FATF and IOSCO.

The proposed amendments in this Consultation Paper on Rules of cooperation contain the following proposals regarding the:

• Rules describing procedures for opening of the accounts in commercial banks of Kazakhstan by cryptoexchanges and other digital asset service providers authorized in AIFC;
• Client classification, capital, admission of digital asset to trading, client asset segregation requirements and reference to other AIFC rules and regulations;
• Documents (or reference to Acting law of Kazakhstan) that must be requested by commercial banks of Kazakhstan at the opening of account from cryptoexchanges and DASPs;
• Anti-money laundering and terrorist financing requirements that are applied during establishment of business relations with cryptoexchanges and DASPs;
• Reporting requirements by second-tier banks of Kazakhstan to NBRK;
• Prohibitions or limitations on certain digital asset-related products on Retail clients – residents of Kazakhstan.

The proposed amendments in this Consultation Paper on Rules of reporting for cryptoexchanges contain the following proposals regarding the:

• detailed requirements on cryptoexchanges to disclose financial and other performance data to AFSA and NBRK.
• submission on a monthly basis data on trading volumes, number of clients, volume of custodied assets etc.

We invite comments from interested stakeholders.

Once we receive your comments, we shall consider if any refinements are required to this proposal.

AFSA prefers to receive comments by email at [email protected]

The Guidance clarifies principles and framework under which authorisation to perform the activities that are regulated under the AIFC Financial Services Framework Regulations are required.

The Guidance may be of interest to potential applicants for a licence and existing licence holders who seek modifications to the licence.

In addition to the regulatory perimeter, the Guidance contains provisions on the AIFC currency perimeter, which sets boundaries for offering services to the residents of the Republic of Kazakhstan and is regulated by the AIFC Rules on Currency Regulation and Provision of Information on Currency Transactions in the AIFC.

The Guidance includes the following chapters:

1. Introduction – This chapter gives introduction on the application, purpose, overview and status of the Guidance, brief description on the acting Law of the AIFC, terms of updating the Guidance, defined terms and list of general guidance to be found in the Guidance;
2. Authorisation (Getting Regulated) – This chapter contains several big sections with description of general requirements and provisions related to becoming regulated by AFSA.

• Financial Promotion and Communication – This chapter describes AFSA’s approach to financial promotion, gives examples of communications to be considered as financial promotion;

1. Currency Regulation – This chapter outlines the currency regulatory perimeter, currency residency, services and transactions of the AIFC participants and reporting on them;
2. Unregulated Activities – This chapter gives brief guidance about AFSA’s approach to unregulated activities;
3. Miscellaneous – This chapter gives guidance on certain AML and CFT requirements applicable to firms if their activities constitute them being Designated Non-Financial Business and Profession.

The full Guidance is available at this link. 

AFSA staff’s capstone project on Digital Asset Service Providers (DASP) has been named one of the best examples in an executive education programme by Cambridge Centre for Alternative Finance and Cambridge Judge Business School. Almas Serikuly, Gauhar Kattabek, Zarina Seidakhmetova, and Zhali Ualiyev participated in the Launch and Celebration of FinTech and Regulatory Innovation (CFTRI) programme, where they welcomed the next cohort of students.

Knowledge gained during the CFTRI programme helped AFSA staff draft the DASP framework which will commence on 1 January 2024. The framework aims to support innovation and fair competition as well as provide investors with significant benefits in terms of cheaper, faster and safer financial services and asset management.

Almas, Gauhar, Zarina, and Zhali have previously won the scholarships by the Asian Development Bank Institute to complete the CFTRI programme, a tutor-led online programme designed for senior policymakers and regulators at central banks, security agencies and ministries of finance.

Chief Executive Officer of AFSA Nurkhat Kushimov: “Achievements like these show that as a regulator AFSA makes a significant contribution to the development of young professionals who receive globally renowned scholarships and re-invest their knowledge in Kazakhstan.”

