Посты с тэгом: AFSA

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

As expressed in  the Supervisory Policy Statement on Branch Supervision, supervisory approach applied towards AIFC participants (whether it is a bank, an insurer, or an investment firm) operating as branches in the AIFC implies that the following  general factors should be considered:

• whether the whole firm (including Head Office) meets the minimum threshold conditions[1];
• whether the home jurisdiction’s prudential supervision regime is sufficiently equivalent to the AIFC regime; and
• whether there is sufficient supervisory cooperation between the AFSA and the home state supervisor.

In case if these minimum expectations are met, the branch could be considered as capable of being effectively supervised as a branch and AFSA may rely on home jurisdiction’s prudential regime for supervision.

Should the minimum expectations be met partially, the overseas firm may operate in the AIFC as a branch with additional requirements, such as a need to apply specific regulatory requirements at a branch level, additional branch liquidity requirements, restrictions on business activity and others.

When the minimum expectations cannot be met to a significant extent, the branch should be required to operate as a subsidiary, and the AFSA will supervise it on a standalone basis.

AFSA may also follow the approach of this Statement in making decisions on recognition of overseas brokers (Recognised Non-AIFC Members), exchanges (Recognised Non-AIFC Market Institutions), Equivalent Recognised Exchanges (for issuer prospectus purposes), Foreign Fund Managers (for managing Domestic Funds domiciled in the AIFC), and any other entity for which AIFC rules require some form of recognition.

The Supervisory Policy Statement reflects AFSA’s expectations in relation to supervision of branches in order to ensure the safety and soundness of authorised firms particularly by seeking to avoid adverse effects on the stability of the financial system of the AIFC.

The Supervisory Policy Statement entered into force on 12 December 2021.

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 62 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

[1] For a branch, the threshold conditions – which are the minimum conditions for authorisation – apply to the international firm as a whole and not just the AIFC branch, since a branch office is not a separate legal entity in its own right but an extension of a firm incorporated outside of the AIFC. In broad terms, the AFSA requires firms to have an appropriate amount and quality of liquidity, to have appropriate resources to monitor, measure, and manage the risks to which it is or may be exposed, to be fit and proper, to conduct their business prudently and to be capable of being effectively supervised by the AFSA (https://authority.aifc.kz/files/legals/425/file/supervisory-policy-statement-on-afsas-approach-to-branch-supervision.pdf)

Nur-Sultan, Kazakhstan – The Astana Financial Services Authority (AFSA) informs that the following companies may have released information in the public domain that risk misleading persons into believing that these persons are authorised by the AFSA to advice on or manage investments:

• Hitbeat Music Representative Office;
• Extrum Limited;
• KBI Partners Limited;
• S-Capital Limited

The four firms mentioned above are registered in the AIFC but are NOT AUTHORISED BY AFSA TO CONDUCT REGULATED ACTIVITIES[1] of offering financial services to consumers.

AFSA has advised the companies to correct the public record in any public resources of these Companies, including their websites and in other publicised resources. As this information was released in the public domain, AFSA considers it appropriate to set the public record straight to protect the interests of the Astana International Financial Centre (“AIFC”) community and members of the public.

Consumer enquiries in relation to any of the four companies may be directed to https://afsa.aifc.kz/submit-your-complaint/ or by email to [email protected].  

AFSA advises consumers to only deal with AIFC companies in Kazakhstan that are appropriately authorised to provide financial services and therefore properly regulated. The jurisdiction of the AIFC is attractive for doing business, therefore consumers are advised to check the status of authorisation on AFSA’s website at https://publicreg.myafsa.com/authorised/, and avoid dealing with firms not permitted by AFSA to carry out the activities they market.

AFSA requests consumers to exercise caution when dealing with firms claiming links with the AIFC who are soliciting investments in Cryptocurrencies and other investments without holding the relevant licence or authorisation from AFSA. The message from AFSA is for consumers to be careful, and only invest with authorised firms that are appropriately regulated by the AFSA.  It is important to note that the AIFC Participant status does not allow offering financial services without obtaining a licence for carrying on regulated financial activities from the AFSA. It is also critical that consumers distinguish between an entity registered/incorporated within the AIFC from an entity that is authorised to carry on regulated activities or other permitted activities.

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 62 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

[1] A list or Regulated Activities is in Schedule 1 of the AIFC General Rules 2017 https://afsa.orderly.kz/articles/schedule-1:-regulated-activities

AFSA is happy to invite potential applicants, law and consultancy firms and AIFC participants to the webinar on the new amendments to the AIFC Legal Entities Framework and online post-registration process. The webinar will be held online (via Zoom) on 28 January 2022 at 15:00-16:00 hrs Nur-Sultan time. Language of webinar is English.

Interested participants shall register via the following link.

