2.2.1.1. General description

Dealing in Investments as Principal is listed in section 1 of Schedule 1 of GEN.  The activity consists of:

(a)   buying;

(b)   selling;

(c)   subscribing for; or

(d)   underwriting

any Investment as principal.

The definition of Investment in Glossary includes the following: A Security, Unit, Derivative or a Digital Asset and a right or interest in the relevant Security, Unit, Derivative, Digital Asset or Environmental Instrument.

In order to be covered by the description, the principal must hold itself out as willing, as principal, to:

(a)   buy, sell, or subscribe for Investments at prices determined by the principal generally and continuously rather than in respect of each particular transaction;

(b)   engage in the business of buying Investments with a view to selling them;

(c)   engage in the business of underwriting Investments; or

(d)   regularly solicit members of the public with the purpose of inducing them, as principals or agents, to enter into a transaction.

An Authorised Firm authorised to carry on the regulated activity of Dealing in Investments as Principal is subject to prudential supervision and must comply with AIFC Prudential Rules for Investment Firms, as well as AIFC Banking Business Prudential Rules and Banking Prudential Guideline if applicable to a PRU Dealing Investment Firm.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.1.2. Exclusions

There are several exclusions for this activity:  

(1)     A Person does not Deal in Investments as Principal merely by accepting an instrument, creating or acknowledging indebtedness in respect of any loan, credit, guarantee or other similar financial accommodation which that Person has made or provided.

(2)     When a Person issues or redeems Securities issued by that Person it does not fall into this category as well.

(3)     When a Person (not an Authorised Firm or an Authorised Market Institution) enters into a transaction with or through an Authorised Firm or a Regulated Financial Institution (meaning a Person authorised in other jurisdiction by another Financial Services Regulator).

The exclusion in (3) does not apply if the Person holds itself out as:

(a)     willing to enter into transactions in Investments of the kind to which the transaction relates; or

(b)     engaging in the business of buying, selling, subscribing for or underwriting Investments.

A Person may hold itself out as carrying on an activity by various means including, for example, on its webpage, in an advertisement or through representations made by its employees. However, merely placing orders for a person’s own account with a broker or on a market will not amount to holding out unless it offers to do so on behalf of other persons.

A Person who is an Authorised Firm, does not Deal in Investments as Principal if in the course of managing the assets of a Private Equity Fund:

(a)     the Person makes an initial subscription for Units of that Fund; and

(b)     the Units are held by that Person for a period of more than 12 months.

When a Person Deals in Investments for their own account, this will also be excluded from the scope of the Regulated Activity.

The additional condition for being considered a Regulated Activity is that a Person must hold themself out as making a market in the relevant specified Investments or as being in the business of Dealing in Investments, or they must regularly solicit members of the public with the purpose of inducing them to deal.

2.2.2.1. General description

Dealing in Investments as Agent is listed in section 2 of Schedule 1 of GEN. The activity consists of:

(a)    buying;

(b)    selling;

(c)     subscribing for; or

(d)    underwriting

any Investment as agent (i.e. for and on behalf of another person or group).

An Authorised Firm authorised to carry on the regulated activity of Dealing in Investments as Agent is subject to prudential supervision and must comply with AIFC Prudential Rules for Investment Firms, as well as AIFC Banking Business Prudential Rules and Banking Prudential Guideline if applicable to a PRU Dealing Investment Firm.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.2.2. Exclusions

A Person does not Deal in Investments as Agent if the activity:

(a)     is carried on in the course of providing legal or accountancy services which do 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 or accountancy services; and

(c)     is not remunerated separately from the other services.

A Person does not Deal in Investments as Agent if that Person:

(a)     is merely receiving and transmitting a Client order in respect of an Investment; and

(b)     does not execute the Client order for and on behalf of the Client or otherwise commit the Client to the transaction relating to the relevant Investment.

However, this may nevertheless amount to Arranging Deals in Investment.

An exchange does not Deal in Investments as Agent merely by taking action in accordance with its Default Rules.

2.2.3.1. General description

Managing Investments is listed in section 3 of Schedule 1 of GEN. It means managing on a discretionary basis the buying and selling of investment instruments belonging to another Person.

An Authorised Firm authorised to carry on the regulated activity of Managing Investments is subject to prudential supervision and must comply with AIFC Prudential Rules for Investment Firms.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.3.2. Exclusions

A Person who is not an Authorised Firm or an Authorised Market Institution does not Manage Investments if all day-to-day decisions relating to the Investments which are included in those assets are taken by an Authorised Firm or a Regulated Financial Institution.

