SCHEDULE 1: REGULATED ACTIVITIES
1. Dealing in Investments as Principal
Dealing in Investments as Principal means buying, selling, subscribing for or underwriting any Investment as principal.
2. Dealing in Investments as Agent
Dealing in Investments as Agent means buying, selling, subscribing for or underwriting any Investment as agent.
3. Managing Investments
Managing Investments means managing on a discretionary basis assets belonging to another Person where the assets include any Investment.
4. Managing a Collective Investment Scheme
(1) Managing a Collective Investment Scheme means establishing, managing or otherwise operating or winding up a Collective Investment Scheme.
(2) To the extent that any activity under (1) constitutes Managing Assets, Providing Fund Administration, Dealing as Agent, Dealing as Principal, Arranging Deals in Investments, Providing Custody, or, in relation to a Credit Fund, additionally constitutes Providing Credit, Advising on a Credit Facility or Arranging a Credit Facility, such a Regulated Activity is taken to be incorporated within Managing a Collective Investment Scheme.
5. Providing Custody
Providing Custody means one or more of the following activities:
(a) safeguarding and administering Investments belonging to another Person;
(b) in the case of a Fund, safeguarding and administering Fund Property; or
(c) safeguarding and administering Digital Assets belonging to another Person.
6. Arranging Custody
Arranging Custody means arranging for one or more Persons to carry on the Regulated Activity of Providing Custody.
7. Providing Trust Services
Providing Trust Services means:
(a) the provision of services with respect to the creation of an express trust;
(b) arranging for any Person to act as a trustee in respect of any express trust;
(c) acting as trustee in respect of an express trust; or
(d) acting as protector or enforcer in respect of an express trust.
8. Providing Fund Administration
Providing Fund Administration means providing one or more of the following services in relation to a Fund:
(a) processing dealing instructions including subscriptions, redemptions, stock transfers and arranging settlements;
(b) valuing of assets and performing net asset value calculations;
(c) maintaining the share register and Unitholder registration details;
(d) performing anti money laundering requirements;
(e) undertaking transaction monitoring and reconciliation functions;
(f) performing administrative activities in relation to banking, cash management, treasury and foreign exchange;
(g) producing financial statements, other than as the Fund’s registered auditor; or
(h) communicating with participants, the Fund, the Fund Manager, and investment managers, the prime brokers, the Regulators and any other parties in relation to the administration of the Fund.
9. Acting as the Trustee of a Fund
(1) Acting as the Trustee of a Fund means holding the assets of a Fund on trust for the Unitholders where the Fund is in the form of an Investment Trust.
(2) To the extent that any activity under (1) constitutes Providing Fund Administration or Providing Custody, such a Financial Service is taken to be incorporated within Acting as the Trustee of a Fund.
10. Advising on Investments
(1) Advising on Investments means giving advice to a Person in his capacity as an investor or potential investor, or in his capacity as agent for an investor or a potential investor, on the merits of his buying, selling, holding, subscribing for or underwriting a particular Investment (whether as principal or agent).
(2) In sub‐paragraph (1), "advice" includes a statement, opinion or report:
(a) where the intention is to influence a Person, in making a decision, to select a particular Investment or an interest in a particular Investment; or
(b) which could reasonably be regarded as being intended to have such an influence.
11. Arranging Deals in Investments
Arranging Deals in Investments means making arrangements with a view to another Person buying, selling, subscribing for or underwriting an Investment (whether that other Person is acting as principal or agent).
12. Managing a Restricted Profit Sharing Investment Account
Managing a Restricted Profit Sharing Investment Account means managing an account or portfolio which is a Restricted Profit Sharing Investment Account (RPSIA).
13. Islamic Banking Business
Islamic Banking Business means providing financing or making Investments by entering as principal or agent into any Islamic Financial Contract while raising funds for those activities through either or both of the following:
(a) raising, accepting and managing funds or money placements;
(b) managing Unrestricted Profit Sharing Investment Accounts (UPSIA);
provided that all such activities are carried out in a Shari’ah-compliant manner.
14. Providing Islamic Financing
Providing Islamic Financing means providing financing in a Shari’ah-compliant manner by entering into any Islamic Financial Contract.
15. Insurance Intermediation
(1) Insurance Intermediation means:
(a) advising on a Contract of Insurance;
(b) acting as agent for another Person in relation to the buying or selling of a Contract of Insurance for that other Person; or
(c) making arrangements with a view to another Person, whether as principal or agent, buying a Contract of Insurance.
