May 18, 2022
Forex currency market in Kazakhstan
The draft Law of the Republic of Kazakhstan “On amendments and additions to some legislative acts of the Republic of Kazakhstan on regulation and development of the insurance market and the securities market” was approved in the second reading at the plenary session of the Mazhilis of the Parliament of the Republic of Kazakhstan.
“The draft law is aimed at creating legal conditions for the development of the insurance market and the securities market through the introduction of new insurance products, optimization of mandatory insurance classes, further digitalization of services, improving the quality of consumer and investor protection, bringing current legislation in line with the best international practices,” the Agency for Regulation and Development of the Financial Market reminds.
It is assumed that in the future only licensed brokers and dealers will be able to provide investment consulting and mediation services in the market, including the Forex market in Kazakhstan. Thus, measures to protect the rights of investors in the stock market are being strengthened: fiduciary responsibility is being introduced against a broker or an investment portfolio manager (including forex brokers) for losses incurred by a client as a result of investment recommendations submitted.
“In the draft law on the regulation of the insurance market, we have provided that brokers, dealers who will provide services to individuals to raise money for any financial instruments, must first of all have a license. That is, now any citizen of ours, when he invests somewhere, must check whether the person who attracts money has a license from the Financial Supervision Agency or not,” Deputy Denmark Espayeva said on the sidelines of the Mazhilis.
“In terms of the insurance market, it is planned to introduce joint pension annuities, the possibility of participation of life insurance companies in the State Educational Accumulative System (GONS) and the extension of the guarantee system to all mandatory types of insurance and socially significant insurance products, such as pension annuity and life insurance carried out within the framework of GONS, the transition to flexible pricing for mandatory auto insurance”, – she explained.
The draft amendments were submitted to the Parliament of the Republic of Kazakhstan in July 2021. In order to improve certain provisions of the draft law , the following amendments were adopted:
– establishment of the possibility of conducting transactions on the stock market of Kazakhstan with securities issued in accordance with the acts of the Astana International Financial Center;
– providing microfinance organizations with the opportunity to convert into a second-tier bank through the conversion mechanism, without interrupting microfinance activities until obtaining a banking license;
– establishment of the obligation of insurance companies to provide information on insurance and reinsurance contracts to the State Credit Bureau in order to create a full-fledged centralized database on insurance statistics, improvement of legislation regulating access to a Single insurance database when receiving information containing insurance secrets;
– expanding the opportunities of banks, bank holdings and their subsidiaries to participate in the capital of non-financial organizations, including fintech companies, in order to develop financial technologies, which will contribute to increasing financial inclusion, expanding public access to financial services and increasing the level of competition in the financial market.