AFSA has developed the AIFC Security Token Offering Framework (the “STO framework”) to introduce a comprehensive regulatory regime that governs the issuance and trading of Security Tokens within the Astana International Financial Centre (AIFC). This further secures AFSA’s position at the frontier of the industry as it is one of the first regulators in the world to have adopted such a framework.
The STO framework aims to provide clarity, legal certainty, and investor protection in the field of Security Token offerings, fostering a secure and well-regulated environment for businesses and investors.
The STO framework is a natural follow-up product resulting from AFSA’s FinTech Lab experience where firms test their innovative ideas, including those involving security tokens.
Additionally, this framework seeks to align with international best practices and standards, enhancing the AIFC's credibility as a global financial hub and promoting innovation in the digital space while mitigating associated risks.
The STOs market is fast developing and presents profound opportunities. The global listed trading volume of security tokens is expected to grow to $162.7 tn by 2030, with a total security token issuance worth more than $4 tn in the same period.[1]
AFSA Managing Director and Chief Legal Officer Ishaq Burney: “AFSA’s framework offers options to issuers and investors to issue and trade regulated distributed ledger technology securities, in accordance with international regulatory standards. STOs create opportunities for increased liquidity and efficient pricing, harnessing blockchain technology to enhance transparency, real time access to trading information.”
AFSA Managing Director and Chief FinTech Officer Yerkegali Yedenbayev: “Since STOs are based on blockchain technology, they help make transactions faster and reduce administrative costs, making it a cost-effective way to raise capital for Kazakhstan's businesses, which have traditionally faced challenges in raising capital. For example, a few years ago within the regulatory sandbox one of AIFC’s security token exchanges successfully raised €6.75 million in just 9 seconds. Clearly, a well-regulated environment for new finance technologies such as STOs and others presents enormous potential for investors and businesses.”
The STO framework has been developed by introducing the following amendments to the AIFC Financial Services Framework Regulations, AIFC Market Rules, AIFC Authorised Market Institution Rules, AIFC Conduct of Business Rules, AIFC Collective Investment Scheme Rules and AIFC Glossary are published on the AIFC website and will come into force on 1 January 2024.
Reference:
Security Token is a digital representation of a Security or Unit, that is issued, transferred and stored using Distributed Ledger Technology or other similar technology approved by AFSA.
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 2,300 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]
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