Посты с тэгом: AFSA

On May 21, 2020, AFSA approved the Guidance (Requirements) applicable to the Rules of Internal Control for the AML/CFT purposes. It is designed for the relevant AIFC Participants supervised by AFSA in consultation with the Ministry of Finance of the Republic of Kazakhstan (the “Guidance”).

This Guidance is developed in accordance with:

• paragraph 3-2 of Article 11 of the Law of the Republic of Kazakhstan “On counteracting the legalisation (laundering) of proceeds from crime and the financing of terrorism” (AML/CFT Law);
• section 4.3.1 of the AIFC Anti-Money Laundering, Counter-Terrorist Financing and Sanctions Rules (AML Rules) and;
• paragraph 4 of the Joint Order of the Governor of the Astana International Financial Centre (dated 11 July 2018 No.65) and the Ministry of Finance of the Republic of Kazakhstan (dated 19 July 2018 No.678) “On Concerning some issues related to counteracting legalisation (laundering) of proceeds obtained through criminal means and financing of terrorism”.

The Guidance sets out requirements in relation to the programmes of risk management, customer identification, transaction monitoring and studying, employees training and awareness which should be established in AML policies, controls and procedures of the Relevant Persons.

The Guidance expands and disclose the scope of regulations of the AML/CFT legislation of Kazakhstan which include:

• establishing and maintaining of the AML policies, controls and procedures;
• identification of Money Laundering/Financing of Terrorism risks and managing the risks identified including business and customer risks;
• monitoring and assessment of customers transactions and activities including Politically Exposed Persons and Ultimate Beneficial Owner;
• producers of the Customer Due Diligence, Enhanced Due Diligence and Simplified Due Diligence;
• obtaining the relevant AML training for employees.

(Link to Guidance)

Astana Financial Services Authority (AFSA) and Bulgarian Financial Supervision Commission (FSC) have signed the Memorandum on cooperation in financial markets supervision.

The parties will exchange supervisory information and expand cooperation in the field of capital markets and insurance supervision. This will enable framework conditions for the development of the financial services between two jurisdictions. The regulators have agreed to supervise the operations of cross-border branches, representative offices and subsidiaries of financial enterprises in their respective jurisdictions.

This will ensure that head offices and head financial enterprises exercise adequate and effective control over the activities of their cross-border branches and subsidiaries. According to the signed document, AFSA and FSC will also help each other in ensuring continuous supervision of cross-border organizations on a consolidated basis.

Mukhtar Bubeyev, acting CEO of AFSA, stated: “The signed document is another important step towards expanding cooperation between our institutions. It will contribute to the development of the financial markets in both countries by improving the mechanisms for the exchange of information and regulatory experience.”

Boyko Atanasov, Chairman of the FSC, noted: “The goal set by both parties signing the Memorandum, is to establish a procedure for cooperation between the two institutions in the regulation and exercise of control over cross-border entities in the capital markets and the insurance sector. The Financial Supervision Commission pursues a policy of international partnership and cooperation in order to share good practices and exchange information. I do believe that the signed Memorandum of Understanding with the Financial Services Authority of the Astana International Financial Centre will be a prerequisite for creating the conditions for better supervision of the relevant markets and for end users’ security.”

Astana Financial Services Authority (AFSA), National Bank of the Republic of Kazakhstan (NBK) and Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan (ARDFM) have signed the tripartite Agreement on cooperation. Astana Financial Services Authority (AFSA), National Bank of the Republic of Kazakhstan (NBK) and Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan (ARDFM) have signed the tripartite Agreement on cooperation. 

The three regulatory authorities agreed to strengthen cooperation on supervision of financial markets, maintenance of the financial stability, protection of consumers of financial services. The agreement provides a comprehensive framework for cooperation and exchange of information in areas such as authorisation, ongoing supervision, insolvency procedures, financial recovery, anti-money laundering, unfair practices in the financial market and violations of the laws. 

The signing of this Agreement formalises arrangements for cooperation and information sharing between the three regulators, facilitating the performance of their respective supervisory tasks. It underscores the shared commitment to maintaining the highest standards of supervision and the joint promotion of a stable financial services sector in the country. The document enhances the safety and soundness of institutions in their respective jurisdictions, including combating financial crime, conducting consolidated supervision and protecting consumers of financial services. 

Mukhtar Bubeyev (AFSA) stated: “The signed agreement will allow all regulators to join efforts with ultimate goal to contribute to fostering greater financial stability, market integrity and more efficient regulatory cooperation. This cooperation will help exchange of information, hold regular meetings and supervisory interaction”. 

Regulation plays a critical role in creating an enabling environment for financial service providers whilst ensuring the interest of clients are protected for financial products like insurance business.

In recognizing the importance of effective regulation and supervision to develop sustainable insurance markets in the AIFC, the Astana Financial Services Authority (AFSA) held an online-workshop for insurance firms and insurance intermediaries across the AIFC to discuss the key challenges they face in the insurance business.

This event was devoted to various topics in the prudential regulation of insurance firms and insurance intermediaries and their reporting requirements – with keynotes and insights from the AFSA.

