Article 3-2. Early response measures The Law on the Securities Market

Home / RLA / Article 3-2. Early response measures The Law on the Securities Market

1. In order to protect the rights and interests of investors in the securities market and ensure the financial stability of organizations engaged in brokerage and (or) dealer activities in the securities market and (or) investment portfolio management activities, the authorized body analyzes the activities of these organizations to identify factors affecting the deterioration of their financial situation, established by regulatory legal acts. by an act of the authorized body.

2. If the factors specified in paragraph 1 of this article are identified, as a result of an analysis of the financial situation of organizations engaged in brokerage and (or) dealer activities on the securities market and (or) investment portfolio management activities, and (or) based on the results of their audit, the authorized body shall send to the organization engaged in brokerage and (or) dealer activity in the securities market and (or) investment portfolio management activities, a written requirement for the submission of an action plan, providing for early response measures to improve the financial stability of an organization engaged in brokerage and (or) dealer activities in the securities market and (or) investment portfolio management activities, to prevent deterioration of its financial situation and increase the risks associated with professional activities in the securities market.

An organization engaged in brokerage and (or) dealer activities on the securities market and (or) investment portfolio management activities is required to develop and submit to the authorized body an action plan indicating the deadlines for each item and responsible managers within no more than five working days from the date of receipt of the specified request.

Upon approval by the authorized body of the action plan, an organization engaged in brokerage and (or) dealer activities on the securities market and (or) investment portfolio management activities begins its implementation, notifying the authorized body of the results of its execution within the time limits set by the plan.

In case of disapproval of the action plan, the authorized body applies the supervisory response measures provided for by this Law to an organization engaged in brokerage and (or) dealer activities on the securities market and (or) investment portfolio management activities.

3. In case of failure to submit, within the time period established by paragraph 2 of this article, an action plan aimed at improving the financial stability of an organization engaged in brokerage and (or) dealer activities on the securities market and (or) investment portfolio management activities, non-fulfillment or late execution of the measures of this plan to the organization engaged in brokerage and (or) dealer activity in the securities market and (or) investment portfolio management activities, supervisory response measures provided for by this Law are applied.

4. The procedure for approving an action plan providing for early response measures and the methodology for determining the factors affecting the deterioration of the financial situation of organizations engaged in brokerage and (or) dealer activities in the securities market and (or) investment portfolio management activities are established by a regulatory legal act of the authorized body.

5. The requirements of this article do not apply to banks, branches of non-resident banks of the Republic of Kazakhstan and the National Postal Operator when they carry out brokerage and (or) dealer activities on the securities market.

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

 This Law regulates public relations arising in the process of issuance, placement, circulation and repayment of equity securities and other financial instruments, the specifics of the creation and operation of securities market entities, defines the procedure for regulation, control and supervision of the securities market in order to ensure the safe, open and effective functioning of the securities market, protection of investors' rights. and holders of securities, fair competition of securities market participants.

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Republic of Kazakhstan

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