2.2.4.1. General description

Managing a Collective Investment Scheme is listed in section 4 of Schedule 1 of GEN. It means:

(a)     establishing;

(b)     managing; or

(c)     otherwise operating; or

(d)     winding up

a Collective Investment Scheme.

In case any activity as indicated above constitutes Managing Assets, Providing Fund Administration, Dealing as Agent, Dealing as Principal, Arranging Deals in Investments, or Providing Custody, such a Regulated Activity is taken to be incorporated within Managing a Collective Investment Scheme.

An Authorised Firm authorised to carry on the regulated activity of Managing a Collective Investment Scheme is subject to prudential supervision and must comply with AIFC Prudential Rules for Investment Firms.

A Collective Investment Scheme may only be established, promoted or marketed in the AIFC by a Person who is:

(a)     a Domestic Fund Manager;

(b)     a Foreign Fund Manager; or

(c)     another Centre Participant.

Foreign Fund Managers

A Foreign Fund Manager may manage a Domestic Fund in accordance with the AIFC Collective Investment Scheme Rules and Acting Law of the AIFC.

Domestic Fund Managers

Domestic Fund Manager may manage a Fund in other jurisdictions subject to the rules and regulations of that jurisdiction, AIFC Collective Investment Scheme Rules and Acting Law of the AIFC.

However, each foreign jurisdiction needs to be assessed first to ensure there is an adequate level of equivalence, and typically reciprocal arrangements would be expected to be in place.

For more information on fund management activity see Guidance for Fund Management Activity and Funds in the AIFC.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

2.2.4.2. Exclusions

Arrangements not amounting to a Collective Investment Scheme are specified in section 3 of the AIFC Collective Investment Scheme Rules.

For requirements applicable to Foreign Fund Managers, i.e. Fund Managers not located in the AIFC see AIFC Collective Investment Scheme Rules.

Specific products or activities forming part of Islamic Financial Business are not regulated as Collective Investment Schemes due to their unique characteristics and the specific regulations applied to them.

Such Islamic Financial Business activities are expressly excluded from the remit of the AIFC Collective Investment Scheme Rules but may be considered as Islamic Investment Funds.  

For applicable requirements to Islamic Investment Funds see AIFC Islamic Finance Rules.

2.2.5.1. General description

Providing Custody is listed in section 5 of Schedule 1 of GEN. It means safeguarding and administering Investments (Fund Property, Digital Assets) belonging to another Person.

Safeguarding and administering Investments consists of both of the following:

(a)     safeguarding of assets belonging to another, and

(b)     the administration of those assets.

Administering an Investment would include, for example, crediting income arising out of an Investment to the beneficiary's account; however, it is important that discretion is not exercised in the carrying out of the activities, otherwise the actions will fall within another regulated activity (that of Advising on Investments, or Managing Investments), and separate permission will be required.

Safeguarding an Investment is holding it in safe custody, e.g. looking after a share certificate.

Providing Custody differs from that of Arranging Custody because:

(a)     a Person Providing Custody is legally accountable to Clients for safeguarding and administering Client Investments; and

(b)     a Person arranging Custody does not become a party to the arrangement to Provide Custody and hence does not assume any duties or responsibilities to the Client for the safe custody of the Client’s Investments – instead, such a Person merely facilitates a custodian to provide its services to a potential user of its services.

An Authorised Firm authorised to carry on the regulated activity of Providing Custody is subject to prudential supervision and must comply with AIFC Prudential Rules for Investment Firms.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.5.2. Exclusions

There are a number of exclusions applicable in certain circumstances:

(a)     while acting as personal representative;

(b)     in connection with the carrying on of a profession of a non-investment business;

(c)     in connection with the sale of goods or supply of services;

(d)     where they belong to a group member or participator in a joint enterprise;

(e)     in connection with an employee share scheme;

(f)       that involve the provision of information to policyholders or potential policyholders about contracts of insurance on an incidental basis; or

(g)     where they are acting as an insolvency practitioner.

2.2.6.1. General description

Arranging Custody is listed in section 6 of Schedule 1 of GEN and means arranging provision of custody for one or more Persons.

For the difference between Providing Custody and Arranging Custody refer to item 2.2.5.1.

The type of activities that constitute Arranging Custody include:

(a)     negotiating and settling terms of the contract between the custody provider and the person who is obtaining that service (the Client);

(b)     assisting the Client to complete application forms and other processes;

(c)     collecting and processing the Client’s payments; and

(d)     transmitting information (including instructions from the Client and confirmations by the custody provider) between the Customer and the custody  provider.

The Client Asset provisions only apply to firms holding or controlling Client Assets and to firms Providing Custody.

