THE RESOLUTION OF BOARD OF THE AGENCY OF THE REPUBLIC OF KAZAKHSTAN ON REGULATION AND DEVELOPMENT OF THE FINANCIAL MARKET

of June 30, 2022 No. 48

About modification of some regulatory legal acts of the Republic of Kazakhstan concerning prudential regulation

Board of the Agency of the Republic of Kazakhstan on regulation and development of the DECIDES: financial market

1. Approve the List of regulatory legal acts of the Republic of Kazakhstan concerning prudential regulation to which changes are made, according to appendix to this resolution (further - the List).

2. To provide to department of methodology and prudential regulation of the financial organizations in the procedure established by the legislation of the Republic of Kazakhstan:

1) together with Legal department state registration of this resolution in the Ministry of Justice of the Republic of Kazakhstan;

2) placement of this resolution on official Internet resource of the Agency of the Republic of Kazakhstan on regulation and development of the financial market after its official publication;

3) within ten working days after state registration of this resolution submission to Legal department of data on execution of the action provided by the subitem 2) of this Item.

3. To impose control of execution of this resolution on the supervising vice-chairman of the Agency of the Republic of Kazakhstan on regulation and development of the financial market.

4. This resolution becomes effective after day of its first official publication. Action of the paragraph of the eighth Item 1 of the List extends to the legal relationship which arose since January 1, 2022.

In cases of identification of violations of prudential standard rates by Islamic bank and other regulations and limits, obligatory to observance, specified in paragraphs the sixty fifth, the seventy third, eighty third and hundred ninth Item 2 of the List before enforcement of this resolution, the term provided in paragraphs the sixty eighth, the seventy seventh, eighty seventh and hundred thirteenth Item 2 of the List is estimated from the date of enforcement of this resolution.

In cases of identification of violations of prudential standard rates by bank and other regulations and limits, obligatory to observance, specified in paragraphs the sixty fourth, the seventy second, the hundred seventh, the hundred twenty first, hundred forty eighth and hundred sixty fourth Item 3 of the List before enforcement of this resolution, the term provided in paragraphs the sixty seventh, the seventy sixth, the hundred eleventh, the hundred twenty fifth, hundred fifty second and hundred sixty eighth Item 3 of the List is estimated from the date of enforcement of this resolution.

It is approved Bureau of national statistics of the Agency on strategic planning and reforms of the Republic of Kazakhstan

Appendix

to the Resolution of Board of the Agency of the Republic of Kazakhstan on regulation and development of the financial market of June 30, 2022 No. 48

The list of regulatory legal acts of the Republic of Kazakhstan concerning prudential regulation to which changes are made

1. Bring in the resolution of Board of National Bank of the Republic of Kazakhstan of December 24, 2012 No. 385 "About establishment of the minimum rating for legal entities and the countries which need of availability is required according to the legislation of the Republic of Kazakhstan regulating activities of the financial organizations, branches of nonresident banks of the Republic of Kazakhstan, branches of the insurance (reinsurance) nonresident organizations of the Republic of Kazakhstan, the list of the rating agencies assigning this score" (the following change is registered in the Register of state registration of regulatory legal acts at No. 8318):

state Item 2 in the following edition:

"2. Requirements of part one of Item 1 of this resolution do not extend on:

1) legal entities – the nonresidents of the Republic of Kazakhstan corresponding to all following conditions:

availability at the legal entity of the minimum long-term credit rating on the international scale in foreign currency not below "VV-" of Standard & Poors rating agency or scores of similar level assigned to one of the rating agencies specified in Item 3 of this resolution;

is resident of the foreign state having the minimum sovereign rating in foreign currency not below "VV-" of Standard & Poors rating agency or scores of similar level assigned to one of the rating agencies specified in Item 3 of this resolution;

the agreement between authorized body on regulation, control and supervision of the financial market and the financial organizations and authorized body on regulation of activities of the banks managing investment portfolio, the insurance (reinsurance) organizations of foreign state which resident is the legal entity providing exchange of information is signed.

