14.1. Table of acronyms and abbreviations

14.2. Definitions

absolute value of a number means the value of the number irrespective of sign. accounting standards include accounting rules, principles, practices and conventions. affiliate, of a party, means any entity of which the party holds 10% or more, but less than a majority, of the voting power.

Basel framework is the collective name for Basel I, Basel II and Basel III, which are a set of reform measures issued by the Basel Committee on Banking Supervision to improve the regulation, supervision, risk management and Capital adequacy of financial institutions.

branch means the local office in the AIFC of a legal person incorporated outside the AIFC.

business day means a day that is not a Saturday, a Sunday or a public or bank holiday in Kazakhstan.

Capital relief is the reduction, in the credit risk Capital requirement for an exposure, obtained from the use of a CRM technique.

counterparty means any person with or for whom an Islamic Bank conduct, or intends to

conduct, Islamic banking business or associated business.

credit risk Capital requirement means the amount of Capital that an Islamic Bank must have to cover its credit risk.

customer means a person to whom an Islamic Bank provides (or intends or wishes to provide, or has provided) a service or product and includes a business customer of an Islamic Bank (within the meaning given in COND):

exercise control: an entity (entity A) exercises control over another (entity B) if:

• (a) entity A holds 10% or more of the shares of entity B, or is entitled to exercise or control the exercise of 10% or more of the voting power in entity B;
• (b) entity A holds 10% or more of the shares in a parent entity of entity B or is entitled to exercise or control the exercise of 10% or more of the voting power in a parent entity of entity B; or
• (c) entity A is able to exercise significant influence over the management of entity B or a parent entity of entity B because of entity A’s shareholding or voting power, or by contractual or other arrangements. exposure means the maximum loss that an Islamic Bank might suffer as a result of the default or failure of a counterparty, connected counterparties, issuer or connected issuers.

External Credit Rating Agency (or ECRA) means:

• (a) Moody’s Investors Service;
• (b) Fitch Ratings;
• (c) Standard & Poor’s;
• (d) a rating agency that is affiliated with one of the agencies mentioned in paragraphs (a) to
• (c);
• (e) Islamic International Rating Agency, B.S.C; and
• (f) any other agency approved by the AFSA.

finance function has the same meanings as in CTRL. financial communication, by an Islamic Bank, means any communication (made through any medium including brochures, telephone calls and presentations) the purpose or effect of which is:

• (a) to promote or advertise an Islamic Bank’s services or products; or

(b) to invite or induce any person to enter into an agreement with any person in relation to those services or products.

governing body of an entity means its board of directors, committee of management or other governing body (whatever it is called). home jurisdiction, for an entity, means the jurisdiction where the entity’s authorisation or licence was granted internal audit function has the same meaning as in CTRL.

investment grade means a rating of at least BBB- or equivalent.

Islamic Bank means an Islamic Financial Institution that conducts Islamic Banking Business and has the authorisation to conduct business in a Shari’ah compliant manner .

Islamic Financial Institution means an authorised firm whose authorisation includes a condition that the whole of an Islamic Bank’s business must be conducted in accordance with Shari’ah.

jurisdiction means any kind of legal jurisdiction, and includes, for example:

• (a) Kazakhstan;

(b) a foreign country (whether or not an independent sovereign jurisdiction), or a state, province or other territory of such a foreign country; and

• (c) the AIFC or a similar jurisdiction.

legal person means an entity (other than an individual) on which the legal system of a

jurisdiction confers rights and imposes duties, and includes, for example, any entity that can

own, deal with or dispose of property.

12 named months of the year and ending:

• (a) at the end of the day before the corresponding day of the next named month; or
• (b) if there is no corresponding day—at the end of the last day of next named month.

operating entity means an entity set up to conduct business with customers with the intention of earning profits in its own right.

parent entity, for a legal person (A), means any of the following:

• (a) a legal person that holds a majority of the voting power in A;
• (b) a legal person that is a member of A (whether direct or indirect, or though legal or

beneficial entitlement) and alone, or together with 1 or more legal persons in the same corporate group, holds a majority of the voting power in A;

• (c) a parent entity of any legal person that is a parent entity of A.

person means:

• (a) an individual (including an individual occupying an office or position from time to time); or
• (b) a legal person. risk management function has the same meanings as in CTRL.

Rules means rules made by the AFSA, and includes:

• (a) any standard, principle or code of practice made by the AFSA; and
• (b) any other instrument made or in force under any Rules.

Shari’ah Supervisory Board, of an Islamic Bank, means the board appointed for the Islamic Bank under IFR Rules. subsidiary: a legal person (A) is a subsidiary of another legal person (B) if B is a parent entity of A. terms of business (of an Islamic Bank for a customer) means a statement or statements in writing of the terms on which an Islamic Bank will conduct business with or for the customer.