Article 1. The basic concepts used in this Law of the Law on the Securities Market

Home / RLA / Article 1. The basic concepts used in this Law of the Law on the Securities Market

For the purposes of this Law, the following basic concepts are used:

1) agency bond – a bond issued by a financial agency or a legal entity that repurchases mortgage loans from individuals not related to entrepreneurial activities, one hundred percent of whose shares belong to the National Bank of the Republic of Kazakhstan;

2) a convertible security is a security of a joint–stock company that is subject to replacement with its other type of security on the terms and in accordance with the procedure determined by the issue prospectus.;

3) an underwriter is a professional participant in the securities market who holds a license to carry out brokerage and dealer activities and provides services to the issuer for the issue and placement of equity securities.;

3-1) open bidding method – a bidding method in which it was the bidder who submitted the bid, and presumably there is competition between a potentially unlimited number of bidders;

3-2) social bonds – bonds, the funds from the placement of which will be used to finance (refinance) partially or completely new and (or) existing projects aimed at solving social problems and (or) achieving positive social changes.;

4) security – a set of certain records and other designations certifying property rights;

5) nominal holding of securities – performing certain legal actions on behalf of and at the expense of the holders of securities in accordance with the nominal holding agreement or in accordance with this Law, as well as accounting and confirmation of securities rights and registration of transactions with securities of such holders;

6) securities quotation – the price of demand and (or) supply announced for a security at a certain point in time on the organized securities market;

7) primary securities market – placement of declared equity securities by the issuer (underwriter or an equity consortium), with the exception of further placement by the issuer of previously repurchased equity securities on the secondary securities market;

7-1) the integrated information system of the stock exchange securities market is a complex of material and technical means and internal documents of the stock exchange, using which the exchange of quotations is supported and the possibility of concluding transactions between its users is ensured;

8) secondary securities market – legal relations that develop between subjects of the securities market in the process of circulation of placed securities;

8-1) terms of issue of securities – a document (prospectus for the issue of securities, a private memorandum, information on the issue of bonds with a maturity of no more than twelve months, another document defining the terms of the issue) containing information about (about) the issuer, the securities expected to be sold, the volume of the issue, the number of securities in the issue, the procedure and procedure for their issuance, placement, circulation, payment of dividends (remuneration), repayment, and other information that may influence an investor's decision to purchase securities;

9) the system of registers of securities holders is a set of information about the issuer, equity securities and their holders, providing identification of holders of rights under equity securities at a certain point in time, registration of transactions with securities, as well as the nature of registered restrictions on the circulation or exercise of rights under these securities, and other information in accordance with a regulatory legal act of the authorized body for regulation, control and supervision of the financial market and financial organizations;

9-1) professional participant in the securities market – a legal entity, a branch of a non-resident bank of the Republic of Kazakhstan, operating in the securities market on the basis of a license or in accordance with the laws of the Republic of Kazakhstan;

10) manipulation in the securities market – actions of subjects of the securities market and other persons aimed at setting and (or) maintaining prices (rates) of securities and other financial instruments, including foreign currencies and derivative financial instruments, above or below those established as a result of an objective ratio of supply and demand, to create the appearance of trading in a security or other financial instrument;

11) excluded by the Law of the Republic of Kazakhstan dated 01/02/2021 No. 399-VI (effective from 12/16/2020) ;

12) security holder – a person registered in the system of registers of securities holders or the system of accounting for nominal holding, who has rights under securities, as well as a mutual investment fund, the holders of shares of which have rights under securities that are part of the assets of the mutual investment fund.;

13) basic asset – standardized batches of goods, securities, currency, financial instruments and other indicators determined by the internal documents of the organizer of the auction;

13-1) general financial agreement – an agreement on the terms of which transactions with derivative financial instruments, repo transactions and (or) other transactions involving securities, currency and (or) other financial instruments may be concluded, the standard terms of which have been developed by a professional organization or, in cases established by this Law, a foreign professional organization an organization;

14) excluded by the Law of the Republic of Kazakhstan dated 07/02/2018 No. 166-VI (effective from 07/01/2019); 15) excluded by the Law of the Republic of Kazakhstan dated 07/02/2018 No. 166-VI (effective from 07/01/2019);