As a firm Arranging Custody does not “safeguard and administer Investments”, the Client Asset provisions in COB section 8 have only limited application to such a firm (see COB Rule 8.1.5.).

A firm “Arranging Custody”, although not subject to substantive Client Asset provisions (because it does not hold or control Client Assets), is still required to undertake due diligence on a non-AIFC custodian with whom it arranges for its Client to obtain custody services.

An Authorised Firm authorised to carry on the regulated activity of Arranging Custody is subject to prudential supervision and must comply with AIFC Prudential Rules for Investment Firms.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.6.2. Exclusions

A Person (an “introducer”) does not carry on the activity of Arranging Custody merely by introducing another Person to a custodian who is an Authorised Firm or a Regulated Financial Institution authorised to provide custody.

This exclusion does not apply if:

(a)     the custodian is a member of the same Group as the introducer;

(b)     the custodian is a part of the same legal entity as the introducer and, conducts custody services outside the AIFC; or

(c)     the introducer is remunerated for making the introduction by any Person, including by an entity referred to in (a) or (b).

An exchange does not Arrange Custody merely by making arrangements for, or taking steps that facilitate:

(a)     the safeguarding and administration of assets belonging to Members or other participants; or

(b)     the settlement by another Person of transactions entered into on a facility operated by the exchange.

2.2.7.1. General description

Providing Trust Services is listed in section 6 of Schedule 1 of GEN and 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.

Definition of an express trust is provided in the AIFC Trust Regulations and mean a trust created with the Settlor’s express intent declared in writing or a written declaration of trust by the trustee.

A Person who is a Trustee does not carry on Dealing in Investments as Principal, Managing Investments and Providing Custody in circumstances where it is acting as a trustee.

An Authorised Firm authorised to carry on the regulated activity of Providing Trust Services is subject to prudential supervision and must comply with AIFC Prudential Rules for Investment Firms.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.7.2. Exclusions

Providing generic advice on the desirability of using a trust does not amount to Providing Trust Services.

A Person does not carry on Providing Trust Services by way of business where it is:

(a)     acting as enforcer or protector; or

(b)     where it is arranging for a Person to act as trustee,

in respect of less than three (3) trusts.

A law firm, notary firm, or other independent legal business or an accounting firm, audit firm, or insolvency firm does not provide Trust Services where it only:

(a)     arranges for a Person to act as trustee in respect of an express trust; or

(b)     provides services with respect to the creation of an express trust; provided that:

                       (i)         the provision of such services is solely incidental to the practice of law or accounting as the case may be; and

                      (ii)         the DNFBP is not holding itself out as Providing Trust Services.

Acting as trustee, protector or enforcer are not activities incidental to the practice of law or accounting and require a Licence.

2.2.8.1. General description

Providing Fund Administration is listed in section 8 of Schedule 1 of GEN. It means providing one or more of the following services in relation to a Fund (i.e. a Collective Investment Scheme):

(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.

An Authorised Firm authorised to carry on the regulated activity of Providing Fund Administration is subject to prudential supervision and must comply with AIFC Prudential Rules for Investment Firms.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.8.2. Exclusions

There are none.

2.2.9.1. General description

Acting as the Trustee of a Fund is listed in section 9 of Schedule 1 of GEN. It means holding the assets of a Fund on trust for the Unitholders where the Fund is in the form of an Investment Trust.   

To the extent that any activity indicated above constitutes Providing Fund Administration or Providing Custody, such a Financial Service is taken to be incorporated within Acting as the Trustee of a Fund.

A Trustee is not required to obtain additional authorisations for certain activities involving offering Financial Services that fall within the ordinary scope of the activity of Acting as the Trustee of a Fund.

An Authorised Firm authorised to carry on the regulated activity of Acting as a Trustee of a Fund is subject to prudential supervision and must comply with AIFC Prudential Rules for Investment Firms.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.9.2. Exclusions

A Person is not Acting as the Trustee of a Fund merely because it is acting as an agent, employee or delegate of a Trustee.

2.2.10.1. General description

Advising on Investments is listed in section 10 of Schedule 1 of GEN.  It means giving advice to a Person:

(a)     in the capacity as an investor or potential investor; or

(b)     in the capacity as agent for an investor or a potential investor,

on the merits of his (i) buying, (ii) selling, (iii) holding, (iv) subscribing for or (v) underwriting a particular Investment (whether as principal or agent).

“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.

An Authorised Firm authorised to carry on the regulated activity of Advising on Investments is subject to prudential supervision and must comply with AIFC Prudential Rules for Investment Firms.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.10.2. Exclusions

There are none.