(2) In (1)(a), ‘advising’ means giving advice to a Person in his capacity as a Policyholder, or in his capacity as agent for a Policyholder on the merits of his entering into a Contract of Insurance whether as principal or agent.
(3) In (2), ‘advice’ includes a statement, opinion or report:
(a) where the intention is to influence a Person, in making a decision, to select a Contract of Insurance or insurance cover; or
(b) which could reasonably be regarded as being intended to have such influence.
(4) The arrangements in (1)(c) include arrangements which do not bring about the transaction.
(5) The arrangements in (1)(c) do not include the mere provision of information about:
(a) a Contract of Insurance, insurer, insurance intermediary or insurance manager to a Policyholder; or
(b) a Policyholder to an insurer, insurance intermediary or insurance manager,
if the Person providing that information does not take any further steps to assist in concluding the Contract of Insurance.
16. Operating a Representative Office
(1) Operating a Representative Office means the marketing, from an establishment in the AIFC, of one or more financial services or investments which are offered in a jurisdiction other than the AIFC.
(2) For the purposes of this paragraph, "marketing" means:
(a) providing information on one or more investments or financial services;
(b) engaging in promotions in relation to such information provision; or
(c) making introductions or referrals in connection with the offer of financial services or investments;
provided that such activities do not constitute:
(d) advising on Investments; or
(e) receiving and transmitting orders in relation to an Investment.
(3) An Authorised Person which is authorised to Operate a Representative Office may not have a Licence to carry on any other Regulated Activity.
(4) An Authorised Person which does not have a Licence to Operate a Representative Office does not Operate a Representative Office if it undertakes any activities of the kind described in sub‐paragraph (2) that constitute marketing.
(5) Any communication which amounts to marketing in respect of a Financial Service or Investment, which is issued by or on behalf of a Government or non‐commercial governmental entity, does not constitute marketing for the purposes of sub‐paragraph (2).
17. Accepting Deposits
(1) Accepting Deposits means accepting money or funds received as a Deposit if that money or funds are:
(a) lent to other Persons; or
(b) used to finance wholly, or partly, any other activity of the Person accepting the Deposit.
(2) To the extent that any activity constitutes Opening and Operating Bank Accounts, such a Regulated Activity is taken to be incorporated within Accepting Deposits.
18. Providing Credit
(1) Providing Credit means providing a Credit Facility to another Person.
(2) A Person does not carry on the Regulated Activity of Providing Credit if the Credit Facility is to be provided by the Authorised Person in the course of carrying on one or more of the following activities:
(a) Dealing in Investments as Agent;
(b) Arranging Deals in Investments;
(c) Managing Investments;
(d) Managing a Collective Investment Scheme;
(e) Providing Custody.
19. Advising on a Credit Facility
(1) Advising on a Credit Facility means giving advice to a Person in his capacity as a borrower or a potential borrower, or as an agent for a borrower or a potential borrower, on the merits of his entering into a particular Credit Facility.
(2) In sub‐paragraph (1), "advice" includes a statement, opinion or report:
(a) where the intention is to influence a Person, in making a decision, to enter into a particular Credit Facility; or
(b) which could reasonably be regarded as being intended to have such an influence.
20. Arranging a Credit Facility
(1) Arranging a Credit Facility means making arrangements for the provision of a Credit Facility by one or more Persons.
(2) A Person does not carry on the Regulated Activity of Arranging a Credit Facility if
(a) he is to be a party to the Provision of Credit Facilities in question; or
(b) he merely provides the means by which a Person providing a Credit Facility communicates with the Person to whom the Credit Facility is or is to be provided.
(3) A Person does not carry on the Regulated Activity of Arranging a Credit Facility if it:
(a) is carried on in the course of Providing Legal Services or Providing Accountancy Services, which does not otherwise consist of the carrying on of Financial Services;
(b) may reasonably be regarded as a necessary part of any other services provided in the course of Providing Legal Services or Providing Accountancy Services; and
(c) is not remunerated separately from the other services.
21. Providing Money Services
(1) Providing Money Services includes, without limitation:
(a) providing currency exchange;
(b) Selling or Issuing Payment Instruments;
(c) issuing, redeeming (repaying) or Selling or issuing of Electronic Money;
(d) Execution of Payment Transactions, including transfers of Funds from and to a settlement account, including a Bank Account and a Payment Account, with the Client's Money Service Provider or with another Money Service Provider:
(i) execution of Direct Debits, including one-off Direct Debits;
(ii) execution of Payment Transactions through a payment card or a similar device;
(e) Execution of Payment Transactions where the Funds are covered by a credit line for a Money Service Client:
(i) execution of Direct Debits, including one-off Direct Debits;
(ii) execution of Payment Transactions through a payment card or a similar device;
(f) Money Remittance;
(g) Execution of Payment Transactions where the consent of the Payer to execute a Payment Transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting only as an intermediary between the Client and the supplier of the goods and services; and
(h) Account Information Services;
(2) [intentionally omitted].