15-1) the integrated information system of the over–the-counter securities market is a complex of material and technical means and internal documents of the central securities depository, using which the exchange of quotations is supported and the possibility of concluding transactions on the unorganized securities market is ensured;

16) broker is a professional participant in the securities market who makes transactions with equity securities and other financial instruments on behalf, at the expense and in the interests of the client;

17) an order is a document submitted to a professional securities market participant by the holder (acquirer) of financial instruments, indicating the implementation of a specific action in relation to financial instruments owned by him or money intended for the purchase of financial instruments;

17-1) single operator – a single operator in the field of accounting of state property, defined in accordance with the legislation of the Republic of Kazakhstan on state property;

18) excluded by the Law of the Republic of Kazakhstan dated 07/02/2018 No. 166-VI (effective from 01.01.2019);

19) individual investor – an investor who is not an institutional investor;

20) delisting is the exclusion of securities from the official list of the auction organizer.;

21) a depository receipt is a derivative equity security confirming ownership of a certain number of equity securities that are the underlying asset of this depository receipt;

22) depository activity – the activity of providing services for nominal holding of securities for other nominal holders, organizations that are clients of the central depository, and making settlements on transactions with financial instruments;

23) excluded by the Law of the Republic of Kazakhstan dated 07/02/2018 No. 166-VI (effective ten calendar days after the date of its first official publication);

24) depositor – a client of the central depository performing the functions defined in paragraph 1 of Article 59 of this Law;

25) default – non-fulfillment of obligations on equity securities and other financial instruments;

26) dealer is a professional participant in the securities market who makes transactions with equity securities and other financial instruments in his own interests and at his own expense on the unorganized securities market and on the organized securities market with the right of direct access to it;

26-1) voluntary accumulative pension fund is a professional participant in the securities market that carries out investment portfolio management activities on the basis of a license from the authorized body for regulation, control and supervision of the financial market and financial organizations with the right to attract voluntary pension contributions.;

27) declared equity securities – securities whose issue has been registered by the authorized body for regulation, control and supervision of the financial market and financial organizations;

27-1) "green" bonds – bonds, the funds from the placement of which will be used to finance (refinance) partially or completely new and (or) existing "green" projects;

28) personal account – a set of records contained in the system of registers of holders of securities or the system of accounting for nominal holding, allowing for unambiguous identification of a registered person for the purpose of registering transactions and accounting for rights under equity securities and other financial instruments;

29) a personal account statement is a document that is not a security issued by the central securities depository or a nominee holder and confirms the rights of a registered person under financial instruments at a certain point in time.;

30) was valid until 01.01.2013 in accordance with the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV;

31) an investment project is a set of measures aimed at achieving certain results from investments and involving investments, as well as those implemented over a certain period of time and having a completed character.;

32) the investment committee is a collegial body of a professional participant in the securities market (with the exception of a transfer agent) that makes investment decisions regarding its own assets of a professional participant in the securities market and (or) assets transferred to investment management by the investment portfolio manager.;

33) investment portfolio – a set of various types of financial instruments or property of an investment fund owned or managed by a securities market entity in accordance with the requirements established by the legislation of the Republic of Kazakhstan on investment and venture funds;

34) an investment portfolio manager is a professional participant in the securities market who carries out civil rights management activities on his behalf, in the interests and at the expense of the client.;

35) insider – a person who has access to insider information;

36) insider information – reliable information about securities (derivative financial instruments), transactions with them, as well as about the issuer that issued (provided) securities (derivative financial instruments), its activities that constitute a commercial secret, as well as other information unknown to third parties, the disclosure of which may affect changes in the value of securities (derivative financial instruments) and the activities of their issuer;

37) institutional investor is a legal entity that raises funds for the purpose of making investments in accordance with the legislation of the Republic of Kazakhstan.;

38) infrastructure bond – a bond for which the fulfillment of the issuer's obligations is secured by a state guarantee under a public-private partnership agreement for the implementation of an infrastructure project concluded between the state and the issuer, in an amount corresponding to the value of the facility transferred to the state.;

