Astana Financial Services Authority (AFSA) and Financial and Capital Market Commission of Latvia (FCMC) signed a Memorandum of Understanding for cooperation in supervision of alternative investment fund managers (AIFM) under the EU’s AIFM directive.

This is the first MoU on alternative investment funds which was coordinated by the European Securities and Markets Authority after its approval of ASFA as a counterparty to the MoU. This MoU sets the framework conditions for AIFC fund managers to market and manage alternative investment funds, such as hedge funds, private equity and real estate funds to professional investors in Latvia, as well as for Latvia to manage or market alternative investment funds in the AIFC.

In view of growing globalization of the world’s financial markets and the increase in cross-border operations and activities of managers of alternative investment funds formalization of cooperation between AFSA and FCMC  will allow mutual assistance in the supervision of Managers of alternative investment funds, their delegates and depositaries that operate on a cross-border basis. Through the MoU, supervisory authorities  expressed their willingness to cooperate with each other in the interest of fulfilling their respective regulatory mandates, particularly in the areas of investor protection, fostering market and financial integrity, and maintaining confidence and financial stability.

In order to further guide and assist on AML/CFT matters the AFSA would like to bring the attention of the Participants of the Astana International Financial Centre to the following:

(1) List of financial and ancillary services for purposes of anti-money laundering and combatting the financing of terrorism
On 30 December 2020, Astana Financial Services Authority approved the revised the List of financial and ancillary services for purposes of anti-money laundering and combatting the financing of terrorism (AML/CFT) (List). The List includes the Regulated Activities, Market Activities, Ancillary Services and Designated Non-Financial Business and Profession (DNFBPs) indicated in the AIFC General Rules and AIFC Glossary.

The List was developed in accordance with the AML/CFT Law of Kazakhstan (subparagraph 19) of paragraph 1 of article 3) and AIFC AML Rules (Section 2.1 (b).

(2) Guidance on Customer Due Diligence
On 30 December 2020, AFSA approved the Guidance (Requirements) for the purposes of counteracting the legalisation (laundering) of proceeds from crime and the financing of terrorism, applicable to the Customer Due Diligence in cases when the Participants of the Astana International Financial Centre (the Relevant Persons) establish non-face to face business relations with customers in consultation with the Ministry of Finance of the Republic of Kazakhstan (the CDD Guidance).

The CDD Guidance covers the relevant requirements of Kazakhstan’s AML/CFT Law, AIFC AML Rules and the AML Guidance in relation to the programmes of risk assessment, customer identification and verification, and remote CDD measures which should be established in AML policies, controls and procedures of the Relevant Persons.

(3) Amended AML Guidance
On 30 December 2020, AFSA approved the amendments to the Guidance (Requirements) applicable to the Rules of Internal Control for the purposes of counteracting the legalisation (laundering) of proceeds from crime and the financing of terrorism for financial monitoring entities of the Astana International Financial Centre (the Relevant Persons) in consultation with the Ministry of Finance of the Republic of Kazakhstan (the AML Guidance).

The amendments to AML Guidance are developed in accordance with paragraph 3-2 of Article 11 of the AML/CFT Law of Kazakhstan and other amendments to the AML/CFT Law signed by the President of the Republic of Kazakhstan on 13 May 2020.

The amendments to AML Guidance include:

• Applicability to all relevant AIFC Participants
• Obligations on taking measures of freezing transactions with money and/or other property

Requirements on the classification of clients’ operations as complex, unusually large and other unusual taking into account the typologies, schemes and methods of money laundering/financing of terrorism (ML/FT).

• New requirements for ML/FT risk management
• Obligation to provide the results of ML/FT risks assessment upon request of FIU and AFSA
• Obligations to conduct CDD of the customers including the checks and screening through at least following Lists:
• List of persons involved in terrorist activity
• List of persons and organisations associated with the financing of terrorism and extremism,
• List of persons and organisations associated with the financing of proliferation of weapons of mass destruction
• New reference on the List of states with preferential taxation instead of List of offshore zones
• New reference on the List of signs of unusual and suspicious operations approved by FIU (the Government’s Decree No. 1484 was cancelled)
• New requirement regarding customer’s operations which are subject to study

Should you have any questions, please direct your queries to [email protected].

Nur-Sultan, Kazakhstan – Astana Financial Services Authority is pleased to present the key outcomes of its activities in 2020:

Registration:

• 287 new registered participants (overall, 650 companies from 49 countries are registered now in the AIFC);
• Registration process has been 100% digitalised as of September 2020 and registration procedures duration shortened from 7 days in 2018 to 1 day in 2020.

