Consultation Paper No. AFSA-PSRD-CSP-2026-0002 from 15 July 2026 on Amendments to the AIFC Financial Technology framework
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INTRODUCTION
Why are we issuing this Consultation Paper (CP)?
The Astana Financial Services Authority (AFSA) has issued this Consultation Paper (CP) to seek suggestions from the market on the proposed amendments to the AIFC Financial Technology (FinTech) framework.
Who should read this CP?
The proposals outlined in this paper will be relevant for current and potential AIFC Participants engaged in activities related to the FinTech Lab, as well as for the broader market and other stakeholders.
Terminology
Defined terms have the initial letter of the word capitalised, or of each word in a phrase. Definitions are set out in the AIFC Glossary (GLO). Unless the context otherwise requires, where capitalisation of the initial letter is not used, the expression has its natural meaning.
What are the next steps?
We invite comments from relevant stakeholders on the proposed framework. All comments should be in writing and sent to the email specified below. If sending your comments by email, please use “Consultation Paper AFSA-PSRD-CSP-2026-0002” in the subject line. You may, if relevant, identify the organisation you represent when providing your comments. The AFSA reserves the right to publish, including on its website, any comments you provide, unless you expressly request otherwise. Comments supported by reasoning and evidence will be given more weight by the AFSA.
The deadline for providing comments on the proposed framework is 15 September 2026. Once we receive your comments, we shall consider if any refinements are required to this proposal.
Following the public consultation, we may proceed with making relevant changes to the AIFC Acts as appropriate to reflect the points raised in the consultation. You should not act on the proposals until the framework is enacted.
AFSA prefers to receive comments by email at consultation@afsa.kz.
Structure of this CP
Part I – Background
Part II – Proposals
Part III – Public Consultation Questions
Annex 1 – Proposed Amendments to the AIFC Rules
PART I – BACKGROUND
1. The AIFC FinTech Rules have been in place since 2018, providing the foundational framework for the supervision of innovative financial services. The Rules were subsequently amended in 2019 to refine certain aspects of the regime. In 2026, the AFSA is undertaking a comprehensive review and enhancement of this framework to ensure its continued relevance in light of evolving market practices, technological developments, and international regulatory standards.
2. As AIFC continues to develop as an international financial centre, it is essential that the regulatory framework remains responsive to market needs, supports sustainable growth, addresses emerging risks, and reinforces the AIFC’s competitiveness as a jurisdiction for FinTech activities. This requires a careful balance between enabling innovation and ensuring regulatory robustness and investor protection.
3. In this context, the AFSA has undertaken post-implementation monitoring of the AIFC FinTech Rules, combined with supervisory engagement with FinTech Lab participants. This process has been complemented by a comparative analysis of peer jurisdictions, allowing for benchmarking of regulatory approaches and identification of international best practices. The combined outcomes of supervisory observations and jurisdictional analysis have enabled the AFSA to identify a targeted set of policy issues to be addressed within the current review.
4. While international practices provide useful benchmarks, AFSA’s supervisory engagement through the FinTech Lab has identified a number of practical issues arising in the application of the current framework, including areas where greater clarity, proportionality, or operational alignment may be required. Accordingly, the next section sets out policy proposals to amend the FinTech framework, with a focus on addressing these implementation challenges while preserving the principles-based and flexible nature of the existing regime. The proposed measures are designed to enhance regulatory certainty, support market development, and ensure that the sandbox continues to operate as an effective gateway for innovation within AIFC.
PART II – PROPOSALS
Revising the FinTech Lab Eligibility Criteria
Introduction of a consolidated eligibility framework
5. The AFSA proposes to replace the Testing and Developing regimes with a single, consolidated eligibility framework comprising three criteria. These criteria are designed to be mutually reinforcing rather than mutually exclusive: an applicant needs only satisfy one criterion, and the AFSA will assess the application against the applicable regulatory conditions that correspond to that criterion.
6. While the substantive scope is not materially different from the current framework, the objective is to express the existing policy intent in a more consistent and internationally aligned manner. Each criterion is addressed below:
Criterion (a): Innovative Technologies and Processes
This criterion captures the core use case of the FinTech Lab: a firm with a genuinely novel product, service, process, or technology that it wishes to validate in a live market setting under regulatory supervision.
Criterion (b): Novel Application of Existing Technologies
This criterion addresses a distinct and increasingly prevalent category of FinTech Lab applicants: firms that are not deploying new technology per se, but are applying established technologies to financial services in ways that give rise to new or substantially modified business models.
Criterion (c): Presence and Recognition for Foreign Regulated Institutions
This criterion introduces an explicit recognition pathway for Regulated Financial Institutions (meaning institutions holding a licence or authorisation from a recognised financial services regulator in a foreign jurisdiction) that wish to participate in the FinTech Lab without obtaining a full AFSA licence.
7. At this stage, the proposed amendments establish the principle that participation in the FinTech Lab may be available to recognised foreign Regulated Financial Institutions. The detailed recognition framework, including eligibility requirements, assessment criteria, application procedures and any conditions applicable to recognised entities, will be developed separately by the AFSA and communicated through a subsequent notice. This approach provides the necessary regulatory basis for the recognition pathway while allowing the AFSA flexibility to design a proportionate operational framework informed by market engagement and implementation considerations.
Extend consumer benefit requirement to all FinTech Lab Activities
8. It is proposed to extend the consumer benefit requirement, currently applicable under criterion (a) only, to all Participants conducting FinTech Lab Activities, irrespective of the eligibility criterion under which they were admitted. Under the revised framework, all Participants will be required to demonstrate that their proposed activities offer benefits to consumers, such as increased accessibility, efficiency, security, or quality in the provision of financial services. This approach is consistent with international best practices, which require regulatory sandboxes to demonstrate a clear value proposition and consumer benefit.
Reintroduce an explicit “Scaling Intent” requirement
9. A common eligibility criterion in leading sandbox regimes, which is currently absent from the AFSA framework, is the requirement for applicants to demonstrate both an intention and capability to scale their solution following successful testing. This requirement is consistently reflected in peer jurisdictions.
10. The AIFC regulatory framework initially included a comparable requirement aligned with these international practices. However, this requirement was removed in 2019 on the basis that such intent was considered inherent and generally assumed from the applicant. Given the significant maturation of the FinTech ecosystem since 2019, it is proposed to revisit this position and reintroduce an explicit scaling intent requirement.
11. The reintroduction of an explicit “scaling intent” requirement would align the AIFC FinTech Lab with international best practices and provide clearer supervisory expectations regarding the ultimate objective of sandbox participation. It would reinforce the principle that the FinTech Lab is not solely a controlled environment for experimentation, but a structured pathway for enabling the responsible deployment of viable innovative solutions.
12. In addition, this requirement would strengthen the strategic role of the FinTech Lab in supporting the development of the local financial ecosystem by ensuring that participating firms are oriented towards real-world application and market deployment, where feasible. It would also enhance the quality of applicants by ensuring that admitted participants demonstrate not only technical feasibility, but also commercial and operational readiness to progress beyond the testing phase.
Self-Assessment of FinTech Lab Eligibility
13. The AFSA proposes to introduce guidance clarifying that a Person seeking admission to the FinTech Lab should undertake a self-assessment to determine whether there is a demonstrable need to test the relevant technology, process, service, or product within the FinTech Lab. The purpose of the guidance is to reinforce the policy objective of the FinTech Lab as a controlled testing environment intended for genuinely innovative solutions requiring regulatory engagement or testing, rather than as a general market entry mechanism.
