RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of February 24, 2012 No. 76

About approval of Rules of forming of risk management systems and internal control for the accumulation pension funds and the organizations exercising investment control of pension assets

According to the Law of the Republic of Kazakhstan of December 28, 2011 "About modification and amendments in some 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 forming of risk management systems and internal control for the accumulation pension funds and the organizations exercising investment control of pension assets.

2. Recognize invalid regulatory legal acts of the Republic of Kazakhstan according to appendix to this resolution.

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

4. To the accumulation pension funds and the organizations exercising investment control of pension assets within three months from the date of enforcement of this resolution to bring the activities into accord with this resolution.

Approved by the Resolution of Board of National Bank of the Republic of Kazakhstan of February 24, 2012 No. 76

Rules of forming of risk management systems and internal control for the accumulation pension funds and the organizations exercising investment control of pension assets

1. General provisions

1. The board of directors and board of Fund (Organizations) provide compliance of risk management system and internal control to Rules and create conditions for execution by divisions and employees of Fund (Organizations) of the obligations assigned to them in the field of risk management and implementation of internal control.

2. In Rules the following concepts are used:

1) open foreign exchange position - excess of requirements (obligations) of Fund (Organizations) in currency of separate foreign state (group of foreign states) over obligations (requirements) of Fund (Organizations) in the same foreign currency;

2) price risk - the risk of emergence of expenses (losses) owing to change in value of financial instruments arising in case of change of conditions of the financial markets influencing market value of financial instruments;

3) reputation risk - risk of emergence of expenses (losses) owing to negative public opinion or decrease in trust to Fund (Organization);

4) bek-testing - methods of check of efficiency of procedures of risks measurement with use of historical data on Fonda (Organizations) and comparison of the calculated results with the current (actual) results from making of the specified transactions;

5) currency net position - difference between the cumulative amount of long positions of Fund (Organizations) for all foreign currencies and the cumulative amount of short positions on all foreign currencies;

6) currency risk - the risk of emergence of expenses (losses) connected with change of the foreign exchange rates when implementing of activities by Fund (Organization). Danger of expenses (losses) arises because of revaluation of line items on currencies in value term;

7) gap line item - difference between pension (own) quick assets and obligations of Fund (Organizations) for pension (own) quick assets depending on terms of their execution;

8) country (transfer) risk - risk of emergence of expenses (losses) owing to insolvency or unwillingness of foreign state or resident of foreign state to answer for obligations;

9) corporate management - the system of strategic and tactical management by the organization representing the complex of relations between the supreme body, governing body, executive body and other bodies of the organization aimed at providing effective functioning of the organization, protection of the rights and interests of its shareholders and giving to shareholders opportunity of effective control and monitoring of organization activity;

10) credit risk - risk of emergence of expenses (losses) owing to failure to pay by the issuer the principal debt and remuneration which is due to the investor in the time established by conditions of security issue including also risk of the losses arising in connection with failure to carry out by the partner of obligations in the swaps, options, forwards and other financial instruments subject to credit risk and during settlement of payment under these securities and financial instruments;

11) the counterpartner - the legal entity who is rendering services to Fund (Organizations) in the course of the conclusion of the transactions with financial instruments made at the expense of pension and (or) own assets of Fund (Organizations), having the license or permission granting the right to transactions with the financial instruments received according to the legislation of the state in the territory of which this legal entity is registered as the legal entity;

12) equity risk - risk on financial instruments with the market risk connected with change of market value of the financial instrument;

13) legal risk - risk of emergence of expenses (losses) owing to violation of requirements of the legislation of the Republic of Kazakhstan by Fund (Organization) or discrepancies of practice of Fund (Organizations) to their internal documents, and in the relations with nonresidents of the Republic of Kazakhstan - legislations of other states;

14) policy of investment of own assets - the document determining the list of investment objects, the purposes, strategy, conditions and restrictions of investing activities on own assets of Fund (Organizations), conditions of hedging and diversification of own assets;

15) management of conflict of interest - creation of mechanisms of non-admission of situations in case of which interests of the official or employee of Fund (Organizations) can affect objectivity and independence of adoption by them of decisions and fulfillment of duties, and also to conflict to their obligation to act for the benefit of investors (receivers) of Fund and (or) shareholders of Fund (Organizations);

16) market risk - risk of emergence of expenses (losses) connected with adverse situations in the financial markets. The market risk has the macroeconomic nature, that is sources of market risks are macroeconomic indicators of financial system;

17) operational risk - risk of emergence of expenses (losses) as a result of shortcomings or mistakes during implementation of internal processes made from employees, functioning of information systems and technologies, and also owing to external events, including the risks connected with:

uncertain and inefficient organizational structure of Fund (Organizations), including distribution of responsibility, structure of accountability and management;

inefficient strategy, politicians and (or) standards in information technologies, shortcomings of use of the software;

the untrue information or its inappropriate use;

poor control of personnel and (or) unskilled staff of Fund (Organizations);

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info