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The document ceased to be valid since January 1, 2019 according to Item 3 of the Resolution of Board of National Bank of the Republic of Kazakhstan of November 29, 2018 No. 300

RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of February 13, 2012 No. 34

About approval of Rules of application of measures of early reaction and technique of determination of the factors influencing deterioration in financial position of the organizations performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio

(as amended on 19-12-2015)

According to the Law of the Republic of Kazakhstan of December 28, 2011 "About modification and amendments in legal acts of the Republic of Kazakhstan concerning banking regulation and the financial organizations regarding risk minimization" the Board of National Bank of the Republic of Kazakhstan DECIDES:

1. Approve the enclosed Rules of application of measures of early reaction and technique of determination of the factors influencing deterioration in financial position of the organizations performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio.

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

Chairman of National Bank

G. Marchenko

Approved by the Resolution of Board of National Bank of the Republic of Kazakhstan of February 13, 2012 No. 34

Rules of application of measures of early reaction and technique of determination of the factors influencing deterioration in financial position of the organizations performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio

These rules are developed according to the Law of the Republic of Kazakhstan of July 2, 2003 "About the security market" and establish procedure for application of measures of early reaction and technique of determination of the factors influencing deterioration in financial position of the organizations performing broker and (or) dealer activities in the security market and (or) activities for management of investment portfolio (further - the Organization).

Requirements of these rules do not extend to banks of the second level when implementing of broker and (or) dealer activities by them in the security market.

1. The factors influencing deterioration in financial position of the Organization are:

1) decrease in coefficient of sufficiency of equity;

2) decrease in amount of quick assets;

3) unprofitable activities.

2. Determination of the factors influencing deterioration in financial position of the Organization, stipulated in Item 1 these rules is performed by the following technique:

1) decrease two and more times within three consecutive months of coefficient of sufficiency of equity to or is lower than the level, the coefficient of sufficiency of the equity established by the resolution of Board of National Bank of the Republic of Kazakhstan of February 3, 2014 No. 7 "About establishment of the prudential standard rate for the organizations exercising control of investment portfolio, approval of Rules of calculation of the prudential standard rate for the organizations exercising control of the investment portfolio and modification and amendments in some regulatory legal acts of the Republic of Kazakhstan concerning the security market" registered in the Register of state registration of regulatory legal acts at No. 9410 exceeding the minimum value on 0, (further – the resolution No. 7), and the resolution of Board of National Bank of the Republic of Kazakhstan of July 16, 2014 No. 146 "About establishment of the prudential standard rate for the organizations performing broker and (or) dealer activities in the security market, approval of Rules of calculation of the prudential standard rate for the organizations performing broker and (or) dealer activities in the security market", registered in the Register of state registration of regulatory legal acts at No. 9736 (further – the resolution No. 146);

2) decrease in coefficient of sufficiency of equity when finding its initial value below of the level exceeding the minimum value of coefficient of sufficiency of the equity established by the resolution No. 7 and the resolution No. 146 on 0,3;

3) cumulative decrease in amount of quick assets within three consecutive months more than for 20 (twenty) percent and more;

4) unprofitable activities within three consecutive months.

3. The National Bank of the Republic of Kazakhstan (further - authorized body) performs the analysis of organization activity for identification of the factors influencing deterioration in its financial position, monthly (as of the end of month) based on data of the regulatory reporting and information provided by the Organization based on the written request of authorized body.

4. In case of identification of the factors specified in Item 1 of these rules, in analysis result of financial position of the Organization and (or) following the results of its check, the authorized body sends to the Organization the requirement in writing for submission of the actions plan providing measures of early reaction for increase in financial stability of the Organization, non-admission of deterioration in its financial position and increase in the risks connected with implementation of professional activity in the security market.

The organization, in time no more than five working days from the date of receipt of the specified requirement, develops and represents the actions plan containing to authorized body:

1) the detailed analysis of the factor (factors) influencing (influencing) deterioration in financial position of the Organization;

2) forecast of factor (factors), reasons for this forecast and negative impacts on organization activity;

3) measures for improvement of this factor (these factors), that is bringing to the level which is not posing threat and not creating additional risks for organization activity;

4) completion dates of the actions plan (with indication of completion dates on each Item of the actions plan);

5) responsible officials for execution of the actions plan (with indication of the officials responsible for execution, on each Item of the actions plan).

5. The authorized body carries out preliminary consideration of the actions plan within ten working days from the date of its representation by the Organization.

In case of disagreement of authorized body with the actions plan provided by the Organization, the authorized body and the Organization carry out joint discussions for the purpose of completion of the actions plan. The organization adjusts the actions plan for elimination of notes of authorized body or in case of disagreement with such notes, represents the reasons.

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