Streamlining the Authorisation process by combining pre-application and application stages
14. Under the existing framework, the FinTech Lab authorisation process consists of two stages: pre-application and application. At the pre-application stage, the AFSA conducts Controllers’ fitness and propriety checks, assesses sources of funds and wealth, and reviews the business plan’s eligibility for testing. At the application stage, the AFSA assesses candidates for Controlled Functions, reviews internal control documents (e.g. AML/CTF Policy, Internal Control Rules, material outsourcing arrangements, Client assets safeguarding, Client agreement, Exit strategy) and approves a Test Plan.
15. It is proposed to combine the pre-application and application stages into a single-stage authorisation process. Under this approach, applicant’s eligibility, core systems and controls, and fitness and propriety will be assessed based on their business plan, sources of funds and wealth, proposed candidates for Controlled Functions, exit strategy, and the development of a Test Plan.
16. Detailed internal control documentation would not be required at the point of entry but would instead be developed in parallel with testing under supervisory oversight. Nevertheless, FinTech Lab Participants will be formally notified through the Licence Notice and Test Plan that no operations may commence until internal controls are established to the satisfaction of AFSA.
17. Importantly, the proposed approach also reflects existing supervisory practice implemented through Class Modification. AFSA issued Notice No. AFSA-ATD-NOT-2026-0007, dated 13 February 2026, to give effect to this approach. The Notice came into force on the date of issuance and remains in effect. Since its introduction, the approach has demonstrated effectiveness in practice; accordingly, it is now proposed to formalise it within the Rules.
18. The proposed model is expected to improve accessibility and encourage innovation, while maintaining a risk-based approach to supervision. Additionally, the pre-application fee of USD 2,000 will be removed, which is currently payable prior to the commencement of the eligibility assessment.
Facilitating Entry to the FinTech Lab for Authorised Persons
19. Under the current FinTech Lab framework, all applicants are required to obtain a FinTech Lab Licence as a precondition for participation. This uniform licensing requirement does not distinguish between firms that have no prior regulatory relationship with the AFSA and firms that are already subject to the AFSA's ongoing supervision as Authorised Persons. For the latter category, the FinTech Lab Licence requirement imposes a duplicative and disproportionate regulatory burden.
20. Under the proposed framework, an Authorised Person wishing to conduct FinTech Lab Activities will not be required to obtain a separate FinTech Lab Licence. Instead, it will engage directly with the AFSA through a process that builds on its existing authorisation and supervisory relationship. Where the proposed activities fall within the Authorised Person's current permissions, no additional licensing action will be required. Where they do not, the firm may apply for a Licence Modification or seek a waiver or modification of specific provisions of the AIFC Financial Services Framework Regulations (Framework Regulations) or the Rules, where the AFSA considers that their application would be disproportionate to a testing context of the specific product/service/process.
21. The possible scenarios are as follows: (i) Where an Authorised Person proposes to conduct FinTech Lab Activities that fall within the scope of its existing Licence, the Authorised Person may proceed to test upon completing the required engagements with the AFSA. (ii) Where the proposed FinTech Lab Activities fall outside the scope of the Authorised Person's existing Licence, two pathways are available:
(a) Licence Modification. The Authorised Person may apply to the AFSA for a modification of its existing Licence to extend the permitted scope of its authorisation to cover the proposed FinTech Lab Activities.
(b) Waiver or Modification of specific provisions of the Framework Regulations and the Rules. Alternatively, where certain requirements of the applicable AIFC Acts are not suited to or are disproportionate in the context of the specific product, service, or process being tested, the Authorised Person may apply for a waiver or modification of those specific requirements. Any waiver or modification granted will be limited in scope to the particular product, service, or process under testing and will remain in effect only for the duration of the agreed testing period, after which full compliance with the relevant requirements will be reinstated.
22. In both cases, no FinTech Lab Licence is required. The Authorised Person remains subject to its existing authorisation throughout, and the AFSA retains full supervisory oversight over the FinTech Lab Activities. This proposal reflects a well-established principle in international sandbox regulation that existing authorisation constitutes a sufficient and proportionate basis for entry into a controlled testing environment, provided appropriate safeguards remain in place.
23. The proposed approach is adopted by several leading financial regulators. The frameworks share the same foundational logic: the existing authorisation of the firm is treated as a sufficient regulatory foundation for FinTech testing, the licensing gate is replaced by a structured engagement process, and rule waivers or modifications are available for a defined testing period on a case-by-case basis.
24. It is important to note that the AFSA intends to publish a separate Notice to Authorised Persons setting out the engagement expectations that apply to firms seeking to participate in the FinTech Lab under proposed Rule.
Clarifying the Licensing framework for FinTech Lab Participants
Conditions precedent to commencement of operations
25. Under rule 2.5.1(b) of the AIFC FinTech Rules, a Licence serves as an authorisation of a Centre Participant to Test and/or Develop FinTech Activities and can be subject to a set of conditions. In practice, such conditions frequently include requirements that must be fulfilled prior to the commencement of operations, particularly in relation to internal controls, systems, and operational readiness. However, the current framework does not explicitly clarify the regulatory status of a FinTech Lab Participant during the period between the issuance of the Licence and the fulfilment of these conditions, which may create ambiguity for market participants and reduce transparency in the Public Register.
26. In light of supervisory experience, it is proposed to introduce guidance clarifying that, following the issuance of a Licence, the status of a FinTech Lab Participant in the Public Register shall remain “pending approval” where conditions precedent to commencement of operations remain outstanding. Only upon submission of satisfactory evidence demonstrating fulfilment of such conditions, and receipt of formal confirmation from the AFSA, should the status be updated to “active”, thereby enabling the Participant to commence operations with Clients. This approach is intended to enhance transparency, ensure clear signaling to the market, and reinforce supervisory control over the transition from authorisation to live operations.
Suspension, revocation and withdrawal of the Licence
27. Rule 2.5.3 of the AIFC FinTech Rules is currently addresses the suspension and revocation of a Licence; however, in substance, the provision also covers circumstances of withdrawal. It is therefore proposed to amend the title and relevant provisions of rule 2.5.3 to explicitly include withdrawal (and, where appropriate, expiry), thereby ensuring that the full range of licence termination scenarios is clearly reflected.
28. Similarly, rule 2.8.1 provides that, upon expiry of a Licence, any legal and regulatory requirements waived or modified by the AFSA cease to have effect. It is proposed to extend this provision to also cover cases of suspension, withdrawal and revocation, thereby ensuring that all scenarios in which a Licence becomes invalid are treated consistently. These clarifications will enhance legal certainty and avoid potential misinterpretation.
29. In addition, pursuant to rule 2.5.3(d)(iv) of the AIFC FinTech Rules, a FinTech Lab Participant is required, upon revocation or withdrawal of its Licence, to implement its exit strategy and ensure that all obligations to its customers are “fulfilled or addressed”. It is proposed to amend this requirement to clarify that such obligations must be “fulfilled and addressed”. This amendment is intended to remove ambiguity in the standard expected from the FinTech Lab Participants by ensuring both the full discharge of contractual and financial obligations, as well as the proper resolution of any residual matters, including client communications, complaints, and orderly wind-down arrangements. This clarification strengthens consumer protection and aligns with the AFSA’s risk-based supervisory approach.
Enhancing the framework for waivers, conditions, restrictions
Enhance the baseline applicability of the AIFC Legislation
30. Under rule 2.6.1(a) of the AIFC FinTech Lab Rules, existing requirements of the Framework Regulations and the Rules would not generally apply initially to FinTech Lab Participants. Instead, upon receipt of an application, the AFSA engages with the applicant to identify relevant provisions and may issue individual guidance tailored to the specific characteristics and risks of the proposed FinTech Lab Activities. While this approach provides flexibility, it may create ambiguity as to the baseline regulatory position applicable to FinTech Lab Participants and may lead to inconsistent interpretation by market participants.
