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Recent changes to the Securities Market Law and NBK Regulation affecting the AIFC

November 2018We discuss below the chanes to (i) the Securities Market Law, effective 21 October 2018, and (ii) the NBK Regulation, effective 8 October 2018, affecting certain matters related to the Astana International Financial Center (AIFC). Our note is intended to be a helpful guide – it is therefore not comprehensive and does not constitute legal advice.

The changes effectively created legal framework to trade Kazakhstan securities on the AIFC and use AIX as a local stock exchange in international offerings of Kazakhstan resident securities. This was previously available to the Kazakhstan Stock Exchange only.

On 5 October 2018, Kazakhstan adopted the Law No. 184-VI ЗРК "On amendments and changes to certain legislative acts of the Republic of Kazakhstan on matters of ensuring the uniformity of measurement and standardization" (the “Law”). Among other things, the Law introduces changes to the Securities Market Law, which affects the regulations related to operations of the AIFC. The provisions of the Law regulating the matters related to the AIFC became effective on 21 October 2018.

There were also changes made to the NBK Regulation regarding the prohibition on double listing, which impact the AIFC. These changes became effective on 8 October 2018.

New changes in the Law

The Law provides for the following changes:

Exemption from the Requirements of Article 22-1 if International Offering is made via AIFC

Under Article 22-1 of the Securities Market Law, Kazakhstan residents wishing to issue and/or place securities outside Kazakhstan as well as list such shares on a foreign stock exchange must obtain consents from the National Bank of Kazakhstan (NBK).

The NBK Consents can be granted if (in summary without details):

  • the securities of the Kazakhstan resident are listed on the KASE (KASE listing);
  • the Kazakhstan resident offers on the KASE at least 20% of the new securities (Local Offer Requirement),

(The KASE listing and Local Offer Requirement are hereinafter referred to as the “Article 22-1 Requirements”).

With the new Law, a Kazakhstan resident will no longer need to comply with the Article 22-1 Requirements if it complies with the AIFC Offer Requirement as described below.

If a Kazakhstan resident makes an International Offering, it will not be required to obtain the NBK Consents, undertake a listing on KASE, or comply with the Local Offer Requirement and other formalities under Article 22-1 of the Securities Market Law, if such Kazakhstan resident:

  • issues and (or) places new securities at the AIFC; and
  • offers at least 20% of such new securities at the AIFC,

(the “AIFC Offer Requirement”).

The AIFC Offer Requirement effectively means that a Kazakhstan resident will need to list its securities on the Astana International Exchange (the AIX), which is the trading platform of the AIFC.

AIX CSD acting as a nominal holder

The Securities Market Law previously provided that only the following organisations can perform nominal holding services in Kazakhstan: (i) the Central Depositary, (ii) custodians, brokers and (or) dealers (who have a relevant licence for nominal holding of securities) and (iii) the single operator in respect of the nominal holding of securities owned by the state (or in respect of which the state has property rights) (the “Nominal Holding Service”).

AIX CSD is the organisation, which carries out registration of transactions with securities and provides depositary services at AIFC.

With the new Law, AIX CSD can now render Nominal Holding Service.

AIX CSD providing Nominal Holding Service for another nominal holder

The Securities Market Law provides that in Kazakhstan, with the exception of the Central Depositary and custodians who provide nominal holding services in respect of foreign securities or foreign organizations who perform nominal holding services, a nominal holder is not entitled to provide nominal holding services to another nominal holder.

The Law will now allow the AIX CSD to provide nominal holding services to another nominal holder in respect of securities transferred to AIX CSD for nominal holding.

AIX CSD as the client of the Central Depositary

Given the above changes, the AIX CSD providing nominal holding services will now become a client of the Central Depository (in addition to other entities who are customarily the clients of the Central Depositary under the Securities Market Law).

Lifting of the prohibition on double listing

Until recently, the NBK Regulation contained a prohibition whereby the securities of an issuer listed on the KASE could not be simultaneously admitted to circulation on another stock exchange or a quotation organization operating in Kazakhstan (the “Double Listing Prohibition”).

So effectively, the Double Listing Prohibition meant that shares listed on the KASE could not be simultaneously listed on another stock exchange operating in Kazakhstan such as the AIX.

Until now, the Double Listing Prohibition has not been an issue because the KASE was the only stock exchange in the country.

However, with the opening of the AIX in 2018, the possible lifting of the Double Listing Prohibition became particularly relevant.

The NBK Regulation has now been amended to remove the Double Listing Prohibition. Kazakhstan residents can now list the same securities on the AIFC and the KASE simultaneously.

For further information, please contact Joel Benjamin, Managing Partner, at


Adlet Yerkinbayev, Partner, at Kuanysh Shekerbekov, Senior Associate, at .


AIFC – Astana International Financial Centre.

AIX CSD – organisation which is engaged in the registration of transactions with securities and provides depositary service.

AIX – Astana International Exchange.

Central Depositary – Central Securities Depository JSC.

Securities Market Law – the Law No. 461-II of the Republic of Kazakhstan “On Securities Market” dated 2 July 2003 (as amended).

Kazakhstan Resident – for the purposes of the Securities Market Law, the Kazakhstan resident which either (i) is established in Kazakhstan, or (ii) has at least two-thirds of its assets located in Kazakhstan, or issued in accordance with Kazakhstan legislation (for example, the assets comprise Kazakhstan securities), or (iii) has effective management located in Kazakhstan.

KASE – Kazakhstan Stock Exchange.

NBK – National Bank of Kazakhstan.

NBK Consents – the prior written permission of the NBK to issue and place securities outside Kazakhstan.

NBK Regulation – the decree of the management board of the Agency of the Republic of Kazakhstan on regulation and supervision of the financial market and financial organisations on approval of the Rules “On conducting the activities of the organisation engaged in trading of securities and other financial instruments” dated 29 September 2008, no. 170 (as amended).

International Offering – offering of the securities of the Kazakhstan resident outside Kazakhstan.

Local Offer Requirement – offering on the KASE at least 20% of the total number of securities being offered in connection with the International Offering.