Regulations:

• 5 new financial services introduced in relation to various investment selling and buying platforms (total number of financial services in AIFC is 35).
• 3 new forms of captive insurance introduced.

Regulatory support to AIFC Participants:

• COVID-19 Regulatory relief measures were introduced, which allowed business community of AIFC to focus on their business priorities during difficulty times;
• Base capital requirements were optimized;
• Liquidity requirements for investment firms were optimized.

FinTech: 8 new firms accepted to the FinTech Lab (30 in total engaged in areas such as crowdfunding, money services, digital assets etc.). AFSA contributed to harmonization of AIFC and national regulations on digital assets.

International Relations: AFSA signed 2 multilateral agreements: IOSCO Enhanced Multilateral Memorandum of Understanding and International Association of Insurance Supervisors, increasing its global supervisory cooperation reach with a view to secure market integrity and financial stability.  

Communications:

• AFSA held a virtual World Investor Week for purposes of educating consumers of financial services. More than 3,000 delegates from 23 cities of Kazakhstan and 10 countries participated.
• 37 public outreach events were held to help guide AIFC Participants through registration and authorisation process, explain regulatory regime of AIFC and promote compliance.

Nur-Sultan, Kazakhstan – the Astana Financial Services Authority (AFSA) has become a signatory to the IOSCO Enhanced Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (EMMoU).

The decision came on margins of the Annual Meeting of IOSCO held virtually this year from 9 to 18 November 2020. In particular, the AFSA became signatory to Appendix A2 (ACF powers), which allows AFSA to perform cross-border enforcement cooperation in asset freezes to protect consumers, obtaining compelled testimony and exchange of audit papers.

The EMMoU is the global benchmark for international cooperation in the enforcement of securities and derivatives laws and regulations, which supplements the MMoU adopted in 2002. The first MMoU adopted in 2002 has created a global framework for international cross-border cooperation and exchange of information among securities regulators. However, in response to an increased sophistication of capital markets functioning and latest technological developments the IOSCO has adopted the Enhanced MMoU in 2016. Signatories of the EMMoU agree to provide each other with new forms of assistance in cross-border enforcement cooperation, such as obtaining asset freezes to protect consumers, obtaining compelled testimony, exchange of audit papers etc. More information about the EMMoU can be found here.

AFSA is the first regulator in the region of Central and Eastern Europe, Central Asia and Caucasia to become a signatory to the EMMoU. AFSA is committed to continue its work on enhancing best world’s practice and foster greater cross-border enforcement cooperation and assistance among securities regulators.

Mukhtar Bubeyev, Chief Executive Officer of the AFSA, said: “It is important for us to sign the IOSCO’s Enhanced MMoU because we are committed and open to cross-border enforcement cooperation. Capital markets operate in a globalised and interconnected environment and we are convinced that through international cooperation and enforcement of securities laws we can preserve market integrity and protect consumers of financial services».

Astana Financial Services Authority (AFSA) has signed a bilateral Memorandum of Understanding and Cooperation (MoU) agreement and an Alternative Investment Fund Managers Memorandum of Understanding (AIFMD MoU) with the Cyprus Securities and Exchange Commission (CySEC).  

The signing of the MoU will enhance cooperation between the two supervisory authorities, aiming specifically to facilitate the exchange of information and technical expertise. The agreement constitutes a framework for AFSA and the CySEC to conduct efficient and effective investigations into potential violations of the legislation governing the securities market. The two Authorities will work closely together to uphold the integrity of their respective markets, safeguard the interests of investors and foster the robust development of their respective securities market.

The signing of the AIFMD MoU will enhance cooperation and cross-border supervision of Alternative Investment Fund Managers. Fund managers based outside the EU are allowed to access EU markets or perform fund management through delegation from managers of the EU.

Nur-Sultan, Kazakhstan – AIFC is organising Virtual World Investor Week from 5 to 9 October 2020.

The purpose of the event is to raise awareness about financial services consumers’ rights and about basic principles of investing. Organizer is Astana Financial Services Authority (AFSA) at the Astana International Financial Center (AIFC). The co-organizers are the AIFC Authority, Astana International Exchange, Bureau for Continuing Professional Development and FinTech Hub.

World Investor Week is held annually by regulators in 80 countries all over the world under the auspices of the International Organization of Securities Commissions (IOSCO). IOSCO is an international organisation that unites world’s securities regulators. IOSCO members regulate more than 95% of the world’s securities market in more than 115 jurisdictions. Hosting of the World Investors Week reflects AIFC’s adherence to the IOSCO standards on consumer protection in financial services.