2.2.11.1. General description

Arranging Deals in Investments is listed in section 11 of Schedule 1 of GEN. It means making arrangements with a view to another Person (i) buying, (ii) selling, (iii) subscribing for or (iv) underwriting an Investment (whether that other Person is acting as principal or agent).

The above definition is also wider in cases where the arrangements would not bring about a particular transactions. For example, where the involvement in a chain of events leading to a transaction is of enough importance that without that involvement it would not take place.

The activities which constitute Arranging Deals in Investments generally involve the following elements:

(a)     the purpose of such an arrangement is to ‘facilitate’ or ‘bring about’ transactions between other parties such as:

                       (i)         buyers and sellers of Investments;

                      (ii)         issuers of and subscribers for Securities (note – subscription is generally an activity associated with an initial offer of Securities);

                    (iii)         issuers and underwriters of securities (note – underwriting here is an activity associated with an initial offer of Securities, as opposed to underwriting of risks, which is an activity of an insurer); and

                    (iv)         insurers writing Long-Term Insurance and policyholders who wish to obtain such insurance.

(b)     such arrangements can be either of an on-going nature, for example, an arrangement which is available to potential buyers or sellers of Investments, or an arrangement which is bespoke (i.e. available on a one-off basis for a particular client, such as an underwriter of Securities).

The activities referred to above can include one or more of the following:

(a)     the introduction of:

                       (i)         potential buyers of Investments to issuers or sellers of Investments, or vice versa;

                      (ii)         potential subscribers for Securities to issuers;

                    (iii)         potential underwriters to issuers of Securities, or vice–versa;

                    (iv)         potential parties to a derivatives transaction; and

                     (v)         policyholders or cedants to insurers or reinsurers underwriting Long-Term Insurance;

(b)     assisting any of the parties referred to in (a) through activities, such as, completing the applications or other processes relevant to the transaction;

(c)     negotiating and settling terms of the contracts between the parties referred to in (a);

(d)     collecting and processing fees, commissions or other payments (such as premiums in the case of Long-Term Insurance); and

(e)     transmitting instructions or confirmations relating to transactions.

An arrangement which is part of a wider arrangement for the purpose of bringing about transactions in Investments still falls within the scope of Arranging Deals in Investments. For example, an arranger may arrange (i.e. allow access) for potential investors to access a facility set up by an offeror of Securities. The arrangement to allow access constitutes arranging, although, for a transaction to be concluded, the investor will also need to use the offeror’s facility.

‘Arranging Deals in Investments’ differs from ‘Dealing in Investments as Agent’ because:

(a)     a Person ‘arranging deals’ (i.e. the ‘arranger’) does not have the authority to bind the parties to an Investment transaction resulting from its ‘arranging’ activities; and

(b)     a Person ‘dealing as agent’ acts as the agent of a party to the Investment transaction and has the authority to bind its principal.

For example, a Person acting as an agent either:

(a)     executes the transaction for its principal (the Client); or

(b)     if using another broker to execute the client order, commits the Client to the transaction by giving a binding order to the broker.

In contrast, a Person acting as an arranger may, for example, receive and transmit client orders to a broker, but does not have the power to execute or enter into the transaction for the client, or commit the client to a transaction.

An activity falls within the scope of the service of ‘arranging’ even if it does not necessarily lead to a completed transaction.

For example, a prospective buyer or seller of Securities may change his mind and not sign a contract for the sale or purchase of Securities. Similarly, a potential buyer of Long-Term Insurance, after having completed an application form for Long-Term Insurance with the assistance of an arranger, may not go ahead with the purchase of the policy. In both examples, just because the transaction has not been concluded, the arranger’s activities do not cease to be ‘arranging’.

An Authorised Firm authorised to carry on the regulated activity of Arranging Deals in Investments is subject to prudential supervision and must comply with AIFC Prudential Rules for Investment Firms.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.11.2. Exclusions

Unless stated otherwise, the following specific exclusions apply to both arranging (bringing about) deals in Investments and making arrangements with a view to deals in Investments:

(1)   where a Person merely enables parties to communicate, the Person does not make arrangements with a view under section 11 of Schedule 1 of GEN - this is likely to apply mainly to Persons such as internet service providers, broadcasters or publishers if all they do is provide communication facilities. The word “merely” is crucial so that where a publisher, broadcaster or Internet service provider goes beyond what is necessary for them to provide a service of publishing, broadcasting or otherwise facilitating the issue of promotions, it may well bring them within the scope of section 11 of Schedule 1 of GEN.

(2)   where a Person is arranging a transaction to which they are a party.

