Does an AIFC Participant need to be audited by the end of each financial year and are there any exceptions, for instance, if the AIFC Participant’s annual turnover has not exceeded U.S. $5,000?
According to AIFC Companies Regulations 2017, Directors of a Company must ensure that, within 6 months after the end of each financial year of the Company, the accounts for that year are shall be prepared and approved by the Directors and examined and reported upon by an Auditor.
Unless otherwise provided in its Articles of Association, a Private Company and its Directors are not required to provide examined and reported upon by an Auditor accounts, if the Company, during the current year for which the accounts are being prepared and, if the Company has existed for more than 1 financial year, the year immediately before that financial year, has an annual turnover of not more than U.S. $5,000,000 and an average of not more than 20 Shareholders.
Can I assure my clients that their interests are adequately protected, in relation to, for instance, market abuse by others and my own insolvency?
AIFC Conduct of Business Rules (COB), AIFC Prudential Rules for Insurance Intermediaries and AIFC Prudential Rules for Investment Firms as well as AIFC
Insolvency Regulations and Rules and AIFC Anti-Money Laundering, Counter – Terrorist Financing and Sanctions Rules ensure that the behaviour of firms operating in the AIFC contributes to fostering and maintaining the integrity of financial markets in the AIFC.
How are the jurisdictions of the AIFC bodies and national state authorities of the Republic of Kazakhstan delimited? In case of contradictions, how are they resolved?
Article 4 of the Constitutional Law of the Republic of Kazakhstan on the AIFC provides an exhaustive list of the areas of jurisdiction of the AIFC. Issues not included in this list are governed by the acting law of Kazakhstan, and the resulting contradictions and disputes are resolved within the framework of the judicial system of Kazakhstan. Tax disputes of the AIFC Participants are considered by the courts of the Republic of Kazakhstan.
If the AFSA and other AIFC bodies have no criminal prosecution powers, how does Anti-Money Laundering oversight work in the AIFC?
The Astana International Financial Centre AML Rules, which are administered by the AFSA, require AIFC financial institutions and certain other AIFC Participants to maintain policies, procedures and controls to ensure that they are not unwittingly being used by the clients and counterparties to facilitate money laundering or other types of financial crime. These requirements, which the AFSA has authority to enforce through the imposition of fines and other disciplinary measures, are in line with and complement the broader Kazakhstan AML/CTF regime. Kazakhstan's criminal legislation, including the AML Law and the Criminal Code of the Republic of Kazakhstan, applies to all AIFC Participants.
How does the AIFC regulation of financial technology actually work?
AFSA has established the Fintech Lab in the AIFC as a space in which firms can Test and/or Develop the FinTech Activities without being immediately subject to the full set of regulatory requirements under the AIFC Financial Services Framework Regulations and Rules made thereunder.
FinTech Lab is designed to allow firms to deliver effective competition in the interests of consumers by reducing the time, and potentially the cost, of getting FinTech to market, enabling greater access to the market for innovative firms, including start-ups, AFSA collaborating with the firms to ensure that appropriate consumer protection safeguards are built into their FinTech Activities and also enabling FinTech Activities to be Tested and/or Developed.
Firms considering the FinTech Lab option should refer to the AIFC Financial Technology Rules, which is available on the AFSA website.
Are AIFC Participants and banks operating in the AIFC subject to requirements of legislation of Kazakhstan in terms of currency control?
The legislation of the Republic of Kazakhstan on currency control is fully applicable subject to exemptions established by the Constitutional Statute of the Republic of Kazakhstan on AIFC (the “Constitutional Statute”).
Following the Constitutional Statute, the terms of, and procedures for, currency transactions related to the provision of financial and professional services in the territory of the AIFC as well as the requirements on AIFC Participants in relation to the provision of information about currency transactions are established by the AIFC Rules, adopted in with the agreement of the National Bank of the Republic of Kazakhstan and the Agency of the Republic of Kazakhstan on Regulation and Development of Financial Market.
The Rules on Currency Regulation and Provision of Information on Currency Transactions in the AIFC are available via the following link (https://aifc.kz/legal-framework/rules-on-currency-regulation-and-provision-of-information-on-currency-transactions-in-the-aifc/).