39) mortgage bond – a bond secured by a pledge of claims under mortgage loan agreements (including mortgage certificates), as well as other highly liquid assets, the list of which is established by a regulatory legal act of the authorized body for regulation, control and supervision of the financial market and financial organizations;

40) an Islamic special financial company is a legal entity established in accordance with this Law in the organizational and legal form of a joint–stock company or a limited liability partnership that issues Islamic securities, as well as a state-owned Islamic special financial company;

41) allocated assets of an Islamic special financial company – property and claims acquired by an Islamic special financial company, and proceeds therefrom;

42) Islamic securities – equity securities, the terms of issue of which comply with the principles of Islamic finance, certifying the right to own an indivisible share in tangible assets and (or) the right to dispose of assets and (or) income from their use, services or assets of specific projects for which these securities were issued.;

43) repayment of Islamic securities – payment, within the time limits set by the prospectus for the issue of Islamic securities, at the expense of allocated assets, of the amount of money corresponding to the proportion proportional to the ratio of the number of Islamic securities owned by the holder to the total number of Islamic securities of this issue;

44) representative of holders of Islamic securities – an organization acting in the interests of holders of Islamic securities on the basis of an agreement concluded with the issuer;

45) the nominal value of Islamic securities is the monetary expression of the value of Islamic securities paid by the investor when purchasing Islamic securities as part of their initial placement on the terms established by the prospectus of the issue of Islamic securities;

46) custodian is a professional participant in the securities market who records financial instruments and clients' money and confirms their rights, stores documentary financial instruments of clients with obligations for their safety and other activities in accordance with the legislative acts of the Republic of Kazakhstan;

47) client – a person who uses or intends to use the services of a professional participant in the securities market;

47-1) clearing participant – a legal entity that has concluded a clearing service agreement with a clearing organization (central counterparty);

47-2) accounts for clearing activities – accounts opened in the name of a clearing organization to account for the assets of the clearing organization specified in the second part of paragraph 4-1 of Article 77-1 of this Law.;

47-3) guarantee funds of a clearing organization (central counterparty) – funds formed from contributions from clearing participants and intended to reduce the risks of the clearing organization (central counterparty) in servicing clearing participants, as well as to ensure the obligations of clearing participants to the clearing organization (central counterparty);

47-4) reserve fund of a clearing organization (central counterparty) – funds formed from the clearing organization's (central counterparty's) own assets and intended to reduce the risks of the clearing organization's (central counterparty's) activities;

IZPI's note! Subparagraph 48) is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 205-VIII (effective sixty calendar days after the date of its first official publication).

48) Kazakhstan depositary receipt is a derivative equity security confirming ownership of a certain number of financial instruments issued in accordance with the legislation of the Republic of Kazakhstan;

IZPI's note! Subparagraph 49) is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 205-VIII (effective sixty calendar days after the date of its first official publication).

49) secured bond – a bond under which the fulfillment of the issuer's obligations is fully or partially secured by a pledge of the issuer's property, a guarantee from the bank and (or) a guarantee from the state and (or) a guarantee from the national development institute, which is a bank authorized to implement state support for industrial and innovative activities and (or) a guarantee from a special entrepreneurship development fund established by decision of the Government of the Republic of Kazakhstan, and (or) another legal entity, the controlling stakes of which belong to the national management holding, and (or) the national managing holding company;

50) clearing activities for transactions in financial instruments – the process of determining, verifying and transmitting information about the requirements and (or) obligations of participants in a transaction in financial instruments;

51) dematerialization of financial instruments is a change in the method of confirming the rights certified by financial instruments issued in documentary form by confirming these rights with electronic records in the central depository's accounting system;

52) financial market – a set of relations related to the provision and consumption of financial services and the circulation of financial instruments;

52-1) clearing certificate of participation is a non–emissive security issued by a clearing organization that performs the functions of a central counterparty and certifies its owner's right to a share of assets held in the clearing organization's guarantee fund.;

52-2) covenants (restrictions) – conditions, the occurrence of which will entail obligations for the issuer of non-government bonds, established by the prospectus for the issue of non-government bonds;

