Questions and answers

  • If I am an AIFC Participant, and have a branch in Almaty, can I do business through the branch under the Acting Law of the AIFC?

  • If I am an AIFC Participant, and my clients are in the rest of Kazakhstan, what do I have to do to ensure that my contracts with, and transactions for, my clients are governed by Acting Law of the AIFC?

  • What is being established at the AIFC site?

  • What is the AIFC?

  • What is the objective of the AIFC?

  • What will be the initial principal activities to be carried out at the AIFC?

  • What is the role of the AIX?

  • What is the role of the AIFC Court?

  • What is the role of the AIAC?

  • What is an AIFC participant?

  • Why become a participant in the AIFC?

  • How do I become a participant?

  • Do I have to form an AIFC company to be an AIFC Participant, or can I establish a branch which is an AIFC participant?

  • Do I need to have an office in the AIFC to be a participant?

  • Do I need to have full time employees based in the AIFC, if so what are the requirements for this?

  • Under AIFC Rules can an AIFC Participant service clients in “mainland” Kazakhstan or outside Kazakhstan from their office in the AIFC?

  • Can an AIFC Participant provide investment services for which it has AIFC authorisation to clients elsewhere in Kazakhstan without the need for any other authorisation and without being subject to regulation by the Central Bank or any other body?

  • If I want to sell units in funds in the rest of Kazakhstan from my office in the AIFC, as an AIFC Participant, do I have to establish the funds in the AIFC or can I market the securities of funds established outside AIFC?

  • Is it required for a firm to be a member of AIX or AIFC Participant in order to trade securities on AIX?

  • How can a partnership of lawyers come into the AIFC to practise law there, if the partnership is not an entity in its home state?

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The AIFC and associated institutions

What is being established at the AIFC site?

The official and ancillary “AIFC Bodies” will be headquartered here, including the Astana International Financial Centre Authority (AIFCA), the Astana Financial Services Authority (AFSA), the Astana International Exchange (AIX), the AIFC Court, the Astana International Arbitration Centre (AIAC) and the AIFC Expat Centre.

Additionally, the site will be home to brand-new, state-of-the-art business, commercial and conference facilities in which Centre Participants can maintain premises and carry on their business activities. The site will also boast prime hospitality and shopping venues.

What is the AIFC?

Geographically, it is a large defined zone within the City of Astana wherein Centre Participants may be located and carry on their business activities. Conceptually, the Centre is poised to be a financial hub for Central Asia, the Caucasus, the Eurasian Economic Union (EAEU), the Middle East, West China, Mongolia and Europe.

What is the objective of the AIFC?

Objectives of the AIFC are as follows:
  • to attract investment into the economy of the Republic of Kazakhstan by creating an attractive environment for investment in the financial services sphere;
  • to develop a securities market in the Republic of Kazakhstan and integrate it with international capital markets;
  • to develop insurance markets, banking services, Islamic finance, financial technologies, electronic commerce and innovative projects in the Republic of Kazakhstan;
  • to develop financial and professional services based on international best practice;
  • to achieve international recognition as a financial centre.

What will be the initial principal activities to be carried out at the AIFC?

Our current regulatory framework provides for the conduct and regulation of several defined regulated financial services activities, including dealing in securities, managing
 
and advising on investments and managing collective investment schemes, providing and arranging custody services, providing trust and fund administration services and Islamic banking and financing, among several others.

Insurance intermediation is a current permitted activity, and the AFSA is now building out the framework for the conduct and regulation of insurance and reinsurance activities as well as the framework for conventional banking.

The current framework also provides for market infrastructure activities such as operating an exchange and operating a clearing house.

Additionally, a range of professional services ancillary to financial markets and services can be carried on, including legal, audit, accountancy, consulting and credit rating services.

The general legal framework of the AIFC also provides for the incorporation, registration and commercial licensing of entities carrying on a wide range of other corporate and commercial activities, which can thereby also become Centre Participants.

What is the role of the AIX?

The role of the AIX is to enable domestic and regional development, through the mobilisation of domestic resources and foreign portfolio flows. In doing so, the exchange promotes good governance through its business practices.

Wide geographical coverage
The Astana International Exchange encourages healthy competition between local and foreign parties, with equal regulations in place for all participants, based on the highest international standards. Securities can also be denominated in four currencies (KZT, RUB, USD and RMB).

Opportunities for clients
The AIX will offer investors access to national assets which are to have IPOs on the exchange, as well as government and corporate issued securities from Kazakhstan and other countries. It will also provide sources of income for national institutional investors.

Variety of products and services
A wide range of different asset classes, including equity, debt and derivative instruments, funds, commodities, and products accordant to Islamic finance, will be available on the AIX.