Guidance: Providing Money Services
(1) Providing Money Services may include providing or operating a Payment Account. A Payment Account is an account that is used to execute Payment Transactions. A provider of such an account is prohibited from paying any interest or other return on Funds in the account in accordance with PMS 7.1. This is because paying interest or any other return on the account is likely to result in the account being a Deposit or a Profit Sharing Investment Account.
(2) Providing currency exchange services are provided in compliance with Rules on Currency Regulation and Provision of Information on Currency Transactions in the AIFC and may include arranging currency exchange.
(3) Money Services in 1 (d) may also include Acquiring of Payment Transactions, Payment Initiation Services and execution of Credit Transfers, including standing orders.
(4) A credit line in (1) (e) can only be provided if the Authorised Firm or the other person providing the credit line has the appropriate authorisation to carry out Regulated Activity of Providing Credit, or it is incidental to, and in connection with, a Financial Service referred to in paragraph 18 (1) GEN.
(5) An Authorised Firm Providing Money Services in relation to Digital Assets, issuing Fiat stablecoins must comply with DAA Chapter 4 (Rules applicable to Rules Applicable to Authorised Firms Providing Money Services in relation to Digital Assets and issuance of Fiat stablecoins) as well as with PMS, except for PMS 3.1. (Systems and controls), PMS 3.2. (Technology governance and risk management framework) and PMS 3.4. (Cyber-security policy).
21-1. Exclusions in respect of Providing Money Services
A Person does not carry on the Regulated Activity of Providing Money Services where:
(a) the Person provides Money Services in relation to the carrying on of another Regulated or Market Activity where providing Money Services is in connection with and a necessary part of that other Regulated or Market Activity;
(b) the Payment Transaction is executed between the Payer and the Payee through a commercial agent, duly authorised in an agreement to negotiate or conclude the sale or purchase of goods or services on behalf of either the Payer or the Payee, but not both the Payer and the Payee;
(c) the Money Services are provided by technical service providers that support the provision of Money Services, where the provider does not, at any time, take possession of the Funds to be transferred, excluding Payment Initiation Services or Account Information Services but including:
(i) payment gateway services;
(ii) the processing and storage of data;
(iii) trust and privacy protection services;
(iv) data and entity authentication;
(v) information technology;
(vi) communication network provision; and
(vii) the provision and maintenance of consumer-facing interfaces used to collect payment information, terminals and devices used for Money Services;
(d) the Payment Transaction is executed between Money Service Providers, or their agents or Branches, for their own account;
(e) the Payment Transaction is executed between Digital Asset Service Providers or Regulated Financial Institutions authorised to provide financial services with Digital Assets that involve consideration;
(f) the Payment Transaction and related services are conducted between a parent undertaking and its Subsidiary or between Subsidiaries of the same parent undertaking, provided no intermediary Money Service Provider is involved other than an undertaking belonging to the same Group;
(g) the Money Services are based on specific Payment Instruments that can be used only in a limited way and meet one of the following conditions —
(i) the Payment Instruments allow the holder to acquire goods or services only at the issuer’s premises;
(ii) the Payment Instruments are issued by a professional issuer and allow the holder to acquire goods or services only within a limited network of service providers which have direct commercial agreements with the issuer;
(h) the Payment Transaction is executed between Money Service Providers and legal entities that are non-residents of the Republic of Kazakhstan, in relation to Money Services to be provided by Money Service Providers;
(i) the Payment Transaction is executed among Digital Wallets or accounts of the same Client within a platform of a Digital Asset Service Provider, or among Digital Wallets or accounts of the same Client executed by a Digital Asset Service Provider to another Digital Asset Service Provider.
Guidance: Exclusions
(1) Paragraph (g) is intended to exclude monetary value issued by a merchant that is accepted only by the merchant itself, commonly known as a ‘closed loop’ system.
(2) Paragraph (e) is intended to encompass collaborations established between Digital Asset Service Providers to facilitate liquidity provision or to perform other operations related to Digital Asset transactions.