53) stock exchange is a legal entity established in the organizational and legal form of a joint-stock company, at least twenty-five percent of the total number of voting shares of which belong to the National Bank of the Republic of Kazakhstan, which provides organizational and technical support for trading by directly conducting them using the trading systems of this trading organizer.;

53-1) the official list of the stock exchange is a part of the list of the stock exchange, for inclusion in which securities and issuers of securities comply with the requirements of the regulatory legal act of the authorized body for regulation, control and supervision of the financial market and financial organizations and internal documents of the stock exchange.;

54) the stock exchange trading system is a complex of material and technical means, internal documents of the stock exchange and other necessary assets and procedures used to conclude transactions with equity securities and other financial instruments between members of this stock exchange;

55) stock exchange trader – an individual authorized to conclude transactions and perform other actions on behalf of a member of the stock exchange using the trading system of this stock exchange;

55-1) stock exchange list – a list of financial instruments authorized for circulation in the stock exchange trading system, compiled in accordance with the internal documents of the stock exchange;

55-2) corporate events – events that have a significant impact on the issuer's activities and affect the interests of the issuer's securities holders and investors, as defined in Article 102 of this Law.;

56) non–documentary security - a security issued in an undocumented form (in the form of a set of electronic records);

57) documentary securities – securities issued in documentary form (on paper or other tangible media with the ability to directly read the contents of the security without using special technical means);

58) leverage – the ratio between the size of the issuer's liabilities and equity;

59) listing – the inclusion of securities in the official list of securities of the stock exchange, for which the internal documents of the stock exchange establish special (listing) requirements for securities and their issuers.;

60) licensee – a legal entity, a branch of a non-resident bank of the Republic of Kazakhstan operating in the securities market on the basis of a license issued by the authorized body for regulation, control and supervision of the financial market and financial organizations;

60-1) margin contribution – money and (or) other financial instruments deposited by the clearing participant as security for the fulfillment of obligations to the clearing organization (central counterparty);

60-2) margin transaction is a securities purchase and sale transaction carried out by a broker and (or) dealer who has the right to maintain customer accounts as a nominee holder of securities on the basis of his client's order, which is settled using money or securities provided by the broker and (or) dealer to the client on the terms of repayment, urgency and fees;

61) non–state equity securities - shares, bonds and other equity securities that are not government equity securities;

61-1) state Islamic special financial company is an Islamic special financial company established by the decision of the Government of the Republic of Kazakhstan by the authorized body for state property in the organizational and legal form of a limited liability partnership, which issues state Islamic securities;

62) state equity security – an equity security certifying the rights of its holder in respect of a loan in which the borrower is the Government of the Republic of Kazakhstan, the National Bank of the Republic of Kazakhstan and local executive bodies, or certifying the rights of its holder to receive income from the use of assets on the basis of a lease agreement;

IZPI's note! Subparagraph 63) is provided for in the wording of the Law of the Republic of Kazakhstan dated 30.06.2025 No. 205-VIII (effective sixty calendar days after the date of its first official publication).

63) impeccable business reputation – the presence of facts confirming professionalism and good faith, including the absence of facts of a person committing illegal actions (inaction) that led to insolvency, which led to the forced liquidation of a financial institution, or to classifying the bank as an insolvent bank, the absence of an outstanding or outstanding criminal record, including the absence of an effective judicial act on the application of criminal penalties in in the form of deprivation of the right to hold the position of a senior employee of a financial institution, of a banking and (or) insurance holding company and be a major participant (major shareholder) of a financial institution for life;

64) conflict of interest – a situation in which the interests of professional securities market participants and their clients do not coincide with each other;

64-1) net liability (net claim) - a monetary obligation (monetary claim) arising (calculated) as a result of the implementation (application) of liquidation netting in accordance with the procedure and on the terms defined in the general financial agreement;

65) Nominal holding accounting system – an accounting system for a professional securities market participant providing nominee holding services, containing information about holders of securities and their securities, ensuring their identification at a certain point in time, registration of transactions with securities, as well as the nature of registered restrictions on the circulation or exercise of rights under these securities, and other information in accordance with a regulatory legal act of the authorized body for regulation, control and supervision of the financial market and financial organizations;