Dr. Dee Allen, the Head of the Capacity Building and Education Team at Cambridge Centre for Alternative Finance: “We at the Cambridge Centre for Alternative Finance are very proud of the achievements of staff from AFSA on the Cambridge FinTech and Regulatory Innovation programme. Through their capstone project, they have achieved a key objective of the programme which is to deliver a tangible outcome that can catalyse regulatory innovation. Thank you for joining us to welcome the new Cohort 12 participants of the CFTRI programme.”

Reference: 

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), which is 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.

Over 2,100 firms from 79 countries are registered in the AIFC. These firms provide banking, insurance, investment, professional and other services. The range of financial services offered at the AIFC is comparable to the list of services available in long-established financial centers of the world, such as London, Hong Kong, Singapore, Dubai and others. www.afsa.kz

The Astana International Financial Centre (AIFC) is an independent jurisdiction with a favourable legal and regulatory environment and a developed infrastructure for starting and doing business, attracting investment, creating jobs and developing Kazakhstan’s economy. https://aifc.kz/ 

Contact information:

Public Relations and Communications of AFSA:

+7 (717) 264 73 43; +7 7172 61-37-45 email: [email protected]

The International Organization of Securities Commissions (IOSCO) will celebrate its seventh annual World Investor Week (WIW), from 2 to 8 October 2023.

This year, the WIW campaign will focus on three main themes: Investor Resilience, Crypto Assets, and Sustainable Finance, which the IOSCO Board has identified as particularly relevant given current and expected global market conditions. Other themes cover Frauds and Scams Prevention, Basics of Investing, Technology and Digital Finance.

World Investor Week (WIW) is a week-long, global campaign promoted by IOSCO to raise awareness about the importance of investor education and protection and highlight the various initiatives of securities regulators in these two critical areas. In October, IOSCO securities regulators and other IOSCO members on six continents will provide a range of activities, such as launching investor-focused communications and services, promoting contests to increase awareness of investor education initiatives, organising workshops and conferences, and conducting local and national campaigns in their own jurisdictions.

This year IOSCO is going to hold an array of global events, including:

• WIW Global Webinar on Sustainable Finance in the context of Investor Education and Investor Protection. More details can be found here.
• Global Webinar on Investor Resilience. More details can be found via this link.
• World Financial Planning Day. More details are here.
• WIW Global Webinar on Crypto-Assets in the Context of Investor Education and Protection. More details can be found here.
• WIW Global Webinar on challenges for Investor Education and Investor Protection in the context of digitalisation. More details are via this link.

This year AFSA is going to hold a social media campaign to emphasise the importance of developing and maintaining healthy investor habits and behaviour that promote responsibility and accountability.

The Astana Financial Services Authority (AFSA) and the Kyrgyz Republic’s Service for Regulation and Supervision of the Financial Market under the Ministry of Economy and Commerce have signed a Memorandum of Understanding (MoU).

The MoU between the financial markets’ regulators will pave the way for future cross-border transactions in capital markets between AIFC and Kyrgyzstan, including IPOs, listing of securities, access of broker-dealers to stock exchanges of both jurisdictions and Islamic finance instruments. The MoU sets out a statement of intent between the two supervisory authorities to establish a framework for mutual assistance and to facilitate the exchange of information between them to ensure compliance with the laws and regulations of their respective jurisdictions. The document is expected to contribute to enhancing the integrity, efficiency and financial sustainability of professional participants by improving effective regulation and strengthening oversight of cross-border transactions.

AFSA Chief Executive Officer Nurkhat Kushimov said: “Clear regulations drive market predictability, which is one of the most important assets in finance. Cooperation like these assists better and faster financial exchange between AIFC and Kyrgyzstan and supports the interest of brokerage and asset management firms from both jurisdictions willing to pursue projects in capital market and investment funds industry.”

Chairman of the Kyrgyz Republic’s Service for Regulation and Supervision of the Financial Market under the Ministry of Economy and Commerce Marat Pirnazarov: “The issues of developing trade, economic and investment relations play a key role for us. We should create favorable conditions for our entrepreneurs to enhance cooperation in establishing business connections and building mutually beneficial cooperation, as well as in matters of cross-border activities in the financial market. I am confident that the establishment of close cooperation between regulators will provide a good opportunity to determine further prospects for bilateral cooperation.”

