The delegation of the Astana International Financial Centre (AIFC), headed by acting IsDB Governor for Kazakhstan and Chief Executive Officer of the Astana Financial Services Authority (AFSA) Nurkhat Kushimov, has participated in the Islamic Development Bank Group 2022 Annual Meetings in Sharm el-Sheikh. The event was organised with the assistance of the government of the Arab Republic of Egypt.

Heads and representatives of government agencies from 57 IsDB member countries as well as regional and international financial and development institutions, business leaders and the general public participated in the annual event.

IsDB Group Board Meetings, conventions of IsDB Group members, as well as side-events and panel sessions were held within the Annual Meetings. Among many others, issues of sustainable development, Islamic finance, and digitalisation were on the agenda. Acting IsDB Governor for Kazakhstan Mr Kushimov spoke at a special event “Digital Transformation in Financial Services: The Age of Fintech” and focused on the development of FinTech in the AIFC, as well as the proper regulation and supervision of AFSA companies in the area of FinTech.

“From the standpoint of regulation, digital transformation presents a number of challenges, notably the need to prepare innovative legislation and prioritise consumer protection. Nevertheless, we see FinTech as an enabling power that can build bridges between those in business who are financially secure and those who are “unbanked”. In FinTech at AFSA we strive to motivate innovation whilst ensuring that adequate regulation and oversight are in place to bring out the best that FinTech can offer in a safe manner,” said AFSA Chief Executive Officer Mr Kushimov.

During the visit meetings were held with the leadership of the Islamic Development Bank and with companies of the IsDB Group (ICD, ITFC, ICIEC). The discussions focused on issues of strengthening cooperation between the IsDB Group and the Republic of Kazakhstan, the possibility of financing Kazakhstan’s projects, as well as IsDB’s assistance in the development of the industry of Islamic financial services.

In addition, meetings were held with representatives of various banks and companies, including the CEO of the OPEC Fund, the Secretary General of the Islamic Financial Services Board and representatives of other organisations.

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 1,300 firms from 64 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 that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz

The Islamic Development Bank (IsDB) is an AAA-rated supranational and international development finance institution with 57 member countries that promote socio-economic and sustainable development in IsDB member countries. Its main activities include promoting global development, building partnerships, strengthening global value chains, and advancing science, technology and innovation. 

The Astana Financial Services Authority (AFSA) has suspended the Licence of Sanity Capital Ltd after the firm had breached regulatory requirements in relation to the AFSA’s capital and liquidity requirements. Sanity Capital Ltd also failed to ensure that all mandatory appointments were filled at all times by Approved Individuals or Designated Individuals as required by the AFSA.

Despite Sanity Capital Ltd previously being ordered to resolve the above matters in a timely manner, it has not done so, so AFSA had to take measures.

The AFSA requires companies to comply with the minimum requirements set by the regulator and will not hesitate to take appropriate action against participants who persist in ignoring the regulator’s requirements and failing to present credible plans to meet them.

Deputy CEO of the AFSA Mr Gareth Ling said: “No clients of Sanity Capital Ltd suffered any detriment or were exposed to any undue risks, but this does not mean the AFSA’s minimum requirements to be a “fit and proper” person should be taken any less seriously by firms wishing to remain authorised to provide financial services in or from the AIFC”.

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 1,300 firms from 64 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 that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz

The Astana Financial Services Authority has held the 2nd Regulatory Townhall in Nur-Sultan in an online format.

A number of topics were on the agenda of the Townhall. Among them are:

• The enhancements to the Recognition and Market Frameworks;
• Policy proposals regarding Banking Business Firms;
• Summary of Regulatory Guidance on Fitness and Propriety;
• Application of Rules on Currency Regulation and
• Proposed Guidance on the use of Security Token Offerings (STO) at the AFSA FinTech Lab.

On 1 May 2022 the AFSA introduced fees for participants for supervision, late filings and for when firms change key individuals. These changes are stipulated in the AIFC Fees Rules and are introduced following a four-year grace period in order to allow firms in the AIFC to properly commence their operations. The relating Consultation paper was published on the AFSA website for public consultation and the last date for comments was 29 April 2022.  

The fees will apply to several categories of participants, namely firms that carry on regulated activities, that is those involving the provision of financial services; financial institutions; ancillary service providers; and FinTech companies. Amounts of fees are accessible in the AIFC Fees Rules via this link (AIFC Fees Rules).

Supervision fees are a common market practice in many international jurisdictions, including Dubai, Abu-Dhabi, Qatar, Singapore, Hong Kong, London and other global financial centres.  AFSA benchmarked the supervision fees to those charged in its peer international financial centres, while balancing the need to foster growth and financial stability in the AIFC. 

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 1,300 firms from 63 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 that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz

Contact information:

Dina Teltayeva

+7 701 765 40 10

[email protected]

The Astana Financial Services Authority (AFSA) has issued the Consultation Paper № AFSA-P-CE-2022-0002 to seek suggestions on the proposed Regulatory Guidance on Fitness and Propriety. According to the proposed guidance, the fitness and propriety assessment will apply to Authorised Persons (including applicants and FinTech Lab participants), Ancillary Service Providers, Approved Individuals, where applicable in accordance with the AIFC Rules and Regulations. The proposed guidance is developed to bring in more clarity on the AFSA’s approach to Fitness and Propriety standards.