66) redemption of bonds – actions of the issuer to withdraw the placed bonds from circulation by paying remuneration and the nominal value (without the purpose of subsequent sale) of the bond or converting it into a share (shares) of the same issuer in accordance with the procedure established by the bond issue prospectus;

67) a representative of bondholders is an organization acting in the interests of bondholders on the basis of an agreement concluded with the issuer in the process of bond circulation on the secondary securities market, payment of remuneration on bonds and their repayment.;

67-1) the framework program for the issue of bonds is a document defining the issuer's overall strategy for achieving sustainable development goals, compliance of its issued "green" and (or) social bonds, and (or) sustainable development bonds, and (or) bonds related to sustainable development with internationally recognized standards in the field of sustainable development, including regarding the targeted use of the money received from the placement of these bonds, the management (accounting) of these funds, obtaining an external assessment, verification, and subsequent disclosure of information;

68) a bond program is a bond issue within which the issuer has the right to carry out several bond issues, including those with a different issue structure determined by the relevant issue prospectus.;

69) the nominal value of a bond is the monetary expression of the value of a bond determined by the terms of the issue.;

70) blocking is a temporary ban on the registration of civil law transactions with securities in the system of registers of securities holders and the system of accounting for nominal holdings, carried out in order to guarantee the safety of securities;

71) originator is a legal entity that is a resident of the Republic of Kazakhstan, meets the requirements of the authorized body for regulation, control and supervision of the financial market and financial organizations, transfers assets to an Islamic special financial company on the basis of a purchase and sale agreement and (or) is the founder of an Islamic special financial company, as well as the authorized state property management body;

72) placed equity securities – equity securities fully paid for by investors on the primary securities market;

72-1) bonds related to sustainable development – non-governmental bonds, the characteristics of which may vary depending on the achievement of the issuer's defined goals in the field of sustainable development;

72-2) sustainable development bonds – bonds, the funds from the placement of which will be used to finance (refinance) partially or completely a combination of "green" and social projects;

73) the central depository is a specialized non–profit joint-stock company engaged in the types of activities provided for in paragraph 2-1 of Article 45 of this Law.;

74) the central securities depository accounting system is a set of information generated by the central securities depository when carrying out depository activities and maintaining a system of registers of securities holders.;

75) central counterparty is an organization engaged in clearing transactions in financial instruments, as well as certain types of banking operations and acting as a party to transactions concluded on organized and unorganized securities markets, as well as on the commodity exchange, for each seller and each buyer of a financial instrument.;

76) professional organization – a legal entity established by financial organizations in the form of an association (union) in order to establish uniform rules and standards for their activities in the securities market;

77) the applicant is a legal entity, a branch of a non–resident bank of the Republic of Kazakhstan, which has submitted documents to the authorized body for regulation, control and supervision of the financial market and financial organizations in order to obtain a license to operate on the securities market.;

78) prudential standards – financial indicators of standards established by the authorized body for regulation, control and supervision of the financial market and financial organizations and subject to compliance by the licensee;

79) reserve fund – funds intended to cover losses resulting from the investment of money received from the placement of Islamic securities, the procedure for the formation and use of which is determined by the prospectus of the issue of Islamic securities;

80) rating is an individual numerical and letter–based assessment indicator that establishes the relative creditworthiness of a particular issuer or the quality and reliability of its securities.;

81) the organizer of the auction is the stock exchange or the central securities depository in carrying out the organizational and technical support of the auction by operating and maintaining the quotation exchange system between the clients of the central securities depository in accordance with this Law.;

82) liquidation netting – the provision of the general financial agreement, on the basis of which, upon the occurrence of an event determined by the general financial agreement, all monetary obligations (monetary claims), as well as all obligations (claims) for the transfer of property, including the provision (payment) of a security fee, for all transactions concluded under the general financial agreement, regardless of whether they are subject to whether the specified obligations (requirements) are fulfilled at the time of the occurrence of such an event, are replaced (automatically or at the choice of one of the parties) by innovation, termination or otherwise defined in the general financial agreement, for one net obligation (net claim), the due date of which is considered to have occurred;