The participants also discussed the response to COVID-19 pandemic and regulatory relief measures taken by the AFSA.

AFSA plans to conduct similar workshops for banking and investment firms and welcomes all interested parties to join the discussion. The dates of such event will be announced later.

AFSA as a supervisory authority is committed to maintaining a regime that acts as a significant deterrent to any criminal elements, including money launderers and persons wishing to assist, in any way, acts of terrorism. The AFSA administers and enforces AIFC legislation on countering anti-money laundering (AML) and counter-terrorism financing (CFT). In this connection AFSA announces Lists of predicate offences and typology research reports for better understanding of the money laundering and terrorist financing threats by AIFC Participants.

List of Predicate offences

The List of Predicate offences relating to money laundering and terrorist financing  with references to the appropriate Articles of the Criminal Code of the Republic of Kazakhstan was adopted by AFSA based on the designated categories of offences defined in the Financial Action Task Force (FATF) Recommendations (2019).

Pursuant to R.3 and R.5 of the FATF Recommendations, Money laundering and Terrorist financing offences should be criminalised on the basis of the Vienna Convention, the Palermo Convention and the Terrorist Financing Convention. Countries should apply the crime of money laundering to all serious offences, with a view to including the widest range of predicate offences.

To see the list of predicate offences please click here

The list of typology research reports

The typologies reports on money laundering (ML) and terrorist financing (TF) methods can assist all AML/CFT stakeholders to better understand the nature of existing and emerging ML and TF threats and pursue effective strategies to address those threats. The typology research reports are publicly available at web-resources of FATF and FATF-style regional bodies (FSRBs). These documents provide the samples of ML and TF methods and trends, explanation of measures on combating ML and TF and general description of typologies and case studies. These samples of typology reports will assist financial institutions and non-financial businesses and professions in identifying, assessing and understanding ML and TF risks that they are exposed to as well as to detect and combat ML and TF.

Currently, AFSA does not have its practical samples of ML/TF typology reports and highly recommends to use as a guidance the list of typology research reports of FATF and FSRBs.

To see the list of typology research reports please click here

AFSA, the regulator of the Astana International Financial Centre, introduced a number of targeted measures to support AIFC participants, ensure market integrity and financial stability. These measures are designed to alleviate the negative impact on regulated firms due to the exceptional circumstances caused by COVID-19.

The regulator has revised plans for the submission of mandatory reports that are not critical to market integrity in the short term. This will allow companies – market participants – to focus on customer support and their business activities in this difficult period.

One of the immediate steps that AFSA has taken was the extension of the deadlines for submitting various types of mandatory reporting for 30 calendar days after the end of the state of emergency in Kazakhstan. Details can be found on the official website of the regulator here.

It is worth emphasizing that the regulator is operating in business as usual mode and continues performing supervision over the financial markets. AFSA employees work remotely and have all the necessary digital solutions for timely and efficient processing of requests and meetings with AIFC participants and consumers of financial services.

All financial services and AIFC platforms remain open and accessible to market participants. This includes the AIX, International Exchange of AIFC, which has continued to function smoothly from the start of the pandemic.

AFSA also maintains regular contacts with national regulators, foreign peer regulators and international standard setting organisations to ensure the efficient supervision of financial markets, cross-border transactions and coordinate responses to COVID-19 impacts. AFSA actively participates in ongoing discussions of possible regulatory actions in connection with COVID-19 and consumer protection measures on margins of IOSCO, IAIS, FinCoNet and others.

At the same time, AFSA draws the attention of Authorised Person to the importance of complying with requirements for systems and controls, particularly for policies on risk management, cyber-security and business continuity, and on ensuring the financial and operational resilience.

AFSA expects that prudentially regulated firms will actively manage their liquidity and should immediately report to the AFSA if there are reasons to believe the firm will be in difficulty. AIFC capital and liquidity requirements are benchmarked to international standards of Basel III and should ensure resilience to economic stress.

All Authorised Persons should immediately inform the AFSA of any significant developments and matters that could impact their ability to meet regulatory requirements.

AFSA is firmly committed to its regulatory mission and welcomes the timely actions of the Government of Kazakhstan and the National Bank of Kazakhstan to support the economy.

As the situation with the COVID-19 pandemic develops, the regulator plans to introduce new response measures for the effective functioning of the financial markets. AFSA will report all updates as they become available.

It is worth recalling that to date, 438 companies are registered in the AIFC. Since the beginning of the year, AIFC registered 75 new participants. These companies represent 40 countries, including the companies from Kazakhstan, Russia, China, Great Britain, the USA, India, Finland, Singapore, the United Arab Emirates, the Netherlands, Turkey, Switzerland, Germany, Italy and many others.

During this challenging period of COVID-19 pandemic, the Astana Financial Services Authority (AFSA) remains focused on its regulatory objectives to foster financial stability, promote market integrity, protect consumers and support financial markets in the AIFC.

