AIFC proposes easing regulatory burden on residents and exchange participants

The Astana Financial Services Authority (AFSA), the independent regulator of the Astana International Financial Centre (AIFC), has prepared consultation papers featuring amendments aimed at enhancing the center’s effectiveness and aligning it with international standards. The regulator is inviting market participants to provide feedback on the proposals. Furthermore, the membership admission criteria are proposed to be expanded, along with measures to facilitate securities issuance.
The amendments proposed by AFSA are divided into three areas: capital markets, digital assets and crowdfunding. In the capital markets section, the amendments aim to streamline companies’ information disclosure, apply corporate governance requirements only to issuers of equity securities and exempt debenture issuers. In addition, it is planned to raise the threshold for trading fungible securities (interchangeable with others within the same type or class) without requiring a prospectus.
The AIFC also proposes increasing the threshold for recognizing individuals and companies as related parties — persons or entities that have a close relationship with a company, including senior management, major shareholders, close family members or others with significant influence or control — from 5% to 20% of voting shares held. Related parties are subject to stricter requirements concerning disclosure and financial reporting, particularly for deals involving them.
In the area of digital assets, digital asset service providers who do not hold digital assets or operate distributed ledger technology are proposed to be exempt from certain requirements. Additionally, eligibility criteria for platform membership to trade such assets may also be expanded.
The AIFC developed a legal framework for crowdfunding platform operations in 2019, and one of those platforms is currently operating within the center at full capacity. Under the proposed amendments, platforms will be required to strengthen client protection by improving the selection of borrowers and issuers, limiting financing for borrowers with payment issues and providing clearer risk warnings. Moreover, crowdfunding platforms at the AIFC will be accessible not only to companies but also to sole proprietors.
The AIFC is accepting comments on the proposed amendments until Sept. 15. All feedback is promised to be carefully reviewed and the proposed amendments may be modified if needed.
Earlier this week, Kazakhstan announced foreign nationals would be allowed to both register under the AIFC jurisdiction and establish businesses — all remotely.