(3)   arranging transactions connected to lending on the security of insurance contracts (but only where a Person is not carrying on insurance mediation or reinsurance mediation) (for further information on exclusions relating to insurance related activities, see relevant sections of PERG).

(4)   arranging for Debentures to be accepted in connection with the making of loans.

(5)   where a transaction for the sale or purchase of a contract of insurance consists of the mere provision of information about a potential policyholder to a relevant insurer or an insurance or reinsurance intermediary, or consists of the provision of information to a potential policyholder about a contract of insurance, or a relevant insurer or insurance or reinsurance intermediary. This exclusion is only available if the provider of the information does not take any step other than the provision of information to assist in the conclusion of a contract of insurance.

(6)   arrangements made by a firm for the issue of its own shares or share warrants or person issuing their own Debentures or Debenture warrants.

A Person who performs for a financial service provider (in or outside the AIFC) delegated or outsourced functions, such as back office administration services, does not carry on ‘arranging’ activities. For example, a Person undertaking administrative tasks (such as processing applications, transmitting orders, or issuing confirmations of transactions for a brokerage firm or an insurer) is not arranging transactions.

A passive display of literature which advertises Investments does not amount to arranging, unless something more is done to help potential investors or policyholders to buy such Investments or policies.

For example, a passive display of leaflets advertising Investments in property funds at the reception of an office, such as an accountant’s office, or a display of leaflets advertising permanent health policies of a Long-Term Insurance insurer at a doctor’s or dentist’s waiting rooms, would not constitute arranging, provided the relevant service providers or employees in their offices do not assist or facilitate transactions by potential investors/policyholders.

2.2.12.1. General description

Managing a Restricted Profit Sharing Investment Account is listed in section 12 of Schedule 1 of GEN. It means managing an account or portfolio which is a Restricted Profit Sharing Investment Account (RPSIA).

More detailed information about Restricted Profit Sharing Investment Account can be found in the AIFC Islamic Finance Rules and AIFC Islamic Banking Business Prudential Rules.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.12.2. Exclusions

There are none.

2.2.13.1. General description

Islamic Banking Business is listed in section 13 of Schedule 1 of GEN. It 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.

The definition of an Islamic Financial Contract can be found in the AIFC Islamic Finance Rules and may include any of the following:

                       (i)         murabahah and its variations;

                      (ii)         salam and its variations;

                    (iii)         tawarruq and its variations;

                    (iv)         istisna and its variations;

                     (v)         ijarah and its variations;

                    (vi)         musharakah and its variations;

                   (vii)         mudarabah and its variations;

                  (viii)         qard;

                    (ix)         any other Islamic Financial Contract that is approved to be so by the relevant Authorised Firm’s Shari’ah Supervisory Board.

For more details on Islamic Banking Business see AIFC Islamic Banking Business Prudential Rules.

Currency regulation

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.13.2. Exclusions

There are none.

2.2.14.1. General description

Providing Islamic Financing is listed in section 14 of Schedule 1 of GEN. It means providing financing in a Shari’ah-compliant manner by entering into any Islamic Financial Contract.

The definition of an Islamic Financial Contract can be found in the AIFC Islamic Finance Rules.

For more details on Providing Islamic Financing see AIFC Islamic Banking Business Prudential Rules.

Currency regulation

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.14.2. Exclusions

There are none.

2.2.15.1. General description

Insurance Intermediation is listed in section 15 of Schedule 1 of GEN. It 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.

For further details about “advising” and “arrangements” see section 15 of GEN.

A Contract of Insurance is any enforceable contract under which a “provider” undertakes:

(1)     in consideration of one or more payments;

(2)     to pay money or provide a corresponding benefit (including in some cases services to be paid for by the provider) to a ‘recipient’;

(3)     in response to a defined event the occurrence of which is uncertain (either as to when it will occur or as to whether it will occur at all) and adverse to the interests of the recipient.

An Authorised Firm authorised to carry on the regulated activity of Insurance Intermediation is subject to prudential supervision and must comply with AIFC Prudential Rules for Insurance Intermediaries and Insurance Managers.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.15.2. Exclusions

There are none.

2.2.16.1. General description

Operating a Representative Office is listed in section 16 of Schedule 1 of GEN. It 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.

For further details see GEN and AIFC Representative Office Rules.

Currency regulation

Subject to the general currency regulation legislation of the Republic of Kazakhstan. 

2.2.16.2. Exclusions

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 the general description. This does not include activity of a broker that is marketing or selling Government bonds to its Clients.

2.2.17.1. General description

Accepting Deposits is listed in section 17 of Schedule 1 of GEN.