In 2018-2019 World Investor Week under the auspices of the IOSCO was organised offline, and more than 5,000 participants from 7 cities of Kazakhstan attended the event: Nur-Sultan, Almaty, Aktau, Aktobe, Karaganda, Petropavlovsk, Turkestan.

This year’s events under the World Investor Week will be held in the format of online presentations and online information sessions. Anyone willing to attend these events can register. The speakers of the event are experts from AIFC, as well as domestic and foreign experts in the field of stock market, consumer and investor protection, financial technology, green and Islamic finance, financial instruments of the securities market, as well as continuing professional development.

More details on the event, agenda and the registration link are available here.

Nur-Sultan, Kazakhstan – Mr. Mukhtar Bubeyev is appointed as the Chief Executive Officer of the Astana Financial Services Authority (AFSA) from 1 October 2020 by the decision of the Board of Directors of the AFSA.

Mr. Bubeyev is a qualified professional in banking supervision and financial services sector. Previously he was heading banking supervision at the Financial Markets Supervision Agency of Kazakhstan and National Bank of Kazakhstan. He also served as a board member of Kazakhstan’s central bank responsible for monetary policy.

Mukhtar joined AFSA as a Chief Policy Officer in January 2017. From 2018 he also served as an Acting CEO of AFSA. He has played an important role in establishment of the Astana International Financial Centre (AIFC) by development of regulatory and legislative framework of 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 authorization, registration, recognition and supervision of financial firms and market institutions in the AIFC.
www.afsa.kz

The Astana International Financial Centre (AIFC) was created by the initiative of the First President of the Republic of Kazakhstan, Leader of the Nation, Nur-Sultan Nazarbayev as part of the “100 steps to implement five institutional reforms” national program. 
The Centre’s development strategy until 2025 was approved by the Management council of the AIFC during the council’s meeting on July 2, 2020.
In accordance with the strategy, the vision of AIFC is in becoming the leading financial centre in the region that includes Central Asia, the Caucasus, EAEU countries, western China, Mongolia, and Eastern Europe.
The mission of the AIFC is in assisting the sustainable and long term development of the region. As the head of state Tokayev noted, “AIFC, with its unique opportunities, can act as a universal platform that connects the countries in the region.”
The strategic directions for the sustainable development of the AIFC include the development of a circular economy, financial technologies, and “digital financial centre.”
www.aifc.kz

Contact information:

Astana Financial Services Authority (AFSA)
Dinara Serikova
[email protected]
+7 701 35 905 70

Nur-Sultan, Kazakhstan – Astana Financial Services Authority has become the 75th member of the International Association of Insurance Supervisors (IAIS) Multilateral Memorandum of Understanding (MMoU).

Adopted on 15 February 2007, the IAIS MMoU provides a global framework of compliance and confidentiality to allow for open cooperation and exchange between insurance supervisors. With 75 signatories, the IAIS MMoU signatories represent approximately 76 per cent of worldwide premium volume.

“We are delighted to welcome Astana Financial Services Authority as a signatory to the MMoU,” said Dr Vicky Saporta, IAIS Executive Committee Chair. “In order to achieve our goal of policyholder protection within the global insurance marketplace, an insurance supervisor must be able to cooperate quickly and effectively. The MMoU is an essential regulatory tool – not only in crises but on a day-to-day basis – for supervisors to foster safer and more stable insurance markets”.

“I am pleased that the Astana Financial Services Authority (AFSA) has become a signatory to the IAIS MMoU,” stated Mukhtar Bubeyev, Acting Chief Executive Officer of AFSA. “This agreement strengthens our ability to work cooperatively with other regulators on cross-border supervision of insurers – cooperation that is critically important to promoting effective supervision and protecting consumers of the Astana International Financial Centre.” 

“The 75th signatory marks an important milestone,” commented Jonathan Dixon, Secretary General of the IAIS. “Supervisory cooperation is a necessary precondition for effective cross-border supervision. Thus, the more signatories we have, the more value it provides for IAIS members overall.”

To become a counterpart to the MMoU, applicants undergo a rigorous assessment of their professional secrecy regimes. The MMoU benefits its signatories in that each may rely on the other’s compliance with the strict confidentiality regime. Exchange of confidential information is being executed under appropriate provisions and procedures to protect the confidentiality of all counterparties.  

A complete list of international signatories and a copy of the MMoU can be found here.