of August 27, 2005 No. 100
About approval of Rules about procedure and conditions of transfer of gold and exchange assets of National Bank of the Republic of Kazakhstan to external management (Asset Management)
For the purpose of optimization of conditions of transfer of assets of National Bank of the Republic of Kazakhstan in external management (Asset Management), and also according to the resolution of Board of National Bank of the Republic of Kazakhstan of May 29, 2003 "About approval of Rules about the basic principles of management of gold and exchange assets of National Bank of the Republic of Kazakhstan" the Board of National Bank of the Republic of Kazakhstan DECIDES: No. 165
1. Approve the enclosed Rules about procedure and conditions of transfer of gold and exchange assets of National Bank of the Republic of Kazakhstan to external management (further - Rules).
2. This resolution becomes effective since September 1, 2005.
3. From the date of adoption of this resolution to recognize invalid:
1) the resolution of Board of National Bank of the Republic of Kazakhstan of December 2, 1999 No. 414 "About approval of Rules about procedure and conditions of transfer of gold and exchange assets of National Bank of the Republic of Kazakhstan to external management (Asset Management)";
2) the resolution of Board of National Bank of the Republic of Kazakhstan of June 2, 2001 No. 194 "About modification and amendments in the Rules about procedure and conditions of transfer of gold and exchange assets of National Bank of the Republic of Kazakhstan to external management (Asset Management) approved by the resolution of Board of National Bank of the Republic of Kazakhstan of December 2, 1999 No. 414".
4. To department of monetary transactions (Gerasimenko Yu. V.) in seven-day time from the date of adoption of this resolution to bring it to the attention of the interested divisions of central office of National Bank of the Republic of Kazakhstan and to post on the website of National Bank of the Republic of Kazakhstan.
5. To impose control of execution of this resolution on the vice-chairman of National Bank of the Republic of Kazakhstan Elemesov A. R.
Chairman of National Bank A. Saydenov
Approved by the Resolution of Board of National Bank of the Republic of Kazakhstan of August 27, 2005 No. 100
1. These rules about procedure and conditions of transfer of gold and exchange assets of National Bank of the Republic of Kazakhstan to external management (Asset Management) (further - Rules) are developed according to the Law of the Republic of Kazakhstan "About National Bank of the Republic of Kazakhstan" of March 30, 1995, the resolution of Board of National Bank of the Republic of Kazakhstan of May 29, 2003 No. 165 "About approval of Rules about the basic principles of management of gold and exchange assets of National Bank of the Republic of Kazakhstan" and the Investment strategy on management of gold and exchange assets of National Bank of the Republic of Kazakhstan.
2. Rules regulate general procedure and conditions of transfer of part of gold and exchange assets (further - the STAR) in external management to foreign banks and the specialized organizations for asset management.
3. Part the STAR is transferred to external management for the purposes:
1) decrease in level of the risks connected with management owing to diversification of management;
2) increases in profitability of management the STAR thanks to experience, analytical materials, researches and technical resources of the external managing director;
3) receipts of additional examination in the field of asset management, personnel trainings;
4) possibilities of implementation of new asset classes on which there is no experience in internal management.
4. Active asset management is type of management in case of which value of variability of variation of profitability (trackingerror) can exceed 0.5%.
5. Passive asset management is type of management in case of which value of variability of variation of profitability (trackingerror) does not exceed 0.5%. Under passive management portfolio return is approximately equal in external management to profitability of benchmark portfolio.
6. Superprofitability level - difference between actually reached level of profitability and level of profitability of benchmark portfolio.
7. Information coefficient (informationratio) - the attitude of historical superprofitability towards historical risk level (variability of variation of profitability).