A Firm is accepting deposits if money or funds received as a Deposit:

(a)     is lent to other Persons, or

(b)     used to finance wholly, or partly, any other activity of the Person accepting the Deposit.

To the extent that any activity constitutes Opening and Operating Bank Accounts such a Regulated Activity is taken to be incorporated within Accepting Deposits.

A Deposit is a sum of money paid on terms:

(a)     under which it will be repaid, with or without interest or a premium, and either on demand or at a time or in circumstances agreed by or on behalf of the Person making the payment and the Person receiving it; and

(b)     which is not relevant to the provision of property (other than currency) or services or the giving of security.

Money is paid on terms which are relevant to the provision of property or services or the giving of security if:

(a)     it is paid by way of advance or part payment under a contract for the sale, hire or other provision of property or services, and is repayable only in the event that the property or services are not in fact sold, hired or otherwise provided;

(b)     it is paid by way of security for the performance of a contract or by way of security in respect of loss which may result from the non-performance of a contract; or

(c)     without prejudice to (b), it is paid by way of security for the delivery of property, whether in a particular state of repair or otherwise.

An Authorised Firm authorised to carry on the regulated activity of Accepting Deposits is subject to prudential supervision and must comply with AIFC Banking Business Prudential Rules.

Currency regulation

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For details see Chapter 4 of PERG.

2.2.17.2. Exclusions

Whether or not Accepting Deposits is a Regulated Activity depends on the use to which the money is put.

The activity is caught if money received by way of Deposit is lent to others or if any other activity of the person accepting the Deposit is financed wholly (or to a material extent) out of the capital of, or interest on, money received by way of Deposit.

Anyone concerned that they may be carrying on the Regulated Activity of Accepting Deposits will need to work out whether the sum received is in fact a Deposit.

A sum is not a Deposit if it is paid:

(a)     by a Person in the course of carrying on a business consisting wholly or to a significant extent of lending money;

(b)     by one company to another at a time when both are members of the same Group;

(c)     by an Authorised Firm authorised to carry on the Regulated Activity of Accepting Deposits;

(d)     by a Person who is a close relative of the Person receiving it or who is a director, manager or Controller of that Person.

A sum is not a Deposit if it is received:

(a)     by a lawyer acting in a professional capacity;

(b)     by an accountant acting in a professional capacity;

(c)     by an Authorised Firm or an Authorised Market Institution authorised to carry on any one or more of the Regulated Activities defined in Schedule 1 of the GEN, except Accepting Deposits, in the course of or for the purpose of any such Regulated Activity disregarding any applicable exclusions; or

(d)     by a Person as consideration for the issue by the person of a Debenture.

2.2.18.1. General description

Providing Credit is listed in section 18 of Schedule 1 of GEN.

It means providing a Credit Facility to another Person, i.e. providing any facility which includes any arrangement or agreement which extends monetary credit whether funded or unfunded to a Person including:

(a)     any loan or syndicated loan;

(b)     mortgage;

(c)     overdraft;

(d)     financial lease;

(e)     letter of credit;

(f)       financial guarantee;

(g)     trade finance;

(h)     transaction finance;

(i)       project finance; or

(j)       asset finance.

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.

An Authorised Firm is a Credit Provider if it is authorised to conduct the Regulated Activity of Providing Credit and it is not a Bank. Credit Providers may raise funds from capital markets or money markets using debt instruments of any type but must not accept Deposits.

Where an Authorised Firm is providing brokerage services pursuant to its licence for Dealing in Investments as Agent, it may in the ordinary course of that business also be necessary to provide margin lending facilities to its Clients. In doing so the Authorised Firm will not be considered to be Providing Credit to its Client.

Where an Authorised Firm is Effecting Contracts of Insurance or Carrying Out Contracts of Insurance, it may in the ordinary course of that Insurance Business be necessary to provide an instalment contract to a Client with respect to the payment of an insurance premium. In doing so the Authorised Firm will not be considered to be Providing Credit to its Client.

An Authorised Firm authorised to carry on the regulated activity of Providing Credit is subject to prudential supervision and must comply with AIFC Banking Business Prudential Rules.

Currency regulation

Currency transactions related to providing credit can be processed only in foreign currency and will be performed via AIFC Banks and via second-tier banks. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.18.2. Exclusions

An Authorised Firm does not Provide Credit where the provision of the Credit Facility is incidental to or in connection with the trading of Investments, or conducting Insurance Business.

An operator of the Crowdfunding Platform does not Provide Credit to the extent that it Operates a Loan Crowdfunding Platform. 