In light of this, it is proposed to clarify the framework by establishing that all relevant AIFC Acts apply to FinTech Lab Participants by default, except for those provisions that are waived or modified, or where the timeline for application of certain provisions of the Framework Regulations and the Rules are clearly specified within the testing plan agreed with AFSA. In other words, AFSA may, based on applicant’s/Fintech Lab Participant’s request, waive or modify specific provisions of the Framework Regulations and the Rules during the entire period of Testing and/or Development of FinTech Lab Activities. Additionally, the test plan will provide for a time schedule for the gradual compliance of Fintech Lab Participant with specific provisions of the Framework Regulations and the Rules.
31. This approach reverses the current formulation and provides a clearer legal baseline, ensuring that any deviations from the standard regulatory framework are transparent, deliberate, and risk justified. Such clarification enhances legal certainty, strengthens regulatory discipline, and aligns with the principle of a risk-based and proportionate application of requirements, while preserving the flexibility necessary for innovation within the FinTech Lab.
Enhance flexibility in specification of conditions
32. It is proposed to amend rule 2.6.1(c) of the AIFC FinTech Rules to clarify that conditions imposed by the AFSA on a FinTech Lab Participant are not limited to those reflected in Schedule 1 of the Rules, which set out conditions for commencing business with Clients. While Schedule 1 may continue to serve as a non-exhaustive reference point for common conditions, it should not be interpreted as an exhaustive or restrictive list governing the AFSA’s licensing powers.
33. It is therefore proposed to remove the explicit reference to Schedule 1 and instead provide that conditions may be imposed, varied, or supplemented by the AFSA as appropriate, allowing the AFSA as it considers appropriate. This approach ensures that conditions can be applied in a proportionate and risk-sensitive manner, reflecting the specific risks, business models, and stages of testing of individual FinTech Lab Participants. It also reflects existing supervisory practice, under which conditions are tailored on a case-by-case basis.
Separation of Regulatory Requirements and Internal Governance
34. It is proposed to remove Part 3 of the AIFC FinTech Rules in its entirety. Under this approach, the administration of the FinTech Lab, including internal roles, responsibilities, and decision-making processes, will be governed through internal AFSA documents and the AIFC FinTech Rules will remain focused on their core purpose of regulating market participants and FinTech Activities. This approach enhances legal consistency, reduces regulatory rigidity by allowing AFSA to adjust its internal structure without requiring amendments to the Rules and aligns the AIFC framework with best practices.
35. We would like to highlight that the proposed repeal is not intended to alter the substantive powers, functions or responsibilities currently exercised in relation to the FinTech Lab. Accordingly, the removal of Part 3 does not result in any loss of regulatory authority or operational capability, but rather relocates internal administrative matters from the Rules to the AFSA's internal governance framework.
Enhance conditions for commencing business with Clients
36. As a result of the amendments outlined above, it is proposed to remove paragraphs (a)–(d) of Schedule 1 in order to avoid duplication. These provisions currently restate existing obligations under the AML, GEN and COB frameworks applicable to FinTech Lab participants. It is therefore considered unnecessary to retain them within Schedule 1.
37. In addition, it is proposed to introduce accompanying Guidance clarifying that the full set of requirements to be satisfied prior to the commencement of operations by FinTech Lab participants will be specified in the relevant licensing documentation issued to such participants. This will ensure regulatory clarity and avoid potential ambiguity regarding pre-commencement obligations.
Ongoing Maintenance of Adequate Financial Resources
38. The current framework requires a FinTech Lab Participant to provide evidence to the AFSA of the availability of adequate funds to meet at least 12 months of operational expenses, based on the participant’s application. It is proposed to amend this requirement to clarify that a FinTech Lab Participant must maintain adequate financial resources at all times, in line with its financial projections, to cover its remaining operational period. For example, following six months from the issuance of the Licence, the Participant should maintain sufficient funds to cover the remaining six months of projected operational expenses and provide evidence of such upon request by the AFSA. This approach ensures ongoing financial soundness, rather than a one-off assessment at the point of authorisation.
Alignment of Digital Asset Storage Requirements with DAA Framework
39. Under the current framework, where a FinTech Lab Participant provides Digital Asset transactions, it must have arrangements in place to ensure that at most 10% of Client funds or assets are held in a hot digital wallet. AFSA proposes that at most 30% of all Client funds or assets may be held in the Hot Digital wallet. The amendment aligns the FinTech Lab framework with the Digital Asset Activities Rules (rule 2.13.9), which provides that a Digital Asset Service Provider must ensure that no more than 30% of Client Digital Assets are held in a hot wallet.
40. We would also note that the proposed increase from 10% to 30% is not merely a harmonisation measure; but rather it reflects operational necessity. A 10% hot wallet threshold has proven in practice to be insufficient, as it limits the liquidity available for client withdrawals and transaction settlement. The 30% cap adopted under the DAA Rules was developed to balance operational efficiency against custody risk, and it is that same balance which the proposed amendment seeks to bring into the FinTech Lab framework.
Revise Testing Limits
Removal of References to BTC and other Digital Assets in Testing Limits
41. It is proposed to remove references to BTC and other Digital Assets within the FinTech Rules and standardize all monetary thresholds by reference to USD. This approach is justified on two main grounds. First, Digital Assets are inherently volatile and referencing them in regulatory thresholds introduces unnecessary uncertainty and inconsistency. Second, all AIFC regulatory frameworks apply USD as the standard unit of account. Aligning the FinTech Rules with this approach will improve regulatory consistency and clarity across the framework. In addition, references to “equivalent Fiat Currency” have been removed, with all amounts now specified solely in USD for consistency and clarity.
Increasing Testing Limits
42. The FinTech Lab framework currently imposes per-client and aggregate monetary limits on the amount of Client Money that FinTech Lab Participants may receive and hold during the testing period. These limits serve an important consumer protection function: they cap individual and systemic exposure to firms that are operating in a pre-authorisation or controlled testing environment.
43. The proposed limits, set out in the revised Table 1 of the FinTech Rules, are as follows.
Proposed Per-Client Limits (Fiat Currency): Revised Table 1
|
Client Category |
Previous Limit |
Proposed Limit |
Proposed Enhanced Limit (assessment required) |
|
Retail Clients/Investors (Natural Persons) |
$1,000 |
$15,000 |
$100,000 |
|
Retail Clients/Investors (Body Corporates) |
$20,000 |
$100,000 |
$500,000 |
|
Professional Clients & Accredited Investors |
within aggregated limits |
within aggregated limits |
N/A |
44. The proposed base limit of USD 15,000 for Retail Clients and Investors who are natural persons is calibrated by reference to the threshold established under the Rules of the Agency for Regulation and Development of Financial Markets of Kazakhstan (ARDFM). Those Rules provide that, in respect of bank clients conducting transactions with an AIFC participant providing digital asset platform management services, simplified customer due diligence measures apply to single banking transactions not exceeding 7,000,000 (seven million) Kazakhstani tenge, or the equivalent amount in foreign currency at the market exchange rate on the date of the transaction. At or above that threshold, enhanced customer due diligence applies, including source-of-funds verification and full AML/CFT obligations.