8. In external management money and other assets which are part the STAR can be transferred.
9. The general admissible limit the STAR, transferred to external management, shall not exceed 30% of total amount the STAR of National Bank of the Republic of Kazakhstan (further - National Bank). The admissible amount the STAR on one external managing director is determined in the amount of no more amount, equivalent 800 (eight hundred) million US dollars at the time of transfer of assets. The admissible amount on one external managing director in case of passive type of management shall not exceed equivalent of 500 (five hundred) million US dollars at the time of transfer of assets, in case of active type of management shall not exceed equivalent of 300 (three hundred) million US dollars at the time of transfer of assets.
10. The choice like management (active, passive) and benchmark portfolio for the external managing director is performed according to the purpose of management the STAR and depending on situation in the market.
11. The STAR in active management for the period of time of external management is efficiency evaluation of management of the external managing director of part information coefficient. In case of passive type of management of the purpose of the external managing director receipt of the profitability as close as possible to profitability of benchmark portfolio is.
12. The fixed remuneration and/or the remuneration depending on results of management according to the procedure, established by the devolution agreement of assets in external management is paid to the external managing director.
13. The decision on need of transfer of assets in external management is made by the Chairman or the Vice-chairman supervising the division of National Bank performing transactions with the STAR (further - authorized division), according to the proposal of the representative of division, or according to the order of the Vice-chairman supervising authorized division.
14. The authorized division publishes on the website of National Bank in the international Internet information on the forthcoming carrying out the tender for the choice of the external managing director, constitutes the list of the potential external managing directors meeting requirements of Rules, distributes this information to potential external managing directors. Information on the forthcoming tender contains the following:
1) the description like the mandate and its characteristics (benchmark portfolio, the purposes of management, investment restrictions, approximate amount of the mandate);
2) the minimum information requested from the external managing director according to appendix 1 to these rules;
3) requirements to potential external managing directors;
4) the term of submission of answers to information requested from the external managing director according to appendix 1 to these rules;
5) information about the officials of National Bank responsible for carrying out the tender.
15. The authorized division can hold the elections of external managing directors independently or by means of services of third parties.
16. Potential external managing directors represent answers to information requested according to appendix 1 to these rules in electronic form.
17. The authorized division makes comparative analysis of all arrived offers, taking into account criteria of the choice of the external managing directors who are stated below:
Obligatory criteria:
1) at least 5 years of work experience with financial instruments in which the STAR is supposed to invest assets;
2) the size of assets under management: the external managing director shall have under management total assets of clients at least equivalent of 50 (fifty) billion US dollars, except for external managing directors under mandates of alternative tools for which the size of total assets of clients under management shall be at least 5 (five) billion US dollars;
3) the size of assets on the considered mandate type under management: the external managing director shall have on the considered mandate type total assets of clients the equivalent of 1 (one) one billion US dollars suffices;
4) the external managing director shall have at least three contracts on investment management with three different clients with the minimum amount of assets of equivalent 100 (hundred) million US dollars under each agreement.
Estimative criteria:
1) historical results of portfolio management (superprofitability, information coefficient), reliability and quality of management system portfolio;
2) remuneration level;
3) experience of portfolio managers and analysts (average work experience of key employees at least 5 years), stability of team (80% of portfolio managers for the last 2 years), staff turnover level;
4) reliability of risk management system, level of automation of management process;
5) financial position;
6) possibility of the external managing director to provide guarantee of its parent organization about compensation of damage in case of failure to carry out by the external managing director of terms of agreement about transfer of assets in external management, or possibility of agreement signature about transfer of assets in external management it is direct with parent organization, or in the form of the tripartite agreement between National Bank, the external managing director and its parent organization;
7) provision of training;
8) presence of portfolio managers in the region of investment of assets.
18. The authorized division has the right to make inquiry about results and quality of management of the external managing director to his clients.
19. The term of preparation of the conclusion according to the analysis of proposals of external managing directors constitutes no more than 4 (four) months from the date of provision by external managing directors of required information.
