Brokers/Dealers
Securities Registrars
Pension Fund Management Companies
Reporting Requirements
On February 16 2002 the National Bank of Kazakhstan issued Resolution 54, which approves rules for evaluating the financial viability and stability of brokers and dealers active on the securities markets.
Under the new resolution, brokers/dealers who are licensed to act as the nominal holder of their clients' accounts must have minimum capital of at least 30,000 monthly specified rates (about $160,000). All other brokers/dealers must maintain capital of at least 15,000 monthly specified rates (about $80,000).
The resolution also obliges brokers/dealers to ensure the absolute liquidity of their assets up to a specified value.
Securities Registrars
On February 16 2002 the National Bank of Kazakhstan issued Resolution 52, which approves rules for evaluating the financial viability and stability of securities registrars (ie, entities that maintain registers of security holders).
Like brokers and dealers, securities registrars must have specific amounts of minimum capital, as follows:
- for securities registrars that maintain a register of securities holders of less than 30 issuers, at least 50,000 monthly specified rates (about $267,000);
- for securities registrars that maintain a register of securities holders of between 30 and 100 issuers, at least 40,000 monthly specified rates (about $214,000); and
- for securities registrars that maintain a register of securities holders of over 100 issuers, at least 30,000 monthly specified rates (about $160,000).
Again, they are required to ensure the absolute liquidity of their assets up to a specified value.
Pension Fund Management Companies
The National Bank of Kazakhstan's Board Resolution 121, dated April 5 2002, has amended an earlier resolution on the regulation of pension fund management companies (Resolution 11, dated August 13 1998).
The new resolution is intended to bring existing National Bank of Kazakhstan regulations into line with applicable Kazakh legislation, and to widen the scope of investment opportunities of which pension fund management companies can avail. These companies are now permitted to acquire the following non-state securities of foreign issuers:
- debt securities with an international credit rating of at least AA (according to Standard & Poor's or Fitch) or Aa2 (according to Moody's Investors Service);
- shares of issuers whose securities have a credit rating of at least AA (according to Standard & Poor's or Fitch) or Aa2 (according to Moody's Investors Service);
- securities of issuers with a credit rating of at least AA (according to Standard & Poor's or Fitch) or Aa2 (according to Moody's Investors Service), provided that the authorized agency permits such acquisitions;
- debt securities with a rating of at least A (according to Standard & Poor's or Fitch) or A2 (according to Moody's Investors Service);
- shares of issuers whose debt securities have a credit rating of at least A (according to Standard & Poor's or Fitch) or A2 (according to Moody's Investors Service); and
- securities of issuers with a credit rating of at least A (according to Standard & Poor's or Fitch) or A2 (according to Moody's Investors Service), provided that the authorized agency permits such acquisitions.
The resolution also specifies the percentage of their assets which pension funds may invest in each specific financial instrument.
On April 13 2002 the National Bank of Kazakhstan adopted Resolution 130, which establishes the procedures that professional securities market participants and traders should follow when filing weekly and monthly reports. The resolution is intended to create greater transparency and efficiency in securities market operations, and to protect the rights and interests of investors.
The procedure requires brokers and dealers to submit the following reports to the National Bank of Kazakhstan:
- By 10:00 am (Almaty time) on the first business day of a week that follows a reporting week, they must submit an electronic version of (i) a report of all transactions concluded during that week which involved non-state securities of Kazakh organizations on the non-organized securities market; and (ii) a report of all transactions concluded in the course of the initial placement of non-state securities of Kazakh organizations on the non-organized securities market.
- By 10:00 am (Almaty time) on the fifth day of a month that follows a reporting month, they must submit both an electronic version and a hard copy of (i) a report of all transactions concluded, but not yet performed, which involve non-state securities of Kazakhstan organizations on the non-organized securities market; and (ii) a consolidated report regarding transactions with non-state securities of Kazakh organizations performed on the non-organized securities market.
- By 10:00 am (Almaty time) on the first business day of a week that follows a reporting week, brokers and dealers that are not banks but that are nonetheless duly licensed to maintain client accounts as a nominal holder must submit an electronic version of a report regarding all operations connected with the transfer of non-state securities of Kazakh organizations.
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 email ([email protected]).