This year the Eurasian group on combating money laundering and financing of terrorism (EAG) will conduct the second round of the Mutual Evaluation of technical compliance of the legislation of the Republic of Kazakhstan, against international standards of combating money laundering and terrorist financing. Furthermore, according to the Financial Action Task Force’s (FATF) recommendations, supervising authorities should demonstrate measures taken to prevent criminals from holding a significant controlling interest or a management function in firms.

Full content of the consultation paper may be found via this link https://aifc.kz/files/legals/450/file/cp-on-proposed-regulatory-guidance-on-fitness-and-propriety.pdf.

All comments should be in writing and sent to the address indicated below or by email:

Policy and Strategy Division

Astana Financial Services Authority (AFSA)

55/17 Mangilik El, building C3.2, Kazakhstan

Email: [email protected]

The deadline for providing comments is 14 May 2022

When sending your comments, please indicate in a subject line: “Consultation Paper # AFSA-P-CE-2022-0002”. You may, if relevant, identify the organisation you represent when providing your comments. The AFSA reserves the right to publish, including on its website, any comments you provide, unless you expressly request otherwise. Comments supported by reasoning and evidence will be given more weight by the AFSA.

In December 2021 a first case of voluntary winding-up of a Private Company under the acts of Astana International Financial Centre was successfully completed. This was a pilot project implemented by the AIFC Office of the Registrar of Companies and RSP International LLP acting as the Kazakhstani legal counsel to Private Company in connection with all aspects of its voluntary liquidation.

This article  will outline the basic procedural steps required for the voluntary winding-up of a Private Company under applicable AIFC legislation. These notes are not exhaustive and do not constitute legal advice.

Voluntary winding-up under AIFC law is an  independent liquidation of a Company approved by a simple majority of its members (shareholders). Such a decision is made  as soon as the Board of Directors of the Company decides that the Company has no reason to continue its operations. Voluntary liquidation can only be carried out if the Company is solvent, i.e. the assets of the Company must be sufficient to pay all debts in full, together with interest at the statutory rate, within a period not exceeding 12 months from the commencement of liquidation.

In the case of voluntary winding-up, the Company must cease to operate from the commencement of the winding-up proceedings, unless the carrying on of the business may be required for its liquidation. However, the corporate legal personality and corporate powers of the Company shall continue until liquidation.

As part of the preliminary stages of voluntary liquidation, the directors of the Company must make a formal Declaration of Solvency, which is approved by a simple majority of the board of directors.

The Declaration of Solvency must be made within 5 weeks immediately before the date of the liquidation resolution, or on the same day but before the resolution is approved.

In case of voluntary winding-up of the Company one or more liquidators must be appointed at a general meeting of members for the purpose of liquidating the Company and distributing its assets. The Liquidator appointed for the voluntary winding-up of the Company must be registered with the AIFC Register of Insolvency Practitioners and Official Liquidators.

From the appointment of the Liquidator for the Company, all the powers of directors shall cease unless their continuation is approved by the Company in its general meeting or the Liquidator.

During the period of voluntary winding up of the company, the directors must:

− provide information on the operations of the company to the Liquidator and attend meetings when reasonably necessary;

− keep track of the company’s assets and hand them over to the Liquidator together with all books, records, bank statements, insurance policies and other documents relating to the company’s assets and liabilities.

All tax requirements under the Company’s voluntary liquidation procedure are fulfilled in accordance with the tax legislation of the Republic of Kazakhstan, as the tax regime in the territory of the Astana International Financial Centre is determined by the Tax Code of the Republic of Kazakhstan, except for certain exemptions.

The liquidation of the Company is considered completed when the company is dissolved after the final general meeting of the members conducted by the Liquidator. The voluntary liquidation procedure for a Private Company can last from 4 to 6 months. Once the liquidation process has been successfully completed, the legal entity ceases to exist.

If during the voluntary liquidation procedure it transpires that the Company is not solvent, the Liquidator shall convene a meeting of creditors and the liquidation shall become a voluntary liquidation of the creditors.

Accounting Records of Companies

Pursuant to AIFC acts, if a Company ceases to exist the directors immediately shall ensure that its Accounting Records are preserved for at least 6 years from the date of cessation in compliance with international standards of transparency.

This article has been written by RSP International LLP, a  legal and consulting services provider which implemented the first ever voluntary liquidation project for a Private Company in Astana International Financial Centre in December 2021.

Contact Information:
Republic of Kazakhstan, Almaty, 050051, micro district Samal-2, h. 33A, 2nd block, 21st floor
Tel.: +7 (727) 259 91 66
Fax: +7 (727) 259 91 64
eMail: [email protected]
Web: www.rsp-i.com

The Astana Financial Services Authority (AFSA) has issued the Consultation Paper #AFSA-P-CE-2022-0001 to seek suggestions from the market on the proposed amendments to AIFC Fees Rules.