45. The proposed limit of USD 15,000 is further supported by the international AML standard established by the Financial Action Task Force. Under FATF Recommendation 10, the designated threshold for transactions above which full customer due diligence measures are required is USD/EUR 15,000, whether effected in a single operation or through linked operations that together reach that amount. Below that threshold, and in the absence of suspicion of money laundering or terrorist financing, full CDD is not mandatorily triggered under the FATF framework, and proportionate simplified measures may be applied.
46. The enhanced limit of USD 100,000 for Retail Clients who are natural persons is aligned with the threshold at which the AFSA's Conduct of Business Rules recognises a professional-equivalent level of engagement for individual clients. The enhanced limit of USD 500,000 for Retail Body Corporates that pass the relevant assessment reflects the significantly greater financial capacity and organisational sophistication of corporate entities relative to natural persons.
47. In assessing the knowledge, experience and qualifications of Retail Clients for the purpose of increasing the limits, a FinTech Lab Participant must apply the assessment criteria set out in COB 2.5.3. Accordingly, a Retail Client seeking an increase in such limits must satisfy the criteria applicable to an Assessed Professional Client under the COB, except for the requirement to meet the minimum net asset threshold for reclassification.
48. The AFSA proposes the following revisions to the aggregate limits:
Proposed Revisions to Aggregate Limits
|
Client Category |
Previous Cap |
Proposed Cap |
|
Retail Clients |
$200,000 |
$1,000,000 |
|
Professional Clients |
$5,000,000 |
$10,000,000 |
The revised aggregate limits are grounded in the AFSA's supervisory knowledge. Feedback from Participants and applicants consistently indicated that the previous caps were reached at client volumes too low to generate statistically meaningful test outcomes. The revised figures reflect the AFSA's current understanding of market transaction sizes and are designed to allow Participants to conduct operationally credible tests.
Mandatory Segregation of Client Money and Client Investments
49. The AFSA proposes to amend Schedule 1, rule 5.1 of the FinTech Rules in two respects. First, it replaces the permissive "allowed to receive and hold" with a mandatory requirement, making segregation of Client assets from the Participant's own money and investments a condition of participation. Second, by replacing "corporate bank accounts" with "segregated Client Money/Investment Accounts of a Third-Party Account Provider," it ensures the rule is technology neutral. The amendment reflects both a strengthening of the client asset protection standard and an expansion of its scope.
Clarification of AFSA’s Role
50. It is proposed to remove the requirement under rule 2.6 of the FinTech Rules for AFSA to be appointed as trustee of any performance assurance or guarantee provided by a FinTech Lab Participant. This requirement is considered to extend beyond the appropriate functions of AFSA as a financial regulator.
51. In addition, it is proposed to remove references to the AFSA Committee on Authorisation within the FinTech Rules, as it is an internal body. References should instead be made directly to AFSA to avoid an unnecessary operational detail in the regulatory framework.
Revise exit from the FinTech Lab
52. Under rule 2.8.2, upon exiting the FinTech Lab, a FinTech Lab Participant is required to leave the sandbox and choose one of the following options: (a) migrate to the full regulatory regime under the AIFC framework; (b) continue its business in the AIFC as a non-regulated activity; or (c) exit the AIFC in accordance with the procedure specified in rule 2.5.3(d), including in cases of suspension or revocation of the Licence.
53. A comparative jurisdictional review indicates that leading sandbox regimes generally provide two core exit pathways: transition to full authorisation, or withdrawal of the sandbox licence. Withdrawal does not, in itself, prescribe a single outcome for the participant. Following withdrawal, a participant may pursue a range of options, including continuing its business as a non-regulated activity, discontinuing the activity, or pursuing other available arrangements.
54. On this basis, the AFSA considers that the standalone option in subrule 2.8.2(b) is unnecessary, as it is already captured within the broader exit mechanism under subrule 2.8.2(c). The ability to continue as a non-regulated activity is preserved: rule 2.8.4 clarifies that a Participant may continue its business in the AIFC as a non-regulated activity where the AFSA determines that the relevant FinTech Lab Activities do not constitute Regulated Activities. Accordingly, it is proposed to remove the standalone option for continued non-regulated activity following exit from the FinTech Lab (rule 2.8.2(b)).
Enhance final reporting requirements
55. Rule 2.7.3 requires a FinTech Lab Participant to submit a final report to the AFSA within 30 calendar days from the expiry, revocation, or withdrawal of its Licence. While this requirement ensures an orderly conclusion regarding FinTech Lab activities, it does not expressly address its application in the context of a transition to a full authorisation regime. Although such transition would typically coincide with the expiry or withdrawal of the Licence, supervisory experience indicates that Participants may not consistently interpret migration as triggering final reporting obligations. It is therefore proposed to introduce Guidance, ensuring a consistent and complete supervisory record across all exit scenarios from the FinTech Lab.
56. In addition, the enhancement of rule 2.7.3(b) is proposed to strengthen the protection of Clients and reinforce accountability at the conclusion of FinTech Lab activities. By requiring explicit confirmation that all obligations to Clients have been satisfied, the amendment ensures that Participants formally attest to the proper handling of Client relationships, including the resolution of complaints and the discharge of any outstanding obligations. This approach enhances supervisory certainty, supports orderly exit or transition, and reinforces the integrity of the FinTech Lab framework.
Technical Amendments
Harmonisation of Terminology
57. Currently, the term “FinTech Lab Activities” is defined in the Glossary, the FinTech Rules and GEN 1.4. However, the Rules occasionally also refer to the same concept as “FinTech Activities,” creating inconsistency in terminology across the framework. It is therefore proposed to standardise usage by adopting a single unified term, namely “FinTech Lab Activities,” throughout the Rules and related instruments. This will ensure consistency, improve legal clarity, and avoid interpretational ambiguity.
58. In addition, defined terms such as FinTech Lab Participant, Regulated Activity, Financial Service, and Ancillary Service have been capitalised throughout the Rules for consistency with the AIFC Glossary. Also, references in Schedule 1 to the term “participant” have been removed, as there is no clear justification for introducing a new term where FinTech Lab Participant is already defined in the GLO. Accordingly, the terminology has been aligned with the GLO to ensure consistency and clarity in drafting.
Alignment of Drafting Style with the AIFC Framework
59. Part 1 of the FinTech Rules sets out provisions relating to the title, commencement date, application, interpretation, and administration of the Rules. It is proposed to remove Part 1 as its content is inconsistent with requirements in the AIFC Regulations on AIFC Acts. In particular, the AIFC Rules do not replicate the title and commencement date within the body of the Rules, as these are already reflected in the title list. Similarly, provisions relating to application and interpretation are generally addressed in the introductory sections and in the AIFC Glossary and General Rules, and do not require repetition. In addition, the reference to administration by division is not aligned with current drafting practice, under which responsibilities are attributed collectively to the AFSA. Accordingly, the removal of Part 1 would improve consistency, reduce duplication, and align the FinTech Rules with the broader AIFC legislative framework.
60. It is proposed to further enhance consistency in drafting style and internal cross-referencing within the Rules. In particular, references contained in subrules 2.5.3(d)(v) and 2.7.1(a) should be reviewed and aligned to ensure uniformity in formulation, structure, and terminology across comparable provisions. This amendment is intended to improve readability and ensure consistent interpretation of related obligations.
PART III – PUBLIC CONSULTATION QUESTIONS
Question 1. Do you agree with the proposed amendments to the FinTech Lab eligibility framework, including the introduction of a single, consolidated eligibility framework and the proposed approach for existing Authorised Persons? If not, why?
Question 2. Do you agree with the proposal to combine the pre-application and application stages into a single-stage authorisation process? If not, why?
Question 3. Do you agree with the proposals to increase the per-client and aggregate testing limits, including the introduction of enhanced limits subject to knowledge, experience and qualification assessment? If not, why?
Question 4. Do you have any comments on the proposals set out in this Consultation Paper, or any suggestions that the AFSA should consider before finalising the proposed amendments?
Annex 1 – Proposed Amendments to the AIFC Rules
PROPOSED AMENDMENTS TO AIFC RULES
In these amendments, underlining indicates a new text, and strikethrough indicates a removed text.
AIFC FINANCIAL TECHNOLOGY RULES
Guidance: Purpose of these Rules
The purpose of these Rules is to establish the AIFC framework in FinTech, which regulates the FinTech Lab, a special regulatory environment to Test and/or Develop test the FinTech Activities.
The purpose of this rulebook, “FINTECH”, is to complement the regulatory framework established by the Financial Services Framework Regulations (“the Framework Regulations”).
Part 1 sets out the commencement date, application scope, interpretation and administration matters. [intentionally omitted]
Part 2 sets out the features of the FinTech Lab.
Part 2.1 is an introduction to the FinTech Lab.
Part 2.2 describes the approach to Testing testing FinTech Activities within the FinTech Lab.
Part 2.3 describes the approach to Developing FinTech Activities within the FinTech Lab. [intentionally omitted]
Part 2.4 describes the Licence application process.
Part 2.5 describes the waivers, conditions and restrictions to which the Licence may be subject.
Part 2.6 describes the reporting obligations of the FinTech Lab Participant.
Part 2.7 describes the results of Testing and/or Developing testing the FinTech Activities within the FinTech Lab.
Part 3 provides for the general overview of the AFSA FinTech Office, outlines the objectives and scope of the functions performed by the CFTO. [intentionally omitted]
PART 1. INTRODUCTION [intentionally omitted]
1.1. Title
These Rules may be cited as the AIFC Financial Technology Rules (or FINTECH).
1.2. Commencement
These Rules commence on 15 March 2019, meaning that the AIFC FinTech Regulatory Sandbox Guidance expires.
1.3. Application
These Rules apply within the jurisdiction of the AIFC.
1.4. Interpretations
Words and expressions used in these Rules and interpretative provisions applying to these Rules are specified in the Glossary.
1.5. Administration of the Rules
These Rules are administered by the Chief FinTech Officer (hereinafter, the “CFTO”) of the AFSA FinTech Office.
PART 2. FINTECH LAB
2.1. General introduction to FinTech Lab
2.1.1. The FinTech Lab is a controlled regulatory environment within the AIFC that allows a Person to Test and/or Develop test the FinTech Lab Activities. without being immediately subject to the full set of regulatory requirements under the Framework Regulations and Rules made thereunder.
2.1.2. FinTech Lab is designed to allow Persons to deliver effective competition in the interests of consumers by:
(a) reducing the time, and potentially the cost, of getting FinTech to market;
(b) enabling greater access to the market for innovative Persons, including start-ups;
(c) the AFSA collaborating with the Person to ensure that appropriate consumer protection safeguards are built into their FinTech Lab Activities; and
(d) enabling FinTech Lab Activities to be Tested and/or Developed.
2.1.3. Risk and failure are an integral part of innovation. The FinTech Lab is intended to incorporate appropriate safeguards to identify and manage potential and actual risks in order to promote development of FinTech Lab Activities. Given that the FinTech Lab operates in a live environment, failure may result in financial losses to FinTech Lab participants Participants and their customers arising from potential risks.
2.1.4. The FinTech Lab Activities must be intended to bring benefits to consumers, which may include, for example, increase of the accessibility, efficiency, security and quality in the provision of financial services, thus promoting better risk management solutions and regulatory outcomes for the financial industry.
2.1.5. A FinTech Lab Participant must intend to roll-out its business on a broader scale in or from the AIFC once it has successfully completed testing.
2.1.6. Authorised Persons may apply to the FinTech Lab subject to the relevant engagements with the AFSA without seeking additional FinTech Lab Licence.
2.2. Testing the FinTech Activities Eligibility Criteria for the FinTech Lab
2.2.1. Eligibility Criteria
(a) The regime for Testing the FinTech Activities FinTech Lab is a live environment which allows a Person to test the feasibility of: validity of the following types of activities in a cost-effective and timely manner, in close collaboration with the AFSA:
(a) innovative technologies, processes, services or products in a controlled environment, in close collaboration with the AFSA;
(b) the application of existing technologies, processes, services or products in a novel manner, resulting in the development of new business models; and
(c) establishing a presence or obtaining a recognition in the AIFC by Regulated Financial Institutions for the purpose of testing activities that are currently regulated or not regulated by the AFSA (test the waters).
Guidance
A Person seeking admission to the FinTech Lab must conduct a self-assessment to determine whether there is a demonstrable need to test the relevant technology, process, service, or product within the FinTech Lab. Such self-assessment must be undertaken irrespective of whether the proposed activity is regulated or unregulated under the AIFC Acts.
(i) Financial Activities which are being regulated in the AIFC or similar to those that are already being regulated in the AIFC, where:
i. a different technology or process is being applied; or
ii. the same technology or process is being applied differently, meaning that an established technology or process is being applied to create a new business model;
(ii) Financial activities not currently regulated in the AIFC but regulated in other jurisdictions; and
(iii) Activities likely to be regulated in the AIFC as a financial Financial or an ancillary service Ancillary Service.
(b) The regime for Testing the FinTech Activities is also suitable for a start-up that does not satisfy the full set of requirements for regulated activities Regulated Activities, but intends to deploy FinTech Lab Activities and to commit to complying with regulatory obligations gradually and with the approval of the AFSA.
(c) The FinTech Lab Activities specified in (a) and (b) above must be intended to bring benefits to consumers, which may include, for example, increase of the accessibility, efficiency, security and quality in the provision of financial services, thus promoting better risk management solutions and regulatory outcomes for the financial industry.
2.3. Developing the FinTech Activities [intentionally omitted]
2.3.1. Eligibility Criteria
(a) Developing FinTech Activities provides access to a live market environment in which a Person can engage in activities that are currently not regulated by the AFSA, or not regulated, without immediately being subject to the full set of regulatory requirements under the Framework Regulations and Rules made thereunder.
(b) Developing FinTech Activities is appropriate in the circumstances where:
(i) it is not clear whether the proposed FinTech Lab Activity would have demand in Kazakhstani or regional market (test the waters), and
(ii) a Person has a licence to operate the proposed FinTech Lab Activity in other jurisdiction(s) which are not currently regulated by the AFSA, subject to the AFSA being satisfied that those jurisdictions have appropriate regulatory standards and practice.
(c) For the purposes of 2.3.1, the FinTech Activities eligible for the FinTech Lab are those that are regulated and not regulated by the AFSA.
2.4. Application process
2.4.1. General overview
(a) A Person seeking to Test and/or Develop the FinTech Activities within be admitted to the FinTech Lab must meet the eligibility criteria specified in rules 2.2.1. and 2.3.1. and satisfy the application requirements specified in 2.4.3(b) to be granted with a Licence.
(b) A Person may apply to the AFSA for a FinTech Lab Licence to Test and/or Develop the FinTech Activities by:
(i) completing the pre-application and application forms form and filing each the completed form with the AFSA accompanied by such documents as are specified in the form; and
(ii) providing such further information as the AFSA may require.
2.4.2. Pre-application form [intentionally omitted]
(a) The pre-application process is intended to verify the eligibility of a Person to Test and/or Develop the FinTech Activities within the FinTech Lab.
(b) The pre-application form is intended to provide information to the AFSA regarding the proposed FinTech Activities; to verify its suitability for support from the FinTech Lab; and to enable the applicant to become familiar with the AFSA’s approach in fostering innovation within the FinTech Lab.
(c) A Person must comply with the eligibility criteria before lodging the application form.
2.4.3. Application form
(a) Once the AFSA is satisfied that the Person meets the eligibility criteria, the AFSA will invite the Person to proceed with submission of additional information necessary for assessment and authorisation purposes. [intentionally omitted]
(b) In assessing the application, the AFSA will consider whether:
(i-1) the Person is eligible to test FinTech Lab Activities within the FinTech Lab and has submitted to the AFSA the outcome of the self-assessment conducted in respect of its eligibility for admission to the FinTech Lab; and
(i) the Person has performed a rigorous due diligence on legal and regulatory requirements of the AIFC for deploying the proposed FinTech Activities and understands them; and
(ii) the Person has the necessary financial and non-financial resources to support Testing and/or Developing the FinTech Activities in the FinTech Lab; and
(iii) the applicant is fit and proper; and
(iv) the Person has submitted to the AFSA the business, testing and/or development plan(s); and
(vi) other criteria that the AFSA may consider relevant have been met.
(c) Upon submission of materially complete application form, the AFSA will review the application and inform the applicant of its authorisation decision.
(d) The procedures for assessing the application, terms and conditions of issuance of the Licence are defined by the AFSA.
(e) Nothing in these Rules prevents the Person whose application had been rejected from applying to the FinTech Lab again, provided that the issues causing the rejection of application have been addressed.
2.5. Licence
2.5.1. General
(a) A Person must not Test and/or Develop test FinTech Lab Activities within the FinTech Lab unless it holds a Licence or obtains a recognition from issued by the CFTO on behalf of the AFSA.
(b) A Licence issued by the CFTO, which can be subject to a set of conditions, serves as an authorisation of a Centre Participant to:
(i) Test the FinTech Activities within the FinTech Lab; and/or
(ii) Develop the FinTech Activities within the FinTech Lab.
Guidance
A FinTech Lab Participant whose Licence is subject to conditions precedent to commencement of operations shall be designated in the Public Register as “pending approval” until such conditions are satisfied.
(c) The Licence has effect for 2 years from the date of its issuance.
2.5.2. Extension, varying, withdrawal of the Licence
(a) The FinTech Lab Participant is entitled to apply to the AFSA to extend, vary or withdraw the Licence.
(b) The FinTech Lab Participant may submit an application for the Licence extension, but no later than 2 months prior to the Licence expiration date.
(c) The FinTech Lab Participant is entitled to apply to the AFSA to extend the validity, to change the scope, and to have a condition/restriction varied or withdrawn from its Licence (or to have its Licence withdrawn) by:
(i) filing a written request with the AFSA accompanied by such documents as may be requested by the AFSA;
(ii) providing a detailed report outlining the reasons for the request. This report should include:
- The specific challenges or circumstances necessitating the extension;
- The steps taken to address these challenges or circumstances; and
- The proposed timeline for achieving full compliance with the licencing requirements.
(iii) providing such further information as the AFSA may require.
(d) Each application for an extension, variation or withdrawal of the Licence must be accompanied by sufficient reasons for such an application.
(e) In the case of withdrawal of the Licence, the FinTech Lab Participant follows the procedure specified in rule 2.5.3(d) of these Rules.
(f) The CFTO AFSA may approve the extension, variation or withdrawal of the Licence on a case-by-case basis.
(g) The CFTO AFSA, subject to 7 days prior notification to the FinTech Lab Participant and consideration of any comments received from the FinTech Lab Participant, may vary the terms of the Licence on his/her its own initiative and at his/her its own discretion based on the progress of the FinTech Lab Participant in Testing and/or Developing the FinTech Activities.
2.5.3. Suspension, revocation, withdrawal of the Licence
(a) The CFTO AFSA may suspend or withdraw the Licence based on an application of the FinTech Lab Participant.
(b) The CFTO AFSA is entitled to suspend or revoke all or some of the terms of the Licence at his/her own its discretion.
(c) For the purposes of rule 2.5.3(b), the CFTO AFSA may exercise its power only if the CFTO AFSA:
(i) is satisfied that there is a breach, or likely breach of a provision of legislation administered by the AFSA; or there is a failure, or likely failure, to comply with any obligation to which the FinTech Lab Participant is subject under the Licence; or
(ii) considers that the exercise of the power is necessary or desirable in the interests of the AIFC as the risks posed by the Testing and /or Developing FinTech Lab Activities exceed the benefits to consumers or the financial system.
(d) Upon expiration, revocation or withdrawal of the Licence, the FinTech Lab Participant must:
(i) immediately implement its exit strategy to cease provision of the FinTech Lab Activities to new and existing customers;
(ii) provide notification to customers informing them of the cessation and their rights to redress, where relevant;
(iii) compensate any customers who had suffered financial losses from engaging with the FinTech Lab Participant pursuant to the safeguards submitted by the FinTech Lab Participant while submitting the application for authorisation;
(iv) ensure that the exit strategy is employed and all the existing obligations to its customers must be fully fulfilled or and addressed; and
(v) submit a final report to the AFSA on the actions taken pursuant to the paragraph rule 2.7.3. of these Rules within 30 days after the revocation or withdrawal.
2.6. Waivers, conditions, restrictions
2.6.1. General
(a) Existing legislative requirements of the Framework Regulations and the Rules would not generally apply initially to FinTech Lab Participants. On receipt of an application for a Licence to carry out FinTech Lab Activities, the AFSA works with the applicant to identify the provisions of the Framework Regulations and the Rules that are relevant to the proposed FinTech Lab Activities and issues, as appropriate, individual guidance to the applicant or a FinTech Lab Participant according to the specific characteristics of, and risks associated with, the proposed FinTech Lab Activities.
(b) The AFSA may, on the application of a Person or its own initiative and by written notice:
(i) waive or modify any condition, restriction or requirement of the Framework Regulations and the Rules in relation to FinTech Lab Activities or proposed FinTech Lab Activities; and
(ii) define appropriate conditions for a FinTech Lab Participant at authorisation and through different stages of Testing and / or Developing testing the FinTech Lab Activities.
(c) Conditions defined by the AFSA in relation to a FinTech Lab Participant, referred to in (b), are reflected in the Schedule 1 of these Rules, may include, for example, conditions in relation to the following:
(i) type of Clients with or for whom the FinTech Lab Participant is permitted to carry on FinTech Lab Activities;
(ii) the type and size of Client transactions that the FinTech Lab Participant is permitted to enter into;
(iii) whether the FinTech Lab Participant is permitted to hold or control Client Money and Client assets, including Investments or other financial instruments.
Guidance
AFSA may, based on applicant’s or Fintech Lab Participant’s request, waive or modify specific provisions of Framework Regulations and the Rules. Additionally, the testing plan should provide for a time schedule for the gradual compliance of Fintech Lab Participant with specific parts/provisions of Framework Regulations and the Rules.
2.7. Reporting
2.7.1. Monitoring
(a) The FinTech Lab Participant is subject to monitoring by the AFSA throughout the validity period of the Licence. The AFSA requires that the FinTech Lab Participant submit information on fulfillment of the testing and/or development plan according to the paragraph rule 2.4.3(b)(iv) of these Rules.
(b) The FinTech Lab Participant must ensure proper maintenance of records during the Testing and/or Developing period in the FinTech Lab to support reviews by the AFSA of the testing and/or development plan.
2.7.2. Interim reports
(a) The FinTech Lab Participant must submit interim reports to the AFSA on the progress of fulfilment of the testing and/or development plan, which must, without limitations, include information on the following:
(i) key performance indicators, key milestones and statistical information, covering the number of clients served, number of transactions performed, values of transactions, the number of customer complaints and other indicators;
(ii) key issues observed from his fraud or operational incident reports and resolution of customer complaints (if any); and
(iii) actions or steps taken to address the key issues referred to in (ii) above.
(b) The frequency of, and specific details for, reporting will be defined by the AFSA, depending on the duration, complexity, scale and risks associated with the Testing and/or Developing the FinTech Lab Activities.
2.7.3. Final report
The FinTech Lab Participant must submit a final report containing the following information to the AFSA within 30 calendar days from the expiry, or the revocation, or withdrawal of the Licence:
(a) key outcomes, key findings, risk management measures of the Testing and/or Developing from the FinTech Lab Activities and other information as per the request of the AFSA;
(b) a full account of all incident reports and resolution of customer complaints (if any), accompanied by confirmation that all obligations to Clients have been satisfied; and
(c) in the case of a failed Test and/or Development, the lessons learnt.
Guidance
For the purposes of this Rule, the requirement to submit a final report also applies where a FinTech Lab Participant transitions to a full authorisation regime.
2.8. Miscellaneous
2.8.1. Upon expiry, suspension, revocation or withdrawal of the Licence’s validity, the legal and regulatory requirements which have been waived or modified by the AFSA will expire.
2.8.2. Unless an extension of the Licence is requested pursuant to paragraph rule 2.5.2. of these Rules, or at such time as otherwise might be necessary and agreed by the CFTO AFSA, the FinTech Lab Participant will be required to exit the FinTech Lab and choose to either:
(a) migrate to the full authorisation and supervisory regime under the AIFC regulatory framework and deploy its FinTech Activities on a broader scale; or
(b) continue its business in the AIFC as a non-regulated activity; or [intentionally omitted]
(c) exit following the procedure specified in paragraph rule 2.5.3(d).
2.8.3. Migration to full authorisation is possible provided that:
(a) both AFSA and the FinTech Lab Participant are satisfied that the intended Test and/or Development testing outcomes of the FinTech Lab Activities are achieved; and
(b) the FinTech Lab Participant can fully comply demonstrate compliance with the relevant legal and regulatory requirements envisaged under the AIFC acts Acts to carry on the Regulated and/or Market Activities.
2.8.4. The FinTech Lab Participant may continue its business in the AIFC as a non-regulated activity in certain circumstances when, for instance, the Testing and/or Developing FinTech Lab Activities will be classified by AFSA as a non-regulated activity non-Regulated Activity.
2.8.5. The content of the exit strategy of the FinTech Lab Participant may vary based on commercial needs, and may include ceasing the business, or transferring the FinTech and engaged customers to other authorised financial institution(s).
PART 3. THE AFSA FINTECH OFFICE
3.1. Overview
3.1.1. The FinTech Lab and the FINTECH are administered by the CFTO.
3.1.2. The CFTO is an agent and employee of the AFSA and is subject to the same responsibilities and has the same rights as other agents or employees of the AFSA under the AIFC laws.
3.1.3. The CFTO is accountable to the AFSA Board of Directors.
3.2. Objectives and functions
3.2.1. Objectives
(a) In exercising the CFTO’s functions, the CFTO acts in an independent and non-biased way.
(b) The CFTO exercises the CFTO’s functions only in pursuit of the following objectives:
(i) to promote good practices and observance of the requirements of these Rules; and
(ii) to pursue effectiveness and transparency in administering of these Rules.
3.2.2. Functions
(a) The CFTO has the powers given to the CFTO by or under the applicable law of the AIFC, decisions of Governor, AFSA Board of Directors and AFSA Executive Body.
(b) Without limiting paragraph (a), the CFTO’s functions include the following:
(i) preparing draft rules, codes of practice and submitting them to the AFSA Board Legislative Committee for consideration;
(ii) preparing and adopting guidance for the AIFC FinTech Lab Participants, and seeking approval of the Board of Directors of the AFSA of any guidance adopted by the CFTO;
(iii) issuing or approving the necessary forms, procedural guidance and other necessary documents pertinent to these Rules;
(iv) initiating and convening the AFSA Committee on Authorisation of FinTech Lab applicants;
(v) devising a tailored regulatory regime for FinTech Lab Participant to Test and/or Develop the FinTech Activities within the FinTech Lab, including, without limitations, the following:
i. create and modify eligibility criteria on a case by case basis at his/her own discretion after due consideration of risks posed by the proposed FinTech;
ii. issue individual guidance to the FinTech Lab Participant having regard to specific characteristics of the participant, or risk posed by, a specific FinTech Activity of the FinTech Lab participant;
iii. holding the signature right of various legal matters:
i. approve the form of the Licence and other application forms, and make modifications thereto;
ii. issue the Licence;
iii. modify, suspend or revoke the Licence at any time at his/her own discretion due to necessity to pursue one or more regulatory objective.
(vi) waiving or modifying any conditions, restriction, requirements of the Framework Regulations or the Rules defining the conditions to apply to FinTech Lab Participants upon authorisation through different stages of Testing and/or Developing their FinTech Activities; and/or
(vii) exercise all or any of the following functions on behalf of the AFSA in relation to FinTech Activities:
i. approving the form of Licence;
ii. issuing Licences; and
iii. modifying, suspending or revoking Licences at any time, at the CFTO’s own discretion, to give effect to or further 1 or more regulatory objectives.
(c) The CFTO may make a decision under (vi), (vii).iii with immediate effect. However, if the CFTO makes a decision under (vi), (vii).iii the CFTO must refer the decision to the AFSA Committee on Authorisation for its consideration. The committee may confirm, set aside or change the condition in any way it considers appropriate.
3.2.3. Other powers
(a) These Rules are not an exhaustive source of the CFTO’s exercise of AFSA’s statutory powers and discretion. In discharge of his/her regulatory duty, the CFTO is entitled to exercise other powers or functions which the CFTO considers necessary or desirable for or in connection with, or reasonably incidental to, the exercise of the CFTO’s functions, where it might be relevant to address any specific matter in FinTech.
(b) The CFTO may delegate all or any of the CFTO’s functions to any AFSA employee.
(c) The CFTO, and any delegate of the CFTO, is not liable to third parties for anything done or omitted to be done in the exercise or purported exercise of the CFTO’s functions (including any function delegated to the CFTO) under the AIFC Acts, decisions of Governor and AFSA Executive Body, except when it is established that such an action or omission was committed with unfair intentions and/or malicious intent and/or for the purpose of deliberate non-fulfillment or violation of his/her official duties.
Schedule 1: Conditions
1. Conditions for commencing business with Clients
1.1. A FinTech Lab Participant (the participant) must meet the following minimum requirements before commencing business with Clients:
a) the participant it must demonstrate evidence of the availability of the policies, procedures, arrangements, systems and controls required by AML;[intentionally omitted]
b) the participant it must make the mandatory appointments as required by GEN 2.1 and must appoint a Chief Information Technology Officer, who must be an individual responsible for the participant’s ongoing information technology (IT) operations, maintenance and security oversight to ensure that the participant’ IT systems are reliable and adequately protected from external attack or incident where required under the DAA; [intentionally omitted]
c) the participant it must have a Client agreement that outlines the risk disclosure measures required by the participant’s licence issued by the AFSA; [intentionally omitted]
d) the participant it must comply with GEN 5.2 (Outsourcing); [intentionally omitted]
e) the participant it must provide to the AFSA a signed statement, certifying that the participant has adequate measures in place to ensure the following:
(i) that the participant’s IT systems are resilient and not prone to failure;
(ii) business continuity if a part of the IT system fails;
(iii) the protection of the IT systems from damage, tampering, misuse or unauthorised access;
(iv) the integrity of data forming part of, or being processed through, the IT systems;
(v) real time monitoring and reporting on system performance, availability and integrity;
(vi) that policies and procedures for the IT systems are adequately established and maintained;
(vii) that the participant has sufficient resources to operate without disruption, maintain and supervise the participant’s IT facilities.
f) the participant it must provide to the AFSA evidence of the availability of adequate funds to meet at least 12 months of operational expenses, as per the participant’ application to become a FinTech Lab Participant, and must ensure that such adequacy is maintained at all times in line with its financial projections for the remaining operational period;
g) the participant it must ensure that Client Money is held in a segregated Client Money Account with a third-party account provider Third Party Account Provider that is a Bank or a Regulated Financial Institution that is authorised in any jurisdiction to Accept Deposits;
h) if the participant a FinTech Lab Participant is providing provides Digital Asset transactions -, the participant it must have arrangements in place to ensure storage of Client funds on a Hot Digital wallet at most equivalent to 10 Bitcoin (further BTC) or 10 30% of all Client funds or assets, whichever is greater.
2. Testing limits
2.1. The AFSA defines conditions for activities of the FinTech Lab Participants by setting standardised tailored limits on size of funds, types of Clients permitted for the purpose of Testing FinTech Activities, which are determined based on the maturity of the applicants and/or FinTech Lab Participants firm, riskiness and type of activities.
2.2. The AFSA does not may impose any limits on the number of Clients, size of funds, types of Clients for Developing FinTech Activities given that they are performed by the firms authorised in foreign jurisdiction/-s. the FinTech Lab Participants admitted under rule 2.2.1.(c).
2.3. The maximum size of funds amount of Client Money/Investment (per Client/Investor) up to which the Client Money/Investment Accounts are permitted to be deposited and/or refilled for the FinTech Lab Participants during the period of testing in the FinTech Lab is reflected in the Table 1:
Table 1:
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Currency |
Retail Clients and Investors: natural persons |
Retail Clients and Investors: Body Corporates |
Professional Clients and Accredited Investors |
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Fiat Currency |
15,000 (fifteen thousand) USD 100,000 (one hundred thousand) USD or equivalent - if Retail Client – natural person, passes the relevant assessment conducted by the FinTech Lab Participants, confirming the knowledge, experience, and qualifications in the relevant field.
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100,000 (one hundred thousand) USD
500,000 (five hundred thousand) USD or equivalent - if Retail Client – Body Corporate, passes the relevant assessment conducted by the FinTech Lab Participants, confirming the knowledge, experience, and qualifications in the relevant field. |
within aggregated limits |
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Guidance
In assessing the knowledge, experience and qualifications of Retail Clients for the purpose of increasing the limits, a FinTech Lab Participant must apply the experience and understanding assessment criteria set out in COB 2.5.3. Accordingly, a Retail Client seeking an increase in such limits must satisfy the criteria applicable to an Assessed Professional Client under the COB, except for the requirement to meet the minimum net asset threshold for reclassification.
2.4. The maximum size of aggregated funds of Clients The aggregated amount of Client Money/Investment that a FinTech Lab Participant is permitted to hold without ensuring compensation arrangement (which can be, for instance, in the form of performance assurance or guarantee) at any given instance during the period of testing in the FinTech Lab for the purpose of Testing the FinTech Lab Activities is determined by AFSA:
a) for Retail Clients and Investors:
(i) 1,000,000 (one million) 200,000 (two hundred thousand) USD or equivalent Fiat Currency; or
(ii) 50 (fifty) BTC or equivalent Digital Asset. [intentionally omitted]
b) for Professional Clients and Accredited Investors:,
(i) 10,000,000 (ten million) 5,000,000 (five million) USD or equivalent Fiat Currency; or
(ii) 1,250 (one thousand and two hundred fifty) BTC or equivalent Digital Asset. [intentionally omitted]
2.5. If a FinTech Lab Participant has an adequate arrangement to compensate its Clients against losses or damages, the AFSA may consider increasing the values of maximum sizes of Retail Clients funds Money/Investment outlined in paragraphs 2.3 and 2.4 above.
2.6. The AFSA must be appointed as the trustee of a performance assurance or guarantee provided by a FinTech Lab Participant. [intentionally omitted]
2.7. The AFSA Committee on Authorisation may, at any time, increase or reduce a testing limits under 2.3. and/or 2.4. for a particular FinTech Lab Participant, or a Person who is an applicant to become a FinTech Lab Participant, if satisfied that it is justified to do so.
2.8. A FinTech Lab Participant may apply to the AFSA Committee on Authorisation for a testing limits applying to it under this 2.3. and/or 2.4. to be increased. Without limiting the grounds on which the participant a FinTech Lab Participant may justify the application, the participant may justify the application on 1 or more of the following grounds:
i. successful performance of the authorised FinTech Lab Activities during a period of 6 (six) months without any incident and with properly execution of the participant’s Testing/Developing plan;
ii. fulfillment of all requirements in relation to systems and controls and all legal and regulatory requirements;
iii. providing adequate arrangement to compensate its Clients against losses or damages in the case of default.
3. Outsourcing core functions
3.1. The AFSA generally permits a FinTech Lab Participant to outsource any of the participant’s functions to a service provider (including a service provider within the participant’s Group). However, the FinTech Lab Participant remains responsible for compliance with the requirements of the Framework Regulations and the Rules.
3.2. If the AFSA has difficulty in obtaining information from the FinTech Lab Participant about an outsourced function, the AFSA may limit the outsourcing of the function.
4. Minimum number of employees
4.1. FinTech Lab Participant shall appoint at least 2 (two) individuals who can carry out the functions of Approved Individuals and Designated Individuals and at the same time ensure that there is no conflict of interests in the carrying out of the functions.
Guidance
One Person may hold the positions of Senior Executive Officer and Finance Officer, and another Person may hold the positions of Compliance Officer and Money Laundering Reporting Officer.
5. Use of corporate bank accounts Segregation of Client Money/Investment
5.1. A FinTech Lab Participant is allowed required to receive and hold Client Money/Investment in corporate bank accounts segregated Client Money/Investment Accounts of a Third-Party Account Provider, which is a Bank or a regulated financial institution which is authorised to accept Deposits or funds, subject to relevant segregation of funds in place., ensuring separation from its own Money/Investment.
AIFC FEES RULES
8. FINTECH LAB FEES
8.1. Application and other fees payable to the AFSA by the FinTech Lab firms
8.1.1. Pre-application fee to the FinTech Lab A Person seeking to Test and/or Develop the FinTech Activities within the FinTech Lab must pay to the AFSA the pre-application fee specified in Schedule 8 prior to commencing any eligibility assessment in accordance with FINTECH 2.4.2. [intentionally omitted]
(…)
SCHEDULE 8: FINTECH LAB FEES
(…)
8.1 Pre-application fee [intentionally omitted]
A Person seeking to Test and/or Develop the FinTech Activities within the FinTech Lab must pay to the AFSA the pre-application fee in the amount of 2 000 USD prior to commencing any eligibility assessment.
AIFC GLOSSARY
2. INTERPRETATION
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FinTech Lab Activities |
Activities specified in GEN 1.4. |
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FinTech Lab Participant |
Means an Authorised Person who was issued a Licence to carry on one or more FinTech Lab Activities within the FinTech Lab. |
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