83) payment agent – a bank, a branch of a non-resident bank of the Republic of Kazakhstan, or an organization engaged in certain types of banking operations;

84) a transfer agent is a professional participant in the securities market who provides services for receiving and transferring documents (information) between his clients;

85) derivative securities – securities certifying rights in relation to the underlying asset of these derivative securities (derivative securities are not a derivative financial instrument, but may be the underlying asset of a derivative financial instrument);

86) registered person – a person who has a personal account opened in the accounting system of a professional participant in the securities market;

87) was valid until 01.01.2013 in accordance with the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV;

88) excluded by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (effective after ten calendar days after its first official publication);

89) the organized securities market is the sphere of circulation of equity securities and other financial instruments, transactions with which are carried out in accordance with the internal documents of the stock exchange;

90) an unorganized securities market is a sphere of circulation of securities and other financial instruments in which transactions with securities and other financial instruments, including foreign currencies and derivative financial instruments, are carried out without complying with the requirements established by the internal documents of the stock exchange;

91) international identification number (ISIN code) is an alphanumeric code assigned by the central securities depository to securities and other financial instruments for the purpose of their identification and systematization of accounting;

92) hedging – transactions with derivative financial instruments performed in order to compensate for possible losses resulting from an unfavorable change in the price or other indicator of the hedged object. At the same time, assets and (or) liabilities are recognized as hedged objects, as well as cash flows related to these assets and (or) liabilities or expected transactions.;

92-1) a foreign accounting organization is a foreign organization that is a client of the central securities depository, performing, in accordance with the legislation of the state of which the foreign accounting organization is a resident, functions similar to those of a nominee holder established by paragraph 1 of Article 59 of this Law, subject to the requirements defined by regulatory legal acts of the authorized body;

92-2) a foreign professional organization is an international organization, a foreign legal entity, or a foreign organization that is not a legal entity, which establishes uniform rules and (or) standards in financial markets, and is included in the list approved by the authorized body.;

93) a foreign state–issued security is an equity security certifying the rights of its holder in relation to a loan in which the borrower is the government of a foreign state, or another security classified as government securities in accordance with the legislation of a foreign state.;

94) issue structure – information on the number of equity securities to be issued, their type, and nominal value (for bonds);

95) internal documents – documents that regulate the conditions and procedure for the activities of a securities market entity, its bodies, structural divisions (branches, representative offices), employees, the provision of services and the procedure for their payment;

96) equity securities – securities having homogeneous characteristics and details within the same issue, placed and traded on the basis of uniform conditions for this issue.;

97) circulation of equity securities – making civil law transactions with securities on the secondary securities market;

98) The State Register of Equity Securities is a set of information on issues of equity securities and their issuers, compiled by the authorized body for regulation, control and supervision of the financial market and financial organizations;

99) placement of equity securities – sale of securities on the primary securities market;

100) excluded by the Law of the Republic of Kazakhstan dated 02.01.2021 No. 399-VI (effective ten calendar days after the date of its first official publication);

101) issue of equity securities – actions of the issuer aimed at the emergence of equity securities as an object of civil rights, or a set of certain securities, the placement, circulation and repayment of which are carried out in accordance with the terms of the issue of these equity securities;

102) cancellation of the issue of equity securities – termination of the existence of an equity security as an object of civil rights;

103) issuing consortium – an association of underwriters established on the basis of a joint activity agreement in order to provide services to the issuer for the issue and placement of equity securities;

104) issuer – a person who issues equity securities.

The Law of the Republic of Kazakhstan dated July 2, 2003 No. 461.

 This Law regulates public relations arising in the process of issuing, placing, circulating and redeeming equity securities and other financial instruments, the specifics of the creation and operation of securities market entities, defines the procedure for regulating, controlling and supervising the securities market in order to ensure the safe, open and effective functioning of the securities market, and the protection of investors' rights. and holders of securities, fair competition of securities market participants.

President

Republic of Kazakhstan

Constitution Law Code Standard Decree Order Decision Resolution Lawyer Almaty Lawyer Legal service Legal advice Civil Criminal Administrative cases Disputes Defense Arbitration Law Company Kazakhstan Law Firm Court Cases