What is the role of the AIFC Court?

To adjudicate (a) claims arising out of the AIFC and its operations and (b) other claims in which all parties to the dispute agree in writing to the jurisdiction of the AIFC Court.  

What is the role of the AIAC?

To provide world class services for settling national and international commercial disputes through arbitration, mediation and other methods of alternative dispute resolution, in accordance with the IAC Arbitration and Mediation Rules or the rules agreed upon between the parties of a dispute, supported by the AIFC Court.

Exactly which advantages does AIFC have in terms of access to Belt and Road Initiative projects?

Kazakhstan is one of the key countries for the Belt and Road Initiative, and AIFC aims to become the investment and financial hub for this effort. With support from the Shanghai Stock Exchange, AIFC and AIX are engaged with banks, brokerage houses and investors from China.  This partnership enhances awareness and recognition of AIFC and AIX in China.

How does AIX plan to participate in the Belt and Road Initiative?

Sustainable and effective financing is a key condition for implementation of the projects of the Belt and Road Initiative.  It is well-know what capital markets are the most effective way to finance projects.  For this reason, AIX has defined its potential role within the Belt and Road Initiative as an effective platform to provide financing for its projects, and is developing ways to provide this support.  AIX has created a special board for Belt and Road projects – Belt and Road Marketplace – which has special features to ensure effective support and financing for the projects.  AIX is not trying to replace the existing sources of financing for Belt and Road Initiative projects, but is seeking to establish itself as an additional source of financing for them.

When are major offerings – IPOs, sukuk, conventional bonds – expected on AIX?

AIX is pursuing two tracks to attract issuers. First, IPOs/SPOs of major state-owned companies under the 2018–2021 Privatization Program for JSC companies of the Samruk-Kazyna National Welfare Fund JSC (hereinafter – the Fund). The shares of Kazatomprom JSC have already been listed on AIX in though an IPO. In 2019, the Exchange will be ready to provide its platform for the listing of the Fund's other companies: Air Astana JSC, Kazakhtelecom, and at a later stage, KazMunayGas National Company JSC.

Second, we plan to list on AIX government securities of Kazakhstan's Ministry of Finance and securities of quasi-government and private companies. At the same time, we are working with prospective issuers from countries of the Eurasian Economic Union and Central Asia, and with our strategic partners within the Road and Belt Initiative.

In addition, we cooperate with Kazakhstan's biggest financial conglomerates, which are currently assessing AIX's legal regime and are considering the option of listing on AIX.

Which benefits does partnership with Shanghai Stock Exchange provide to AIX. Does it provide an access to additional sources of funding in China?

Cooperation between AIFC and Shanghai Stock Exchange is comprehensive and includes attracting investments, joint business development activities, and HR support. AIFC, AIX and SSE are also working very closely to promote Belt and Road projects in Kazakhstan and throughout the region.

AIX’s partnership with the Shanghai Stock Exchange ensures access to the liquidity in China.

If I am to use the AIFC Employment Regulations, can I adapt it to my needs, and to what extent?

The existing employment contracts used by AIFC bodies, organizations and participants remain in force for 12 months beginning with January 1, 2018. Within this period, employers have to replace the existing employment contracts by an Employment Contract that meets the requirements of the 2017 AIFC Act on Employment. The 2017 AIFC Act on Employment sets out minimal standards for employment and does not prevent the employer from providing more favorable employment conditions for an employee than those required under the 2017 AIFC Act on Employment.

Are decisions of the AIFC Court and awards of the IAC enforceable in the territory of Kazakhstan outside the AIFC?

Yes. Decisions of the AIFC Court are enforced in the Republic of Kazakhstan in the same manner and under the same conditions as decisions of courts of the Republic of Kazakhstan.  Decisions of the International Arbitration Centre are recognized and enforced in the Republic of Kazakhstan in the same manner and under the same conditions as arbitral awards of arbitration institutions of the Republic of Kazakhstan. IAC arbitral awards are enforced in the territory of the Republic of Kazakhstan by applying to the AIFC Court and receiving an order of enforcement.

Can parties to disputes arising in Kazakhstan outside the AIFC bring their cases to the AIFC Court, or the International Arbitration Centre?

Yes, if parties agree in writing to choose the AIFC Court or the International Arbitration Centre to resolve their dispute. Such consent can be given at any point in time, both before or after the dispute has arisen.

Will decisions of the AIFC Court be enforceable in other countries?

Decisions of the AIFC Court are enforceable at the international level in accordance with bilateral and multilateral agreements concluded between the Republic of Kazakhstan and other countries. They may also be enforceable in foreign courts applying the international principles of comity and reciprocity.

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