Agenda:

15.00 – 15.10

I. Introduction

Laura Nurgaliyeva, Supervisor, Registration Division, AFSA

15:10 – 15:25

II. Introduction of the new amendments to the AIFC Legal Entities Framework

 Laura Nurgaliyeva, Supervisor, Registration Division, AFSA

– Extending Powers of Board of Directors

– Clarity of “allotment” and “issue” concepts

– Standard constitutional documents

– New audit requirements for Private Companies, LLPs and NPIOs

– Status of Director of a Company

– Registration fees

15:25 – 15:30

III. Q&A session

15.30 – 15.45

IV. Online post-registration process 

Anara Omarova, Senior Associate, Registration Division, AFSA

– Automated post-registration processes

15:45 – 15:55

V. Q&A session

AFSA has made amendments to the AIFC Anti-Money Laundering, Counter-Terrorist Financing and Sanctions Rules (the Rules) to increase adherence of the AIFC AML/CFT framework to Recommendations of the Financial Action Task Force (FATF).

The amendments to the Rules cover the following areas:

Regulatory and supervisory powers.  Regulatory and supervisory powers of the AFSA in respect of Designated Non-Financial Business and Professions (DNFBPs) are more clearly defined.  The AFSA ensures compliance of the relevant AIFC Participants with this regime that addresses requirements regarding Anti-Money Laundering, Counter-Terrorist Financing, and the proliferation of weapons of mass destruction. (AML/CFT) responsibilities by using its various regulatory powers including by conducting reviews and inspections.  It is also clarified that the AFSA may impose disciplinary sanctions and other actions if AML Rules are contravened.

Risk-based approach.  The proposed amendments considerably expand the responsibility of Relevant Persons in a risk-proportionate manner. Thus, Relevant Persons will be responsible for managing and mitigating country-wide risks identified in the published reports and guidance given by the financial intelligence unit regarding the FATF mutual evaluations and follow-up reports and implementing enhanced measures where higher risks are identified. It is also proposed to explicitly require firms to manage and mitigate risks they identify during their risk assessment

Customer due diligence (CDD).  The proposed amendments specifically underline the need to conduct CDD for occasional transactions the value of which singularly or in several linked operations (whether at the time or later), equal or exceed $15,000.  In addition to conducting CDD it is required to conduct Enhanced Due Diligence when there are business relationships and transactions with persons from countries with high geographical risk factors.

Obligations to verify the identity of the customer and its Beneficial Owner (BO) have been explicitly stressed.

Politically Exposed Person (PEP).  Relevant Persons are obliged to obtain an approval from their senior management to continue its business relationship with an existing customer if the customer or its BO becomes a PEP.  For these purposes a new guidance is introduced explaining who is to be considered as senior management under the AML Rules.

Reliance and outsourcing.  The responsibility of Relevant Persons for reliance’ compliance was expanded.  It was specified that Relevant Persons must ensure that the third party has an existing business relationship with the customer and that relationship is independent from the relationship to be formed by the customer with the Relevant Person.

To make the reliance coherent with the FATF Recommendations the set of documents and data that Relevant Persons should obtain from the third party was extended.  Client and BO identification and verification documents, as well as the information on the nature and purpose of the business relationship have been included.

As to reliance on a Group member, the Group’s AML policies must adequately mitigate any high geographical risk factors.

Wire Transfers.  The Wire Transfer Chapter has been extensively amended by introducing two thresholds (below and above $1,000) for cross-border and domestic transactions and defining obligations of Authorised Persons when executing wire transfers which are above or below the introduced thresholds. 

Thus, Authorised Persons must ensure that cross-border and domestic wire transfers contain specific details of the payer and payee (such as identification documents, individual identification numbers, addresses, etc), i.e., the information that allows traceability of the transaction.

There are also provisions introduced regulating operations of money or value transfer services (MVTS) operators.  Giving that under the AIFC Law only legal entities can obtain license allowing provision of money or value transfer services it is clearly stipulated that natural persons cannot be persons carrying out MVTS.

Sanctions.  It is explicitly stated that Relevant Persons must comply with prohibitions from conducting transactions with designated persons and entities in accordance with the obligations set out in the relevant resolutions of the United Nations Security Council and Republic of Kazakhstan.

It is also stressed that Relevant Persons should be able to independently apply countermeasures that are effective, appropriate and proportionate to the risks whether or not they are called upon to do so.

MLRO and suspicious transactions.  Obligations for Relevant Persons to register with the Financial Intelligence Unit of the Republic of Kazakhstan (FIU) for submitting Suspicious Transactions Report (STRs) and Threshold Transactions Reports (TTRs) before commencement of the business relationships are introduced.  When a STR is submitted, the AFSA must be notified of such a submission.

The time for submission of the annual AML Return form has been changed.  A Relevant Person must complete and submit the form within 2 months after the end of each year instead of 4 months period.

In respect of STR filing it was also clearly stated that Relevant Persons must not disclose information contained in a STR or the fact that a STR may be or has been filed with the FIU or a suspicious transaction is being investigated.

Group policies.  Relevant Persons have a new requirement on the policies and procedures content and information sharing between Group entities.

A Relevant Person which is part of a Group must ensure that its branches and majority-owned subsidiaries in host countries implement the requirements of the AIFC, to the extent that host country laws and regulations permit. If the host country does not permit the proper implementation of the measures above, financial groups should apply appropriate additional measures to manage the money laundering risks and inform the AFSA of such measures.

Protection for disclosure.  In respect of the protection of the persons who file STRs it is clearly stated now that those who file STRs are not subject to any civil liability or criminal prosecution under the Kazakhstan law resulting from the submission of the STR.