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RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of February 3, 2014 No. 9

About approval of Rules of implementation of broker and (or) dealer activities in the security market, procedure for carrying out by the broker and (or) dealer of banking activities

(as amended on 24-09-2021)

According to the Law of the Republic of Kazakhstan of July 2, 2003 "About the security market" the Board of National Bank of the Republic of Kazakhstan DECIDES:

1. Approve Rules of implementation of broker and (or) dealer activities in the security market, procedure for carrying out by the broker and (or) dealer of banking activities.

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.

Chairman of National Bank

K. Kelimbetov

Approved by the Resolution of Board of National Bank of the Republic of Kazakhstan of February 3, 2014 No. 9

Rules of implementation of broker and (or) dealer activities in the security market, procedure for carrying out by the broker and (or) dealer of banking activities

These rules of implementation of broker and (or) dealer activities in the security market, procedure for carrying out by the broker and (or) dealer of banking activities (further - Rules) are developed according to the Civil code of the Republic of Kazakhstan (Special part) of July 1, 1999, the laws of the Republic of Kazakhstan of July 2, 2003 "About the security market" (further - the Law on the security market), of July 4, 2003 "About state regulation, control and supervision of the financial market and the financial organizations" and establish conditions and procedure of broker and (or) dealer activities in the security market in the Republic of Kazakhstan (further - broker and (or) dealer activities), and also procedure for carrying out by the broker and (or) dealer of banking activities in the Republic of Kazakhstan.

Chapter 1. General provisions

1. In part which is not settled by regulatory legal acts of the Republic of Kazakhstan broker and (or) dealer activities are performed according to internal documents of the broker and (or) dealer, prisoners between the broker and (or) the dealer and his clients agreements on rendering broker services and customs (including business customs).

1-1. In part which is not settled by Rules the broker and (or) the dealer having the corresponding license for implementation of separate types of banking activities performs separate types of banking activities according to the bank law of the Republic of Kazakhstan, the legislation of the Republic of Kazakhstan on currency control and currency exchange control, payments and payment systems.

2. Action of Rules extends on:

1) the banks, branches of nonresident banks of the Republic of Kazakhstan which are brokers and (or) dealers in the part which is not contradicting the legislation of the Republic of Kazakhstan regulating banking activity, except for National Bank of the Republic of Kazakhstan;

2) the organizations performing activities for management of investment portfolio, the Voluntary accumulation pension funds which are brokers and (or) dealers in the part which is not contradicting the legislation of the Republic of Kazakhstan on provision of pensions;

3) the managing companies of investment funds which are brokers and (or) dealers in the part which is not contradicting the legislation of the Republic of Kazakhstan on investment and venture funds.

3. The broker and (or) the dealer has the license for implementation of broker and (or) dealer activities:

1) the first category - with the right of account management of clients as the nominee holder (with the right of registration of security transactions);

2) the second category - without the right of account management of clients (without the right of registration of security transactions).

4. In Rules the broker and (or) the dealer having the license of the first category hereinafter is referred to as as the broker and (or) the dealer of the first category, the license of the second category as the broker and (or) the dealer of the second category.

5. For the purposes of Rules in addition to rating estimates of the Standard & Poor agency "s authorized body on regulation, control and supervision of the financial market and the financial organizations (further - authorized body) are also recognized rating estimates of the Moody agencies" to s Investors Service and Fitch, and their affiliated rating organizations (further - other rating agencies).

6. The broker and (or) the dealer books audit of the annual financial reporting.

When carrying out audit the broker and (or) the dealer provides all necessary documentation (materials) requested by auditing organization.

7. The broker and (or) the dealer records affiliates according to the procedure, established by internal documents of the broker and (or) dealer.

8. Internal documents of the broker and (or) dealer establish responsibility of the workers of the broker and (or) dealer having access (using passwords) for login of exchange of electronic documents of Central Securities Depository, the stock exchange, the clearing organization and (or) the settlement organization performing the organization of calculations (payments) for transactions with financial instruments (further - the settlement organization), and (or) the foreign settlement organization.

For the purposes of Rules as the foreign settlement organization it is understood:

the nonresident bank of the Republic of Kazakhstan having long-term credit rating evaluation not below "VVV-" on the international scale of the Standard & Poor agency "s (Standard and Purs) or rating assessment of similar level of the Moody agencies" s Investors Service (Mudis Investors Service), or Fitch (Features);

the nonresident bank of the Republic of Kazakhstan which is subsidiary bank which parent nonresident bank has long-term credit rating evaluation not below "And -" on the international scale of the Standard & Poor agency "s (Standard and Purs) or rating assessment of similar level of the Moody agencies" s Investors Service (Mudis Investors Service) or Fitch (Features);

the organization having the status of the central depositary which foreign supervision body of country of source, signed the Multilateral memorandum of understanding concerning consultations, cooperation and exchange of information of International Organization of Securities Commissions;

the foreign organization which is performing functions, stipulated in Item 1 article 59 of the Law on the security market, having long-term credit rating evaluation not below VVV on the international scale of the Standard & Poor agency "s (Standard and Purs) or rating assessment of similar level of the Moody agencies" s Investors Service (Mudis Investors Service) or Fitch (Features);

the foreign organization performing according to the legislation of the country in which it is registered as the legal entity, function, stipulated in Item 1 article 59 of the Law on the security market corresponding to the following conditions:

has the license (permission) to implementation of activities in the security market granted (issued) authorized body performing functions on regulation, control and (or) supervision of the security market in country of source of this legal entity (further - foreign supervision body);

the foreign supervision body of country of source of this legal entity, signed the Multilateral memorandum of understanding concerning consultations, cooperation and exchange of information of International Organization of Securities Commissions;

is the legal entity registered in the country having rating assessment not below "And -" on the international scale of the Standard & Poor agency "s (Standard and Purs) or rating assessment of similar level of the Moody agencies" s Investors Service (Mudis Investors Service) either Fitch (Features), or having membership in one or in several international financial associations: International association of the capital markets (ICMA), International association of professionals of the currency and cash markets (ACI the Financial Markets Association), Association of the financial markets of AFME.

9.  No. 25 is excluded according to the Resolution of Board of National Bank of the Republic of Kazakhstan of 28.01.2016

10.  No. 25 is excluded according to the Resolution of Board of National Bank of the Republic of Kazakhstan of 28.01.2016

Chapter 2. Organizational structure and qualification of workers of the broker and (or) dealer

11. The organizational structure of the broker and (or) dealer with the right of account management of clients as the nominee holder includes the following structural divisions:

1) the trade division performing the conclusion of transactions with financial instruments (further - trade division);

2) the settlement division performing execution of transactions with financial instruments, accounting of financial instruments and money of this broker and (or) dealer and his clients (further - back office);

3) other structural divisions determined according to internal documents of the broker and (or) dealer with the right of account management of clients as the nominee holder.

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