A Person does not Provide Credit to the extent that the Person operates a loyalty or rewards programme where a participant earns points or other monetary value from acquiring goods or services, which the participant can use to receive a discount on, or purchase, further goods or services.

Also see list of exclusions in 2.1.5. PERG.

2.2.19.1. General description

Advising on a Credit Facility is listed in section 19 of Schedule 1 of GEN. It means giving advice to a Person in the person’s capacity as a borrower or a potential borrower, or as an agent for a borrower or a potential borrower, on the merits of entering into a particular Credit Facility.

For further details see GEN. The definition of a Credit Facility is given in the AIFC Glossary. The definition of advice is given in section 19(2) of Schedule 1 of GEN.

An Authorised Firm authorised to carry on the regulated activity of Advising on a Credit Facility is subject to prudential supervision and must comply with AIFC Banking Business Prudential Rules.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.19.2. Exclusions

There are none.

2.2.20.1. General description

Arranging a Credit Facility is listed in section 20 of Schedule 1 of GEN. It means making arrangements for the provision of a Credit Facility by one or more Persons.

The definition of a Credit Facility is given in the AIFC Glossary.

Generally, the following activities constitute Arranging a Credit Facility:

(a)     Introducing potential borrowers to a credit provider (who can be in the AIFC or outside the AIFC);

(b)     Assisting a potential borrower to obtain credit, such as completing application forms and other processes relevant to the transaction;

(c)     Negotiating terms of credit, including any fees payable to the arranger; and

(d)     Arranging collateral or other assurances needed by the potential borrower to obtain credit.

The guidance under ‘Arranging Deals in Investments’ is generally relevant for ‘Arranging a Credit Facility’, although the activities relate to ‘credit’ in this context, instead of ‘Investments’. Therefore, a reference to Investment in that guidance should be read as ‘credit’ for the purposes of ‘Arranging a Credit Facility’.

An Authorised Firm authorised to carry on the regulated activity of Arranging a Credit Facility is subject to prudential supervision and must comply with AIFC Banking Business Prudential Rules.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.20.2. Exclusions

A Person does not carry on the Regulated Activity of Arranging a Credit Facility if the person:

(a)     is to be a party to the Provision of Credit Facilities in question; or

(b)     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.

A Person does not carry on the Regulated Activity of Arranging a Credit Facility if the activity:

(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.

2.2.21.1. General description

Providing Money Services is listed in section 21 of Schedule 1 of GEN. This Regulated Activity means engaging in, among others, the following activities:

(a)     providing currency exchange;

(b)     selling or issuing payment instruments;

(c)     selling or issuing stored value;

(d)     execution of payment transactions, including transfers of funds on a settlement account, (including a bank account), with the user's payment service provider or with another payment 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; and

(e)     execution of payment transactions where the funds are covered by a credit line for a payment service user:

(i)     execution of direct debits, including one-off direct debits;

(ii)    execution of payment transactions through a payment card or a similar device; and

(f)       money remittance; and

(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 payment service user and the supplier of the goods and services.

An Authorised Firm authorised to carry on the regulated activity of Providing Money Services is subject to prudential supervision and must comply with AIFC Banking Business Prudential Rules.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.21.2. Exclusions

An Authorised Firm, does not Provide Money Services if it does so in relation to the carrying on of another financial service where Providing Money Services is in connection with and a necessary part of that other financial service, for example, money service activities carried on in connection with, and as a necessary part of, Providing Credit, Dealing in Investments (as principal or agent), Operating an Exchange or Clearing House, Managing Investments or Providing Custody.

2.2.22.1. General description

Effecting Contracts of Insurance is listed in section 22 of Schedule 1 of GEN. It means effecting Contracts of Insurance as Principal, i.e. as a seller.

The ordinary meaning of “effect” is to cause something to happen or bring something about. “Effecting” a contract of insurance involves more than merely making the contract. It could also include the offering of insurance services and the negotiation of the terms of the contract, and steps necessary to conclude the insurance contract (for example, confirmation of the cover and policy issuance).

An Authorised Firm authorised to carry on the regulated activity of Effecting Contracts of Insurance is subject to prudential supervision and must comply with AIFC Insurance and Reinsurance Prudential Rules.

Different insurance categories are presented in the AIFC Insurance and Reinsurance Prudential Rules (General Insurance Business and Long-Term Insurance).

Acting as principal implies exclusion of agents who act on behalf of insurers.

Currency regulation 

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.22.2. Exclusions

There are none.

2.2.23.1. General description

Carrying on Contracts of Insurance is listed in section 23 of Schedule 1 of GEN. It means carrying on Contracts of Insurance as Principal.

