THE RESOLUTION OF BOARD OF THE AGENCY OF THE REPUBLIC OF KAZAKHSTAN ON REGULATION AND DEVELOPMENT OF THE FINANCIAL MARKET

of November 23, 2022 No. 105

About approval of Rules of provision of the investment recommendation to the individual investor, qualification requirements to the employee of the organization performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio

According to Items 2 and 3 of article 53-2 of the Law of the Republic of Kazakhstan "About the security market" Board of the Agency of the Republic of Kazakhstan on regulation and development of the DECIDES: financial market

1. Approve Rules of provision of investment recommendations to the individual investor, qualification requirements for employees of the organizations performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio according to appendix to this resolution.

2. To provide to department of the security market in the procedure established by the legislation of the Republic of Kazakhstan:

1) together with Legal department state registration of this resolution in the Ministry of Justice of the Republic of Kazakhstan;

2) placement of this resolution on official Internet resource of the Agency of the Republic of Kazakhstan on regulation and development of the financial market after its official publication;

3) within ten working days after state registration of this resolution submission to Legal department of data on execution of the action provided by the subitem 2) of this Item.

3. To impose control of execution of this resolution on the supervising vice-chairman of the Agency of the Republic of Kazakhstan on regulation and development of the financial market.

4. This resolution becomes effective after ten calendar days after day of its first official publication.

Appendix

to the Resolution of the Acting Chairman of the Agency of the Republic of Kazakhstan on regulation and development of the financial market of November 23, 2022 No. 105

Rules of provision of the investment recommendation to the individual investor, qualification requirements to the employee of the organization performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio

Chapter 1. General provisions

1. These rules of provision of investment recommendations to the individual investor, qualification requirements for employees of the organizations performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio (further – Rules), are developed according to Items 2 and 3 of article 53-2 of the Law of the Republic of Kazakhstan "About the security market" and determine procedure for provision of the investment recommendation to the individual investor, qualification requirements to the employee of the organization performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio.

Chapter 2. Procedure for provision of the investment recommendation to the individual investor and determination risk profile of the individual investor

2. The employee of the organization performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio (further – investment adviser) renders services in provision to individual investors of consultations according to the conclusion of security transactions and other financial instruments by provision of individual investment recommendations based on the service provision agreement about investment consulting.

Requirements to contents of the individual investment recommendation it is established by the internal document of the organizations performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio.

3. The investment recommendation is provided after determination by investment adviser risk profile of the individual investor. The risk profile of the individual investor is determined by filling with the individual investor of the questionnaire which form is established by the internal document of investment adviser. The risk profile is meant assessment information on profitability of investment which the individual investor, the horizon of investment and admissible risk of losses from investment expects.

4. The investment adviser does not provide the investment recommendation to the individual investor who did not provide information specified in Item 5 of Rules for determination risk profile of the individual investor.

5. For determination risk profile of the individual investor the investment adviser by means of questioning requests the following information:

1) age;

2) education;

3) the monthly income for the last 12 months;

4) monthly expenses for the last 12 months (the fixed expenses and the varied expenses);

5) availability of available funds, except for means which the individual investor plans to use in the period of the investment horizon;

6) expected term of investment;

7) the maximum loss which the individual investor is ready to incur as a result of the investment;

To receive the income which the individual investor expects as a result of investment.

6. By results of the carried-out questioning, the investment adviser constitutes risk profile of the investor which contains:

1) information on profitability of investment which the investor expects, the investment horizon for which the investor expects to gain this income and admissible risk of losses from this investment;

2) the recommendation to the individual investor about need to notify investment adviser on change of earlier provided data for the purpose of receipt of the most suitable investment recommendations.

7. The investment adviser ensures safety, confidentiality and invariance of information obtained from the investor, and also provides storage of all documents connected with provision of investment recommendations within five years.

Chapter 3. Qualification requirements to the employee of the organization performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio

8. The employee of the organization which is performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio, having the right to provide the investment recommendation conforms to the following qualification requirements:

1) availability of the higher education;

2) experience of work at least 3 (three) years in the organization performing professional activity in the security market as the trader, the analyst of the financial market, the risk manager, investment adviser or the managing director of investment portfolio.

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