RFCA achieved significant success in realization of tasks set by the President

On April 27, 2010 top management of the Agency of the Republic of Kazakhstan on regulation of activities of the regional financial centre of Almaty city (ARA RFCA) gave a report to Nursultan Nazarbayev, the President Kazakhstan on work carried out in 2009, and informed on the course of realization of tasks set by the President and defined main plans of activity for next years.

Previously the Agency was charged to strengthen work on upbuilding of competitive financial centre, promotion of Almaty city as centre of Islamic financing in Central Asian region, increasing turnover of trades on “Eurasian trading system” JSC.

As of today development of RFCA follows the worked out plan.

The Agency continues work on creation of favourable conditions for participants of securities market (SM) – development of legislation base, formation of stock market infrastructure, introduction of new financial instruments, attraction of issuers and investors to the domestic stock market, increasing level of investment activity of population on SM. During the indicated period the Agency achieved significant success in the stated directions.

In consequence of merger of two trading floors (Special trading floor of RFCA and KASE), there were introduced unified and simplified listing requirements that gives an opportunity to attract SME companies to the stock market as issuers. There was also created “buffer category” with the purpose of protecting investors that that invested their money in debt securities that defaulted. This measure will give an opportunity to avoid immediate delisting of such issuers and preserve quick access of bondholders to information on condition of company.

As of today, main issuers of the market are: companies engaged in financial and investment activities (35%), industrial sectors (mainly production of raw materials) of economy (30%), trade and services (17%), construction companies (9%), transport and communication (9%). And the main investors of the domestic market are – institutional investors: second tier banks, pension and investment funds, and insurance companies.

In the course of the last year there were started first trades on commodity exchange “Eurasian trading system” (ETS) that was established jointly with RTS Stock Exchange (Russia). At the present it is one of the largest commodity exchanges of the country.

The main goods traded on ETS are agricultural products: wheat, rye, barley, sunflower seeds, flour and sunflower oil. With the purpose of carrying out fixed date trades there was created clearing centre, technical base and system of risks for guaranteeing market participants’ deals. To the end of the year exchange turnover reached more than $400mn.

The Address of the President called “New decade-new economic rise-new opportunities for Kazakhstan” gave evidence on the special role of RFCA as the future regional financial centre, hub of Islamic finance. By the efforts of the Agency there was established legislation base for development of new type of financing – there was adopted “Law on introduction of amendments to legislation of the republic of Kazakhstan on the issues of organization and activity of Islamic banks and organization of Islamic financing”. At the present Kazakhstan has first registered Islamic brokers, Islamic consulting companies, and Islamic bank. It is planned to expand the list of potential issuers and develop retail Islamic banking. Thereby the Agency continues creating of conditions in order to make Kazakhstan one of top-10 leading financial centers of Asia and regional center of Islamic financing.

Due to initiatives of the Agency the rights of public servants were expanded concerning the possibility to participate in securities market. By the end of the year President approved Law of the Republic of Kazakhstan “On amendments to legislation of the Republic of Kazakhstan on the issues of legal position of persons authorized to carry out public functions and persons that have the same status”.

For the reporting period the Agency conducted active work on enhancement of financial literacy of population in the framework of the state Program.

Currently RFCA gives the necessary impetus for improvement of the stock market infrastructure, the legislative framework for the securities market, as well as the launching of new financial instruments. The persistence of this trend and further enhancement of work is the Agency's plans for the future.