Article 47-1. Enforcement measures of the supervisory response of the Law on Banks and Banking Activities in the Republic of Kazakhstan

     1. The authorized body applies compulsory supervisory response measures to persons who have the characteristics of a major participant in a bank or a bank holding company, as well as major participants in a bank, a bank holding company, and organizations that are part of a banking conglomerate, in the following cases::

     1) provided for in paragraph 11 of Article 17-1, paragraph 5 of Article 42 and paragraph 6 of Article 57 of this Law;

     2) if the application of other supervisory response measures cannot ensure the protection of the legitimate interests of depositors and creditors, the financial stability of the bank and (or) the banking conglomerate, and the minimization of risks associated with the activities of the bank or bank holding company;

     3) if the actions (inaction) of the bank holding company and (or) a major participant in the bank may lead to further deterioration of the financial position of the bank, the bank holding company.

     2. In the presence of the cases provided for in paragraph 1 of this Article, the authorized body may:

     1) require a person who has the characteristics of a major participant, as well as a major participant in the bank, to reduce the share of his direct or indirect ownership to below ten percent of the bank's voting shares;

     2) require a person who has the characteristics of a bank holding company, as well as a bank holding company, to reduce the share of his direct or indirect ownership to below twenty-five percent of the bank's voting shares and suspend operations (direct and indirect) between him and the bank that expose the bank to risk;

     3) require the bank and the bank holding company, in respect of organizations in which the bank or the bank holding company is a shareholder (participant), as well as organizations that are part of a banking conglomerate, to suspend operations (direct and indirect) between them that endanger the bank and (or) the bank holding company or organizations that are part of the bank conglomerate, risk;

     4) require a bank or a person possessing the characteristics of a bank holding company, as well as a bank holding company, to alienate their ownership or control over a subsidiary or organizations in which they have significant participation;

     5) require organizations that are part of a banking conglomerate to suspend transactions (direct and indirect) between them and their affiliates that expose organizations that are part of a banking conglomerate to risk;

     6) in order to increase the equity capital of the bank or banking conglomerate in an amount sufficient to ensure the financial stability of the bank or banking conglomerate, require the bank holding company, a major participant in the bank, to take measures for additional capitalization of the bank or banking conglomerate.

     3. If a major participant in a bank, a bank holding company, or a person possessing the characteristics of a major participant in a bank or a bank holding company fails to comply with the requirements provided for in paragraph 2 of this article, as well as paragraph 6 of Article 57 of this Law, on the basis of a decision of the authorized body, a trust management of bank shares belonging to a major participant in a bank, a bank holding company, or a person possessing signs of a major bank participant, a bank holding company. These shares are transferred to the trust management of the authorized body for a period of up to three months.

     The authorized body has the right to make a decision on the transfer of bank shares owned by a major participant in the bank, a bank holding company or a person with the characteristics of a major participant in the bank or a bank holding company to the trust management of the national managing holding company.

     In the case of transfer of bank shares owned by a major participant in the bank, a bank holding company or a person with the characteristics of a major participant in the bank or a bank holding company to the trust management of the national managing holding company, the period for which the trust management of shares is established is determined in the decision of the authorized body on the establishment of trust management.

     During the period when the authorized body or the national managing holding carries out the trust management of the bank's shares, the owner of the shares is not entitled to carry out any actions with respect to the shares held in trust.

     A major participant in a bank, a bank holding company, or a person who has the characteristics of a major participant in a bank, a bank holding company, has the right to petition the authorized body for the sale of all their shares in the bank to the persons indicated in the petition.

     The petition is satisfied by the authorized body if the purchasers of the shares specified in the petition comply with the requirements of the legislative acts of the Republic of Kazakhstan.

     If the grounds for transferring the bank's shares owned by a major participant in the bank, a bank holding company, or a person with the characteristics of a major participant in the bank or a bank holding company are not eliminated, the authorized body or the national managing holding company shall alienate the bank's shares held in trust by selling them on an organized securities market at the market value prevailing at the date of the decision on the sale of shares. In the absence of information on the market value of the shares, the selling price of the shares may be determined by the appraiser in accordance with the legislation of the Republic of Kazakhstan. The proceeds from the sale of these shares are transferred to the persons whose shares were transferred to the trust management.

     Measures for the sale of bank shares owned by a major participant in the bank, a bank holding company, or a person who has the characteristics of a major participant in the bank, a bank holding company, are carried out at the expense of the bank.

     The procedure for the trust management of bank shares owned by a major participant in the bank, a bank holding company, or a person who has the characteristics of a major participant in the bank or a bank holding company, as well as the actions of the authorized body or the national managing holding company during the trust management period, is established by a regulatory legal act of the authorized body.

     4. Excluded by the Law of the Republic of Kazakhstan dated 07/02/2018 No. 168-VI (effective from 01.01.2019).        

The Law of the Republic of Kazakhstan dated August 31, 1995 No. 2444.

President    

Republic of Kazakhstan     

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