20. The conclusion prepared by authorized division containing comparative analysis of offers on external management and the recommendation about the choice of the external managing director is submitted the Vice-chairman supervising authorized division and to the Chairman which by results of consideration approve the most advantageous offers of external managing directors (the short list - shortlist). The authorized division holds negotiations with potential external managing directors from the short list for the purposes of improvement of conditions of the offer and, after approval by the Vice-chairman supervising authorized division and the Chairman takes out the draft of the resolution on statement of external managing directors on Board of National Bank.
21. In case of need the authorized division holds meetings with potential external managing directors for receipt of more detailed and exact information on the external managing director, procedure for adoption of investment decisions and control procedures for risks.
22. Each external managing director affirms the separate resolution of Board of National Bank providing the conclusion of the devolution agreement of assets with it in external management.
23. The authorized division after statement of external managing directors by Board of National Bank, represents to each participant of the tender the notification on tender result, in case of refusal specifies reasons for rejection of its offer.
24. Based on the resolution of Board of National Bank on statement of the external managing director, the authorized division carries out the procedure of preparation and agreement signature with the external managing director and the STAR exercises further monitoring and control over the implementation of all terms of agreement with the external managing director.
25. The devolution agreement of assets in external management shall contain the following conditions:
1) the right of National Bank at any time ahead of schedule to terminate the devolution agreement of assets in external management;
2) the right of National Bank at discretion to fill up/withdraw part of the assets which are in external management;
3) possibility of agreement signature on state, Russian and/or in the language determined by the consent of members of the parties;
4) provision by the external managing director of information on movement of its personnel responsible for asset management of National Bank, transferred to external management;
5) visit of the external managing director of specialists of National Bank and independent auditors for the purposes of check of account transactions, and also receipt of more detailed and exact information on the external managing director, procedure for adoption of investment decisions and control procedures for risks;
6) impossibility of use as the brokers on transactions with assets of National Bank transferred to external management, the organizations, affiliirovanny with the external managing director;
7) about responsibility of the external managing director for violation of the set limit of the expected variability of variation of profitability (expected tracking error);
8) consultation, training or training of the staff of National Bank exercising control the STAR;
9) in case of agreement cancelation the external managing director provides the complete reporting under portfolio verified with bankomkastodiany for date of termination. At the same time all expected expenses connected with portfolio for the period of external management including the expenses connected by negative cash account balances (overdraft) with the commissions of brokers and the clearing organizations, shall be subtracted from market value of portfolio for date of termination;
10) the external managing director on regular basis provides to National Bank the reporting according to the following main directions:
the daily reporting under the transactions made for the previous working day;
portfolio assessment (asset allocation on different classes and currency types, structure of portfolio for the end of month under report, market value of assets for the end of month under report);
movements in portfolio (the list of all bargains concluded for reporting quarter, sorted by different classes and currencies, repayments, dividend payout and accumulated interests);
the analysis of results of portfolio management (monthly, quarter and general results on portfolio management by the reached profitability, indicators of duration of portfolio and level of variability of variation of profitability (tracking error) in comparison with benchmark portfolio);
the written report on condition of the corresponding markets and their influence on portfolio;
economic overview;
overview of strategy and explanation of the most important changes in structure of portfolio;
current strategy of investment;
contribution of different factors to portfolio return (performanceattributionreport).
11) monthly for the end of every month the external managing director carries out reconciliation (reconciliation) of structure of the briefcase transferred to external management with data of bank custodian;
12) possibility of modification and amendments in the devolution agreement of assets in external management from written consent of both parties.
The information requested from the external managing director (distributed at stage of carrying out the tender), shall contain the conditions provided by this Item. The compulsory provision of consideration of the proposal of the external managing director is the written consent to conditions of this Item provided to them.
26. The devolution agreement of assets in external management from National Bank is signed by the Chairman or the Vice-chairman of National Bank.
27. According to signed agreements National Bank the STAR in external management by money transfer and securities into the accounts of National Bank intended for external management according to the details specified in signed agreements performs transfer of part.
28. In case of transfer of assets in external management the transition period on transfer of assets from one type in other (transitionperiod) can be considered. Duration of transition period shall not exceed 10 working days.
