During the last meeting of Mazhilis (Kazakhstan’s parliament), Erbolat Dosaev, Head of the Kazakhstani National Bank, told deputies about legislative changes that might provide much more access to the local market for foreign banks, insurance companies and stock brokers.
According to the draft law “On Ratification of the Agreement on the Harmonization of the Legislation of the Member States of the Eurasian Economic Union (EAEU) in the Sphere of the Financial Market,” financial companies of the EAEU member states might receive facilitated access to the Kazakhstani market without any additional control.
“There are a lot of technical barriers that exist today. If we harmonize legislation and trust the EAEU member countries’ regulator, then foreign financial companies, brokers for example, might get much easier access to the Kazakhstani market, without any additional control,” Dosaev said.
The final draft of the law will be prepared by May of next year and all barriers for foreign financial companies in the banking sector, insurance and securities will be eliminated by 2025.
Also, EAEU members will standardize licenses for banks and insurance companies, according to the National Bank’s top manager.
“We agreed to create a standardized license that will be issued by the Central Bank or the regulator of the country of origin. It’ll let us remove all barriers. However, specific insurance certificates will be separate for Kazakhstan, Russia and other EAEU countries,” he said.
Dosaev also explained how foreign financial companies could operate in Kazakhstan.
“Since December 16, 2020, foreign banks and insurance companies will be allowed to open direct branches in Kazakhstan. It’s forbidden to open branches in the securities markets, though, because they must work through subsidiaries,” emphasized Dosaev.
According to Dosaev, in order to set up bank or insurance companies in Kazakhstan, foreign companies should meet some requirements.
“For the banking sector, the direct capital of the parent company should be $20 billion. For insurance companies, the accumulated market cap of the parent organization should be at least $5 billion. We want to see large capitalized institutions in Kazakhstan, so we don’t see any big obstacles for those who want to work here,” he said.