AFSA is closely working with the regulated community to assess financial and economic impacts of the pandemic on operations of financial firms. Based on feedback received the AFSA has decided to grant relief measures to Authorised Firms in several areas in order to allow them to prioritize their business and operational issues during the times of disrupted economic activities. These measures include:

• Extension of the deadlines for submission of reports by Authorised Firms.
• Suspension of the deadlines for implementing recommendations by Authorised Firms and Ancillary Service Providers, that are due to expire during the State of Emergency in the Republic of Kazakhstan. Instead, these firms will be required to report to the AFSA on implementation of the recommendations within 30 calendar days after the end of the State of Emergency in the Republic of Kazakhstan or until provision of further instructions.
• Extension of the time period required by provision 3.4.2 (a) of MAR for making market disclosure by Reporting Entities in relation to its annual financial report at the latest on 1 September 2020.
• Suspension of the requirements envisaged in section 13.7. of AML Rules to submit Annual AML Return for 2019 until 30 calendar days after the end of the State of Emergency for all Ancillary Service Providers that are subject to AML regulation.

These efforts are designed to respond to the impacts and challenges raised by COVID-19. AFSA remains open to constant engagements with the regulated community to ensure financial stability and consumer protection.

Full texts of the notices are published here (link to notices).

3 April 2020 – Astana Financial Services Authority in collaboration with the AIFC Academy of Law held a second webinar for law and consulting firms on different aspects of registration and authorization processes. In view of health and safety considerations in these challenging times the AFSA held the training in the format of a webinar. Over 100 participants attended the session.

The webinar was devoted to registration procedures relating to Public Companies, Special Purpose Companies and Partnerships. It covered topical issues such as working with the self-service portal, compliance with legislative requirements, disclosure of Ultimate Beneficial Owners, transfer of incorporation to the AIFC.

The webinar also discussed applications for regulated activities and ancillary services and covered themes of communications with the home and host regulators, disclosure of controllers, anti-money laundering requirements, regulatory business plan, fitness and propriety of matters, conduct of business (holding Client Money and/or Client Investments) and prudential considerations, etc.

Yerlan Mukhanbediyev, Head of Office of the Legal Consulting Community Limited, noted: “Many thanks for regular Training sessions. It is a very valuable arena which provides an excellent opportunity for legal advisors and consultants ask passionate questions about right application of the AIFC Acting Law in the relation of authorization, registration, recognition and post-registration procedures.”

Tair Kulteleev, CEO of AEQUITAS Law Firm (AIFC Branch), noted: “Thank you for inviting to the Training Session about the AIFC Registration procedures and requirements.  I believe that under the current circumstances Zoom platform is an excellent tool to discuss the AIFC related matters. There are a lot of questions about such a new jurisdiction as the AIFC, and it will not be possible to keep us updated on the registration procedures and requirements in the AIFC without you or exchange information and knowledge.  So, thank you very much for this idea and professional presentation.”.

This is a second outreach event of AFSA for law and consulting firms. Detailed agenda is available here. AFSA plans to hold similar sessions regularly on quarterly basis.

Note on Recognized Non-AIFC Members

The Astana Financial Services Authority (“AFSA”) can recognize non-AIFC financial firms by granting the status of Recognized Non-AIFC Member (“RNAM”), which enables non-AIFC licensed firms to onboard the AIFC Astana International Exchange (“AIX”) as a trading member, according to AIX membership rules and approval process. The RNAM status does not enable a firm to offer any financial services in the AIFC or in Kazakhstan other than having access to trading activities in the AIX. Having remote access to the AIX allows RNAMs to buy and sell securities traded in the AIX on behalf of and to their clients located in jurisdiction where the RNAM is duly authorized to perform financial services. Full list of RNAMs is available here.

To have the right to offer financial services within the AIFC territory, a firm must obtain a license of the AFSA and establish presence in the AIFC. Full list of firms authorized by the AFSA is available here. Unless the RNAM is a licensed firm by the National Bank of Kazakhstan or the Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan it cannot offer financial services in Kazakhstan either.

RNAM status enables internationally licensed firms to become a trading member of the AIX, without having to undergo a lengthy application process to be fully licensed when the only sought activity is access and trading on AIX. An internationally licensed firm means that the firm is duly licensed in a jurisdiction other than AIFC. This jurisdiction will be assessed by AFSA to be broadly equivalent with the regulatory framework of AIFC, its laws and supervision of financial activities. Recognition process will provide the RNAM with the possibility to offer trading on AIX to its clients through a specific order.

Acknowledging importance of cross-border financial transactions and role of capital markets in empowering economic development the AFSA is pleased to facilitate recognition process of RNAMs willing to access trading activity on the AIX. Yet, the RNAMs must be cautious when publicizing its recognition status granted by AFSA and limit its client offering to having access to the AIX and trade its listed financial instruments. AFSA will consider any false and misleading information regarding the offer of financial services in the AIFC by RNAMs and non-licensed firms, as a breach of its rules and regulations and may take enforcement actions where it will deem necessary.

Please note that information contained above is purely informative and as such cannot be considered as legal advice for any specific purposes. You should not use the above mentioned information as a basis for decision making without consulting AFSA Officers or a legal consultant first. Accordingly, we expressly disclaim any liability for actions taken or not taken on the basis of information provided.

If you have any further questions, please submit your inquiry to the [email protected]. Should you wish to make complaints please use our online complaint submission tools available here.