(3) Paragraph (h) is intended to cover collaborations established by a Money Service Provider with legal entities non-residents of the Republic of Kazakhstan, in relation to the cross-border Money Services. In such collaborations, the non-resident legal entities will provide the Money Services to Money Service Providers, and no direct or indirect Client relationship is established between the Money Service Provider's Clients and the non-resident legal entities.
(4) Paragraph (i) is intended to include following types of transactions:
(a) For example, where Client A transfers Digital Assets from the deposit wallet to the trading or derivative wallet of Client A within the platform of the same Digital Asset Service Provider; and/or
(b) For example, where Client A transfers Digital Assets from their account on platform of one Digital Asset Service Provider to their account on the platform of another Digital Asset Service Provider or a foreign digital asset service provider.
22. Effecting Contracts of Insurance
Effecting Contracts of Insurance means effecting Contracts of Insurance as Principal.
23. Carrying on Contracts of Insurance
Carrying on Contracts of Insurance means carrying on Contracts of Insurance as Principal.
24. Insurance Management
(1) Insurance Management means:
(a) performing underwriting or administration functions for or on behalf of an insurer or Captive, for the purposes of that insurer effecting or carrying out a Contract of Insurance as principal; or
(b) arranging reinsurance for and on behalf of an insurer or Captive for whom it is underwriting;
(a) performing underwriting or administration functions for or on behalf of a Takaful Operator or a Captive Takaful Operator, for the purposes of that Takaful Operator effecting or carrying out a Takaful Contract as principal; or
(b) arranging Retakaful for and on behalf of a Takaful Operator or Captive for whom it is underwriting.
(2) In (1):
(a) “administration” includes, without limitation, one or more of the following activities:
(i) processing applications for, and endorsements on, Contracts of Insurance;
(ii) collecting and processing premiums or Takaful contributions;
(iii) negotiating terms of settlement of claims; or
(iv) settling claims; and
(b) “underwriting” includes, without limitation, one or more of the following activities:
(i) assessing underwriting risks;
(ii) negotiating and settling terms of Contracts of Insurance or terms of Takaful Contracts, including exclusions;
(iii) negotiating and settling premiums or Takaful contributions;
(iv) negotiating commissions; or
(v) countersigning, stamping and issuing Contracts of Insurance or Takaful Contracts.
(3) In this Rule, a reference to an “insurer” is a reference to:
(a) an Insurer; or
(b) a Non-AIFC insurer.
(4) In this Rule, a reference to a “Takaful Operator” is a reference to:
(a) a Takaful Operator; or
(b) a Non-AIFC Takaful Operator.
25. Takaful Business
Takaful Business means the business of conducting either or both of the following activities:
(a) effecting Takaful Contracts as Principal;
(b) carrying on Takaful Contracts as Principal.
26. Opening and Operating Bank Accounts
Opening and Operating Bank Accounts means one or more of the following activities:
(a) Opening and operating Bank Accounts;
(b) Services enabling funds to be placed on a Bank Account as well as all the
operations required for operating a bank account; and
(c) Services enabling funds withdrawals from a Bank Account as well as all the operations required for operating a Bank Account.
27. Operation of a Payment System
Operation of a Payment System means operation of funds transfer system with formal and standardised arrangements and common rules for the processing, clearing and/or settlement of payment transactions.
28. Operating a Multilateral Trading Facility
Operating a Multilateral Trading Facility or ‘MTF’, where MTF means a system which brings together multiple third parties buying and selling Investments, rights or interests in Investments, in accordance with its non-discretionary rules, in a way that results in a contract in respect of such Investments.
29. Operating an Organised Trading Facility
Operating an Organised Trading Facility or ‘OTF’, where OTF means a system which brings together multiple third parties buying and selling Investments, rights or interests in Investments, in accordance with its discretionary rules, in a way that results in a contract in respect of such Investments.
30. Operating a Digital Asset Trading Facility
Operating a Digital Asset Trading Facility means operating a facility which functions regularly and brings together multiple parties (whether as principal or agent) with a view to the entering into of contracts:
(a) to buy, sell or exchange Digital Assets for a Fiat currency; or
(aa) to buy or sell interests in Digital Asset Derivatives; or
(b) to exchange one Digital Asset for another Digital Asset, in its Facility, in accordance with its non-discretionary rules; or
(c) to buy, sell or exchange Digital Assets for a commodity.
31. Providing Credit Rating Services
Providing Credit Rating Services means:
(a) analysis or evaluation of information carried on with a view to issuing or reviewing a Credit Rating; or
(b) issuing or reviewing a Credit Rating.