In case of response the rating agency of credit rating in connection with the termination at the initiative of rating agency of rendering rating services to the legal entity specified in this subitem allows use within the next 12 (twelve) months of level of the credit score assigned before this response;

2) bank holdings - the nonresidents of the Republic of Kazakhstan who received the corresponding status till January 1, 2013 and corresponding for the specified date to all following conditions:

availability at bank holding of long-term credit rating on national scale in foreign currency not below "AAA" of the Japan Credit Rating Agency (JCR) rating agency or rating agency which is the affiliate of JCR;

is resident of the foreign state having sovereign rating in foreign currency below "VV-" of Standard & Poors rating agency or scores of similar level assigned to one of the rating agencies specified in Item 3 of this resolution;

the agreement between authorized body on regulation, control and supervision of the financial market and the financial organizations of the Republic of Kazakhstan and authorized body on regulation of activities of banks of foreign state which resident is the bank holding, providing exchange of information is signed.".

2. Bring in the resolution of Board of National Bank of the Republic of Kazakhstan of May 30, 2016 No. 144 "About establishment of prudential standard rates and other regulations and limits, obligatory to observance, for Islamic banks, their normative values and technique of calculations of prudential standard rates and other regulations and limits, obligatory to observance, for Islamic banks" (it is registered in the Register of state registration of regulatory legal acts at No. 13939) the following changes:

in Normative values and technique of calculations of prudential standard rates and other regulations and limits, obligatory to observance, for the Islamic banks approved by the specified resolution:

state Item 7 in the following edition:

"7. The capital of the first level is calculated as the amount of fixed capital and the added capital:

1) fixed capital is calculated as the amount:

the paid common shares corresponding to the criteria of financial instruments of fixed capital provided by Criteria for classification of tools within equity of bank according to appendix 1-1 to Standard rates;

supplementary paid-in capital;

retained net profit of last years;

retained net profit of the current year;

the cumulative opened reserve determined as the amount of remaining balance on the balance sheet account 3510 "Reserve capital" of the Standard chart of accounts of financial accounting in banks of the second level, the mortgage organizations, Development Bank of Kazakhstan joint-stock company and branches of nonresident banks of the Republic of Kazakhstan approved by the resolution of Board of National Bank of the Republic of Kazakhstan of January 31, 2011 No. 3, registered in the Register of state registration of regulatory legal acts at No. 6793;

reserves of revaluation of fixed assets and reserves of revaluation of cost of the securities carried at fair value through other comprehensive income;

reserves of revaluation of cost of the loans carried at fair value through other comprehensive income;

minus the following regulatory adjustments:

own redeemed common shares;

intangible assets, including goodwill;

losses of last years and losses of the current year;

deferred tax asset, except for parts of the deferred tax assets recognized concerning deductible temporary differences;

reserves on other revaluation;

the sales returns connected with transactions on securitization of assets. The deferred revenue in connection with the expectation of the complete or partial income in the future received from securitization conditions belongs to such income;

the income or losses from change of fair value of the financial liability in connection with change of credit risk according to such obligation;

the regulatory adjustments which are deductible from the added capital, but in connection with its insufficient level subtracted from fixed capital;

the investments specified in Item 8 of Standard rates;

2) the added capital joins the termless agreements corresponding to the criteria established in Criteria for classification of tools within equity of bank according to appendix 2 to Standard rates as a result of which at the same time there is financial asset at one person and the financial liability or other financial instrument confirming the right to share of the assets of the legal entity which remained later deductions of all its obligations at other person (further - termless financial instruments) and also the paid preferred shares corresponding to the criteria established in Criteria for classification of tools within equity of bank according to appendix 2 to Standard rates.

The size of the added capital decreases by the amount of the following regulatory adjustments:

investments of bank into own termless financial instruments by direct or indirect method;

own redeemed preferred shares of bank;

the investments specified in Item 8 of Standard rates;

the regulatory adjustments which are deductible from the capital of the second level, but in connection with its insufficient level subtracted from the added capital.