Carrying out insurance contracts relates to the performance of obligations under contract after it has been entered into, such as:

(a)     collecting premiums;

(b)     the maintenance of records; and

(c)     handling and paying claims.

Acting as principal implies exclusion of agents who act on behalf of insurers.

A Person, who is an Authorised Firm authorised to carry on the regulated activity of Carrying on Contracts of Insurance is subject to prudential supervision and must comply with AIFC Insurance and Reinsurance Prudential Rules

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.23.2. Exclusions

There are none.

2.2.24.1. General description

Insurance Management is listed in section 24 of Schedule 1 of GEN. It 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;

(c)     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

(d)     arranging Retakaful for and on behalf of a Takaful Operator or Captive for whom it is underwriting.

For the meaning of “administration”, “underwriting”, “insurer” and “Takaful Operator” see section 24 of Schedule 1 of GEN.

An Authorised Firm authorised to carry on the regulated activity of Insurance Management is subject to prudential supervision and must comply with AIFC Prudential Rules for Insurance Intermediaries and Insurance Managers.

Currency regulation implications

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.24.2. Exclusions

There are none.

2.2.25.1. General description

Takaful Business is listed in section 25 of Schedule 1 of GEN. It 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.

For more details on Takaful Business see AIFC Takaful and Retakaful Prudential Rules.

A Person, who is an Authorised Firm authorised to carry out regulated activity of Takaful Business is subject to prudential supervision and must comply with AIFC Takaful and Retakaful Prudential Rules.

Currency regulation

Currency transactions will be performed via AIFC Banks if processed in only foreign currency, and via second-tier banks in any currency. For more details of transactional implications see Chapter 4 of PERG.

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.25.2. Exclusions

There are none.

2.2.26.1. General description

Opening and Operating Bank Accounts is listed in section 26 of Schedule 1 of GEN. It 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.

An Authorised Firm authorised to carry out regulated activity of Opening and Operating Bank Accounts is subject to prudential supervision and must comply with AIFC Banking Business Prudential Rules.

Currency regulation

Transactions related to this activity are processed in foreign currency only and will be performed via either AIFC Banks or via second-tier banks.  

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.26.2. Exclusions

There are none.

2.2.27.1. General description

Operation of a Payment System is listed in section 27 of Schedule 1 of GEN. It means operation of funds transfer system with formal and standardised arrangements and common rules for the processing, clearing or settlement of payment transactions.

Currency regulation

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.27.2. Exclusions

There are none.

2.2.28.1. General description

Operating a Multilateral Trading Facility or “MTF” is listed in section 28 of Schedule 1 of GEN, 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.

For more details see AIFC Multilateral and Organised Trading Facilities Rules.

Currency regulation

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.28.2. Exclusions

A Person does not operate a Trading Facility if it operates a facility which is an order routing system where buying and selling interests in, or orders for, financial instruments are merely transmitted but do not interact or consummate a trade.

2.2.29.1. General description

Operating an Organised Trading Facility or “OTF” is listed in section 29 of Schedule 1 of GEN, 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.

For more details see AIFC Multilateral and Organised Trading Facilities Rules.

Currency regulation

The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.

For more details see Chapter 4 of PERG.

2.2.29.2. Exclusions

A Person does not operate a Trading Facility if it operates a facility which is an order routing system, where buying and selling interests in, or orders for, financial instruments are merely transmitted but do not interact or consummate a trade.

2.2.30.1. General description

Operating a Digital Asset Trading Facility is listed in section 30 of Schedule 1 of GEN. It means operating a facility which functions regularly and brings together multiple parties

(a)     to buy, sell or exchange Digital Assets for a Fiat currency; or

(b)     to exchange one Digital Asset for another Digital Asset, in its Facility, in accordance with its non-discretionary rules.

Fiat currency means a currency which is issued by or on behalf of the government in its country (or countries) of issuance, and which is designated as legal tender in that or those countries through government decree, regulation or law.

Digital Asset has the same meaning as Private Electronic Currency or Private E-money and means a digital representation of value that:

(1)   can be digitally traded and functions as (a) a medium of exchange; or (b) a unit of account; or (c) a store of value;

(2)   can be exchanged back-and-forth for Fiat Currency, but is neither issued nor guaranteed by the government of any jurisdiction; and

(3)   fulfils the above functions only by agreement within the community of users of the Digital Asset; and, accordingly

(4)   is to be distinguished from Fiat Currency and E-money.

For more details see AIFC Rules on Digital Asset Activities.

Currency regulation

To be completed 

For more details see Chapter 4 of PERG.

2.2.30.2. Exclusions

There are none.