1. GENERAL

1.1. Name

These Rules are the AIFC Co-operation and Exchange of Information Rules (CO-OP).

1.2. Commencement

These Rules will commence on 15 December 2018.

1.3. Application of these Rules

These Rules apply within the jurisdiction of the AIFC.

2. FRAMEWORK FOR CO-OPERATION AND EXCHANGE OF INFORMATION

2.1. Arrangements for co-operation and the exchange of information

The AFSA may at its discretion, and in relation to its obligations under Part 11 (Co- operation and Exchange of Information) of the Framework Regulations enter into memoranda of understanding or other arrangements for co-operation and the exchange of information with other authorities, including Financial Services Regulators.

Guidance: Obligation in Part 11 (Co-operation and Exchange of Information) of the Framework Regulations

Part 10 of the Framework Regulations requires the AFSA to:

(a) ensure the confidentiality of information received in the exercise of a regulatory function; and

(b) assist the exercise by specified persons of their regulatory functions.

2.2. Exercise of powers on behalf of other authorities

Subject to subsection 2.3, the AFSA may exercise its powers, including the power to obtain information from Centre Participants, on behalf of other authorities if the request for assistance is made by:

(a) the National Bank of the Republic of Kazakhstan;

(b) a Financial Services Regulator;

(c) a governmental or regulatory authority exercising powers and performing functions relating to anti-money laundering, counter-terrorist financing or sanctions compliance;

(d) a self-regulatory body or organisation exercising and performing powers and functions in relation to Financial Services;

(e) a law enforcement agency; or

(f) a governmental or other regulatory authority including a self-regulatory body or organisation exercising powers and performing functions in relation to the regulation of auditors, accountants or lawyers,

for the purpose of assisting the exercise by any such authority of its regulatory functions.

2.3. Restrictions on regulatory co-operation

The AFSA shall not exercise its powers at the request of an authority listed in subsection 2.2 if:

(a) any exercise of the AFSA's powers would require the AFSA to act in a manner that would violate applicable criminal laws of the Republic of Kazakhstan or Acting Law of the AIFC;

(b) any request is in relation to criminal or enforcement proceedings that have already been initiated in the AIFC or the Republic of Kazakhstan relating to the same facts or same Persons, or the same Persons have already been penalised or sanctioned on substantively the same allegations or charges and to the same degree by the AFSA or the competent authorities in the Republic of Kazakhstan;

(c) the request is prejudicial on the grounds of public or national interest;

(d) the requesting authority refuses to give reciprocal assistance within its jurisdiction in response to a comparable request from the AFSA;

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(f) the requesting authority fails to demonstrate a legitimate reason for the request.

Where a request for assistance is denied, or where assistance is not available under the Acting Law of the AIFC or laws of the Republic of Kazakhstan, the AFSA will provide the reasons for not granting the assistance and consult pursuant to subsection 2.3.-1 (Consultation Regarding Mutual Assistance and the Exchange of Information).

2.3.-1. Consultation Regarding Mutual Assistance and the Exchange of Information

a) The AFSA will consult periodically with other authorities, including Financial Services Regulators outside the AIFC, about matters of common concern with a view to improving its operation and resolving any issues that may arise.

(b) The AFSA will consult with the requesting authority in matters relating to specific requests, including but not limited to requests that would be so burdensome as to prejudice or disrupt the performance of the AFSA's regulatory functions and duties.

2.4. Legitimate reasons for requesting assistance

In deciding whether to comply with a request for assistance, including a request to disclose confidential information, the AFSA will assess if:

(a) there are legitimate reasons for the request; and

(b) the authority requesting the information has appropriate standards in place for dealing with confidential information.

Guidance: Factors determining legitimate requests

In determining the legitimacy of a request, the AFSA may consider if:

(a) the request will enable the requesting authority to discharge more effectively its regulatory responsibilities to enforce and secure compliance with the financial services laws administered by the requesting authority;

(b) the request is for the purpose of actual or possible criminal, civil or administrative enforcement proceedings relating to a violation of financial services laws administered by the requesting authority;

(c) the requesting authority is governed by laws that are substantially equivalent to those governing the AFSA concerning regulatory confidentiality, data protection, legal privilege and procedural fairness;

(d) the request involves the administration of justice of a law, regulation or requirement that is related to enforcing and securing compliance with the financial services laws of the requesting jurisdiction;

(e) any other authority, governmental or non-governmental, is cooperating with the requesting authority or seeking information from the confidential files of the requesting authority; and

(f) fulfilling the request will foster the integrity of, and confidence in, the financial services industry in the AIFC and the requesting jurisdiction.

2.5. Asset freezing

Subject to the restrictions in subsection 2.3, the AFSA may, where appropriate, freeze or sequester funds or assets in the possession or control of a Centre Participant at the request of a Financial Services Regulator, provided that the AFSA and the Financial Services Regulator shall have entered into an MoU that allows either party to request the freezing or sequestration of such funds or assets.

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