Introduction of fees for supervision, modifications and key individuals stipulated under AIFC Fees Rules was followed by a 4-year grace period in order to allow firms in the AIFC to properly commence their operations.  

Amendments to the AIFC Fees Rules include the following:

(a)       annual supervision fees;

(b)      application fee for Approval of Individuals;

(c)       application fees for modification of a Licence or Approved Individual’s registration;

(d)      FinTech Lab fees;

(e)      revised fee for authorisation of Digital Asset Trading Facility Operator activity;

(f)       revisions to administrative services fees by the Office of the Registrar of Companies;

(g)      recognition fee for Foreign Fund Managers;

(h)      application fees to register a Non-Exempt Fund and Exempt Fund or provide notification for an Exempt Fund;

(i)       late fees payable to the AFSA.

Full content of the consultation paper may be found via this link https://afsa.orderly.kz/articles/consultation-paper-on-proposed-amendments-to-aifc-fees-rules.

All comments should be in writing and sent to the address indicated below or by email:

Policy and Strategy Division

Astana Financial Services Authority (AFSA)

55/17 Mangilik El, building C3.2, Kazakhstan

Email: [email protected]

The deadline for providing comments is 29 April 2022

When sending your comments, please indicate in a subject line: “Consultation Paper #AFSA-P-CE-2022-0001”. You may, if relevant, identify the organisation you represent when providing your comments. The AFSA reserves the right to publish, including on its website, any comments you provide, unless you expressly request otherwise. Comments supported by reasoning and evidence will be given more weight by the AFSA.

Upon the decision of the Board of Directors of the Astana Financial Services Authority (AFSA), Nurkhat Kushimov was appointed as the Chief Executive Officer of AFSA from 18 March 2022.

Bubeev, who previously held this post, was elected a member of the Board of Directors of AFSA.

As Governor of the Astana International Financial Center Kairat Kelimbetov noted, “Nurkhat Kushimov has extensive experience in senior positions in the area of financial market regulation. At AFSA, he successfully oversaw the issues of legal support, company registration and development of financial technologies. He is very conversant with the latest trends in the development of new financial services, which determine how the financial markets will develop. I am confident that in a new capacity his knowledge and experience will help strike the necessary balance in supporting the innovative development of the AIFC financial markets and proper regulation.”

A Bolashak graduate, Nurkhat Kushimov holds a Master of Law degree from the University of Cambridge and has about 20 years of experience in the legal and financial area. Over the years, he has held various leadership positions in the civil service. He started his career at the AIFC in 2018 at the AIFC stock exchange (AIX), where he oversaw matters relating to the regulation of issuers, preparation and execution of IPOs of Kazakhstan’s and international companies. From 2019 until his current appointment, he was the Registrar of Companies, as well as a member of the AFSA Executive Board responsible for developing the main directions of a policy for financial technology regulation.

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 1,200 firms from 63 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 that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz

23 companies received a licence from the Astana Financial Services Authority (AFSA) in 2021 to carry out financial activities, which is twice as many as in the previous year. Firms under AFSA’s supervision help create jobs in the banking, investment and insurance sectors of Kazakhstan. Overall, since AIFC’s inception 46 companies that prefer to do business through the Astana International Financial Centre have received a license to carry out financial activities. Their assets have totaled USD 1 bln.

“The increase in the number of firms choosing the jurisdiction of the Astana International Financial Center indicates growing confidence in the AIFC as an international business hub and shows the expansion of its activities. For example, in 2021 there was a significant increase in interest in the asset management and investment fund industry in the AIFC,” said Mukhtar Bubeyev, Chief Executive Officer of the Astana Financial Services Authority.

In total, 550 new AIFC participants were registered in 2021. The top five international jurisdictions with the biggest presence in the AIFC are China (9.4%), the European Union (5.6%), Russia (5.5%), the United Kingdom (3%) and the United States (2.5%). 75% of new firms that received a licence in 2021 to provide financial services showed an interest in the investment business (asset management, investment funds, brokerage services etc.).

The AIFC acts adopted in 2021 will give a significant impetus to the further development of the AIFC financial system. Thus, together with national regulators, the Currency Regulation Rules were adopted, which for the first time determined the terms of access of AIFC participants to the financial market of Kazakhstan.  The Substantial Presence Rules for AIFC participants applying tax exemptions for the payment of corporate income tax and value added tax were the result of work on further bringing  standards of transparency for tax purposes in AIFC in line with the best world practices.

In terms of international relations, AFSA has strengthened cooperation with regulators in Europe and Asia, and following the Meeting with Central Asian Regulators, the regulators of the AIFC, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan adopted a Joint Declaration. Through the Declaration, the participants of the Meeting confirmed the possibility of using the potential of the AIFC for the joint development of the financial system, as well as agreed to create a Group of Central Asian Regulators and hold its meetings annually at the AIFC premises.

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 1,200 firms from 63 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 that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz