Article 33. Repo transactions, transactions with derivative securities and derivative financial instruments of the Securities Market Act

     1. A broker and (or) a dealer licensed to carry out the activities of stockbrokers and stockbrokers of an authorized body in the field of regulating trading activities shall conclude transactions with derivative financial instruments on a commodity exchange in accordance with the procedure and on the terms established by a regulatory legal act of the authorized body.

     2. It is prohibited for a broker and (or) dealer specified in paragraph 1 of this Article to conclude (commit) transactions in commodities on a commodity exchange, with the exception of transactions involving derivative financial instruments whose underlying asset is a commodity.

     In the case of a transaction concluded on a commodity exchange without the participation of a central counterparty, the broker and (or) dealer act solely at the expense and on behalf of the client on the basis of a brokerage service agreement, to which the rules of the contract of assignment established by the Civil Code of the Republic of Kazakhstan apply.

     3. The central counterparty may be a clearing organization, a central depository, or a stock exchange.

     The internal documents of the stock exchange may provide for the possibility of performing the functions of a central counterparty by other organizations when concluding transactions in the trading system of this stock exchange.

     4. The procedure and conditions for transactions in derivative financial instruments involving a central counterparty are established by internal documents of the clearing organization, the central depository, and the stock exchange, which are the central counterparty.

     5. Registration of transactions with derivative securities and confirmation of rights under them are carried out by nominee holders in accordance with this Law and regulatory legal acts of the authorized body.

     6. The procedure and conditions for performing repo transactions and (or) transactions with derivative financial instruments on the organized securities market are established by the internal documents of the stock exchange.

     7. The procedure and conditions for performing repo transactions and (or) transactions with derivative financial instruments on the unorganized securities market are determined by the parties in the relevant agreement.

      8. The contract referred to in paragraph 7 of this article may be concluded in the form of a general financial agreement.  

     The general financial agreement concluded between residents is developed by a professional organization. If a foreign person is a party to a general financial agreement, the general financial agreement may be developed by a foreign professional organization.

     The General Financial Agreement defines, among other things, the procedure and conditions for the application of liquidation netting.

     The Parties have the right to make changes and/or additions to the standard terms of the general financial agreement, including with regard to the procedure and/or conditions for the application of liquidation netting.

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.

President    

Republic of Kazakhstan     

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