29. Part the STAR transferred to external management shall be stored on accounts of National Bank in bank(s) - custodian(s).
30. The agreement with the external managing director can be terminated in case of not achievement of superprofitability by the external managing director on portfolio management in external management in comparison with benchmark portfolio, in case of violations of restrictions of investment strategy and terms of agreement, in case of change of strategy of investment the STAR, and also on board decision of National Bank.
31. Agreement cancelation with the external managing director is made at any time based on the resolution of Board of National Bank or, in case of emergency, according to the decision of the Chairman of the National Bank or the Vice-chairman supervising authorized division with provision of the written notice to the external managing director and with indication of date of agreement cancelation.
32. Conditions and restrictions of the devolution agreement of assets in external management shall correspond to conditions and restrictions of the Investment strategy on management of gold and exchange assets of National Bank.
33. After the date of transmission of assets daily monitoring of activities of the external managing director is carried out to external management of authorized division: compliance to the restrictions specified in the devolution agreement of assets in external management is checked, monitoring of the transactions made by the external managing director is performed, hazard rates and portfolio returns in external management are estimated.
34. Assessment of activities of the external managing director is carried out on the basis of the achieved result of management (value of the received profitability, calculated according to bank custodian and indicator of information coefficient) in comparison with benchmark portfolio, qualities of the National Bank of training and technologies provided to specialists.
35. With frequency once a year the authorized division holds meeting with the external managing director at which the external managing director reports on results of management, on execution of investment restrictions, gives assessment market situation and its possible influence on portfolio and on the strategy of management.
36. The authorized division on regular basis (at least, than once a month) carries out the analysis of results of the external managing director based on which the authorized division can make offers to management of National Bank about termination of work with the external managing director.
37. By results of management assessment procedure of activities of the external managing director is annually carried out and by results of the carried-out analysis the relevant decision is made on prolongation of work with this external managing director or on its termination. The decision is, as a rule, made on the basis of results of the external managing director for the period of management in 2-3 years.
38. Quarterly according to the Investment strategy the STAR authorized division prepares the report on management the STAR, including, in external management.
to Rules about procedure and conditions of transfer of gold and exchange assets of National Bank of the Republic of Kazakhstan to external management (Asset Management)
The minimum information requested from the external managing director
1. Work experience of the company on the considered mandate type.
2. Assets of clients under management over the last 5 years, including:
1) assets on the considered mandate type with breakdown by the size of portfolios;
2) assets of institutional clients;
3) assets of Central Banks under management.
3. Information on portfolio managers and managers on customer relations which will be responsible for the assets transferred in external management.
4. Information on personnel turnover over the last 5 years among portfolio managers and analysts.
5. The description of method of market research, securities and so on with indication of the used source.
6. Detailed description of investment process and method of management of portfolio.
7. How modeling, monitoring and management of active market risk is performed (if the considered type of the mandate belongs to active management).
8. Use of quantitative methods in the course of creation of briefcase with the description of method of calculations.
9. Historical results of management of composite portfolio on similar type of the mandate over the last 5 years with benchmark portfolio, similar or close on type.
10. Description of procedures of payment under transactions and exchange of information with custodian.
11. The description of the computer operating systems used for the calculation of profitability, risk applied in accounting and analytical records.
12. Description of internal corporate ethics.
13. Responsibility of the external managing director to National Bank in case of breach of agreement on external management.
14. What types of insurance are used for protection of the client before mistakes of the external managing director.
15. Possibility of the external managing director to provide guarantee of its parent organization about compensation of damage in case of failure to carry out by the external managing director of terms of agreement about transfer of assets in external management, or possibility of agreement signature about transfer of assets in external management it is direct with parent organization, or in the form of the tripartite agreement between National Bank, the external managing director and its parent organization.
16. The description of the training provided for clients.
17. The used schemes of payment of remuneration to the external managing director.
18. Last audit opinion of the financial reporting.
Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info
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