NSC Regulations
Legislative Changes

No significant changes were made to Kazakhstan's securities legislation in the last few months. However, the National Securities Commission of the Republic of Kazakhstan (NSC) has adopted a number of specific regulations which may be of interest to securities market players. In addition, minor changes were made to the Securities Market Law and the Law on Registration of Securities Transactions in the Republic of Kazakhstan, both dated March 5 1997.

NSC Regulations

On March 11 2001 the NSC and the Commission for the Regulation of Accumulating Pension Fund Activities issued a joint regulation on the publication in the mass media of information regarding the joint aggregate reports of accumulating pension funds and pension fund management companies. The regulation is intended to improve transparency and ensure the disclosure of information to interested parties, as well as to provide information on the activities of pension funds and management companies. It establishes specific rules for the publication of information in the mass media.

On May 15 2001 the NSC Board adopted a technical resolution concerning the approval of rules for the assignment of national identification numbers to state securities. The rules establish detailed procedures for the NSC's assignment of national identification numbers to securities issued by the Ministry of Finance of Kazakhstan, the National Bank of Kazakhstan and local (municipal) governments. The also set out how these national identification numbers will be monitored.

On May 28 2001 the NSC Board adopted a resolution concerning the actions of registrars in the event of termination of a contract to provide services relating to the maintenance of securities holder registers. This technical resolution establishes detailed procedures for the termination of a service contract between the securities holders and the registrar, and stipulates specific acts which should be undertaken by the registrar. The purpose of this regulation is to provide additional reassurance and protection to investors on the securities market.

On May 14 2001 the NSC Board adopted a resolution on the presentation of audited financial statements by entities that are licensed to perform activities on the securities market. This resolution obliges licensed entities to file audited financial statements with the NSC on an annual basis and within certain specified timeframes.

Legislative Changes

The new Law on the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Related to Securities, dated July 11 2001, has made minor changes to the securities legislation.

Article 44(2) of the Securities Market Law has been amended so that the new text of this paragraph specifically permits the management boards of the securities exchanges to develop and amend their own rules and procedures for the sale of securities. However, these rules must be approved by the NSC and by a general meeting of the members of the securities exchange.

Article 58(3) of the same law now provides that rules established by self-regulating organizations, and amendments and/or additions thereto, must be approved by the NSC and by a general meeting of the organization's members.

Meanwhile, Article 24(2) of the Law on the Registration of Securities Transactions now stipulates that the rules established by the Central Depository, and amendments and/or additions thereto, must be approved by the NSC and by a general meeting of the Central Depository's shareholders.

For further information on this topic please contact Yuriy Maltsev at White & Case by telephone (+7 3272 50 74 91) or by fax (+7 3272 50 74 93) or by e-mail ([email protected]).

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