Reference: 

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), which is 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.

Over 2,100 firms from 79 countries are registered in the AIFC. These firms provide banking, insurance, investment, professional and other services. The range of financial services offered at the AIFC is comparable to the list of services available in long-established financial centers of the world, such as London, Hong Kong, Singapore, Dubai and others. www.afsa.kz

The Astana International Financial Centre (AIFC) is an independent jurisdiction with a favourable legal and regulatory environment and a developed infrastructure for starting and doing business, attracting investment, creating jobs and developing Kazakhstan’s economy. https://aifc.kz/  

Contact information:

Public Relations and Communications Division of AFSA:

+7 (717) 264 73 43; +7 7172 61-37-45 email: [email protected]

Every Thursday according to the schedule, AFSA Executive Body Members and the Registrar of Companies are going to welcome participants, and anyone interested in learning about AFSA or providing improvement advice on AFSA’s business processes.

From its very inception, AFSA has always strived to be a regulator that listens to the market needs and takes account of them. We are committed to ensuring that our regulatory services are client-centric and address the needs and concerns of its stakeholders in an efficient manner.

During the weekly Open Day sessions, our management will aim to provide a clear and comprehensive overview of its functions, responsibilities, and ongoing initiatives.

To book your appointment, please visit this link. It will take you to the AFSA website where you will need to complete a short form and submit your appointment.

If you have any questions regarding Open Day booking, please contact us by emailing to [email protected] or by calling the following number +7 (717) 261 37 80 during business hours.

The Astana Financial Services Authority (AFSA) has issued this Consultation Paper to seek suggestions from the market on the Policy paper and proposed AIFC Security Token Offering Framework (STO Framework). The Consultation Paper is available via this link 

https://orderly.myafsa.com/articles/consultation-paper-on-proposed-astana-international-financial-centre-security-token-offering-framework.

The proposals in this paper will be of interest to current and potential AIFC participants dealing with Security Tokens as well as the market and other stakeholders.
 
Development of the STO Framework was prompted by the need to introduce appropriate regulatory regime for Persons undertaking activities that involve or relate to Security Tokens.
 
AFSA has considered the international standard setting, particularly IOSCO, and the numerous jurisdictions’ regulatory approaches in relation to the Security Token.
 
The proposed amendments in this Consultation Paper contain the following proposals regarding the:
 
·      approach to bringing Security Tokens within AFSA regulation;
·      type of Licence needed to operate a facility for trading and/or clearing Security Tokens;
·      access to facilities for trading and clearing Security Tokens;
·      enhanced requirements for trading and clearing Security Tokens;
·      additional fees for Authorised Market Institutions admitting Retail Clients as Direct Access Members in respect of trading and/or clearing of Security Tokens.
 
We invite comments from interested stakeholders.
 
The deadline for providing comments on the proposed framework is 15 September 2023. Once we receive your comments, we shall consider if any refinements are required to this proposal.

AFSA prefers to receive comments by email at [email protected].

AFSA has issued the Consultation Paper on the proposed AIFC Stablecoin Framework (“Framework”) to seek suggestions from the market. The Consultation Paper is available via this link https://orderly.myafsa.com/articles/consultation-paper-on-the-proposed-aifc-stablecoin-framework.

The Framework comprises draft Rules applicable to Authorised Firms Providing Money Services in relation to Digital Assets and issuance of Fiat stablecoins.

The Consultation Paper consists of:
Part I – Background;
Part II – Proposals;
Part III – Public Consultation Questions;
Annex 1 – Draft Rules Applicable to Authorised Firms Providing Money Services in relation to Digital Assets and Issuance of Fiat Stablecoins.

During the public consultation, both existing and potential market participants are invited to comment on the questions outlined in Part III of the Consultation Paper.

The deadline for providing comments is 15 September 2023. Once we receive your comments, we shall consider if any refinements are required to this proposal.

AFSA prefers to receive comments by email at [email protected].