Financial Crime World

OBLIGATION UNDER GUARANTEE ARISES BEFORE FOREIGN PERSON

Kazakhstan’s financial sector has undergone significant changes aimed at regulating and developing the insurance market, securities market, and banking activities. As of January 1, 2025, insurance agents are now required to obtain mandatory professional indemnity insurance to protect third parties from potential risks.

Insurance Agents Face New Requirement

Under the new law, insurance agents will be obliged to purchase professional indemnity insurance agreements that cover their professional liability towards third parties. However, this requirement does not apply to legal entities operating as insurance agents.

Changes in Share Buyback Procedure

The procedure for determining the share price in case of a minority shareholder’s shares being bought out by a large shareholder (holding 95% or more of the voting shares) has undergone significant changes. The new approach determines the buyback price based on the highest of three options:

  • The average share price over the last six months
  • The price of the transaction that led to the shareholder acquiring 95% or more of the voting shares
  • The market price determined by an appraiser

Restrictions on Shareholder Information Requests

Joint-stock companies now have the right to refuse a shareholder’s request for information and documents if the request relates to:

  • Financial statements published on the financial statements depository’s website
  • Repeated requests within the last three years
  • Documents related to past periods of company activity (more than three years prior to the date of the request), except for documents on transactions executed as of the date of the shareholder’s request.

Brokers and Dealers Can Operate as LLPs

Brokers and dealers that do not hold client accounts as nominee holders but instead perform intermediary activities can now be established as limited liability partnerships (LLPs) with a mandatory supervisory board in their management structure.

Outlook for Financial Sector Development

While it remains to be seen how these innovations will work in practice, the new law represents a positive step towards regulating and developing Kazakhstan’s financial sector. The changes aim to increase confidence among market participants and simplify various transactions taking place in the financial market.