Kazakhstan wants to allow Euroclear and Clearstream to open accounts in the Central Securities Depository (CSD) directly, announced Madina Abylkassymova, chair of the Agency for Regulation and Development of the Financial Market of Kazakhstan (ARDFM), during the parliament’s plenary meeting.
She clarified that the legislative draft enabling international settlement institutions to directly open accounts in the CSD aims to facilitate foreign investors’ access to the Kazakhstani stock market. This regulation will make it possible for Euroclear and Clearstream to confirm their clients’ ownership of Kazakhstani securities and hold records of them.
«The clearing organization is authorized to conduct broker and dealer operations in order to optimize the process of resolving defaults in the stock market,» Abylkassymova added.
Moreover, the draft law proposes adding the national management of the Baiterek holding, along with its affiliated legal entities and the Kazakhstan Stability Fund (KSF), to the list of guarantors for secured bonds. This amendment serves to encourage corporate bond market development, the chair of the ARDFM added.
Cabinet is also examining initiatives meant to expand the investing field for the insurance companies. The regulator suggests introducing a wider range of services and investing space for IT insurance.
«The insurance organizations will be able to develop their own software for the insurance activity automation. They will also be empowered to acquire IT subsidiaries,» Abylkassymova explained.
Moreover, the ARDFM will set requirements for organizations and individuals involved in financing the proliferation of weapons of mass destruction, terrorism and extremism regarding their participation in the equity of insurance brokers following the Financial Action Task Force (FATF) standards on combating money laundering and terrorism financing.
Earlier this week, Abylkassymova announced that the ARDFM is willing to ease the process of establishing subsidiaries in Kazakhstan for the foreign banks. In particular, the regulator plans to streamline the list of required documents, lower the asset requirements and expand the range of permitted activities.
Last year, President Kassym-Jomart Tokayev stated that attracting three additional foreign banks to Kazakhstan is essential for increasing competition in the sector. Prior to this, the ARDFM had reported on easing the requirements for microfinance organizations to transform into banks.
Currently, three major microfinance organizations — KMF, Solva and BNK Finance — are planning to be transformed into commercial banks. The first two are still in the process of obtaining a license for transformation, while BNK Finance has already received the president’s approval to undergo the transformation this year. All of these organizations have foreign shareholders.