If the amount of the added capital of bank is insufficient for implementation of deduction, then the rest is subtracted from fixed capital of bank.

The reserve of revaluation of cost of the acquired government securities of the Republic of Kazakhstan issued by the Government of the Republic of Kazakhstan and National Bank of the Republic of Kazakhstan, and also securities of the issuers of the Russian Federation carried at fair value through other comprehensive income in the form of the negative revaluation which arose after March 1, 2022 joins in calculation of the amount of fixed capital step by step within 12 (twelve) months according to the following conditions:

since March 1, 2022 - in the amount of 10 (ten) percent of the amount of negative revaluation;

since April 1, 2022 - in the amount of 15 (fifteen) percent of the amount of negative revaluation;

since May 1, 2022 - in the amount of 20 (twenty) percent of the amount of negative revaluation;

since June 1, 2022 - in the amount of 25 (twenty five) percent of the amount of negative revaluation;

since July 1, 2022 - in the amount of 30 (thirty) percent of the amount of negative revaluation;

since August 1, 2022 - in the amount of 40 (forty) percent of the amount of negative revaluation;

since September 1, 2022 - in the amount of 50 (fifty) percent of the amount of negative revaluation;

since October 1, 2022 - in the amount of 60 (sixty) percent of the amount of negative revaluation;

since November 1, 2022 - in the amount of 70 (seventy) percent of the amount of negative revaluation;

since December 1, 2022 - in the amount of 80 (eighty) percent of the amount of negative revaluation;

since January 1, 2023 - in the amount of 90 (ninety) percent of the amount of negative revaluation.

since February 1, 2023 - in the amount of 100 (hundred) percent of the amount of negative revaluation.";

state Item 31 in the following edition:

"31. It is necessary to understand each physical person or legal entity to which the bank has requirements or probability of emergence of the requirements specified in Item 34 of Standard rates as the term "one borrower".

The extent of risk for the group consisting of two or more borrowers is calculated in total, as on one borrower if the extent of risk of each of borrowers exceeds 0,1 (zero whole one tenth) percent of equity of bank, and also in the presence of one of the following circumstances:

one of borrowers is large participant (the large participant in joint-stock company, limited liability partnership or partnership with the accessorial liability, the complete companion in partnership in commendam, the participant in complete partnership), the affiliate, the close relative (the parent, the child, the adoptive father adopted the full and not full brother or the sister, the grandfather, the grandmother, the grandson), the spouse (spouse), the close relative of the spouse (spouse), the first head of other borrower, or person interested in transaction by other borrower;

the large member, the affiliate, the close relative, the spouse (spouse), the close relative of the spouse (spouse) or the first head of one borrower or person interested in transaction by one borrower is large member, the affiliate, the close relative, the spouse (spouse), the close relative of the spouse (spouse) either the first head of other borrower, or person interested in transaction by other borrower;

the large member, the affiliate, the close relative, the spouse (spouse), the close relative of the spouse (spouse) or the first head of one borrower or person interested in transaction with one borrower is large member, the affiliate, the close relative, the spouse (spouse), the close relative of the spouse (spouse) or the first head or person interested in transaction, the large participant, the affiliate, the close relative, the spouse (spouses), the close relative of the spouse (spouse) or the first head of other borrower or person interested in transaction by other borrower;

there are good causes, confirmatory that one of borrowers transferred another in use the money received by it from bank in loan, in the amount of, exceeding equity of the transferring borrower;

there are good causes, confirmatory that borrowers jointly or separately gave the means received from bank in loan, in the amount of, exceeding cumulative equity of these borrowers, in use to the same third party who is not the borrower of bank;

borrowers are connected in such a way that one of borrowers (except for banks of the Republic of Kazakhstan) bears joint or subsidiary liability in the amount exceeding 10 (ten) percent of its assets according to obligations of other borrower;

the official of one borrower has financial interest in activities of other borrowers of bank;

borrowers are connected among themselves by cooperation agreement or other document which contains signs of cooperation agreement, except for the borrowers who are members of consortium;

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