Article 65. Seizure of securities of the Law on Enforcement Proceedings and the Status of Bailiffs

     1. The seizure of documentary securities is imposed at their location. The seizure of undocumented securities is imposed at the place of registration of the rights of the owner of these securities.

     2. The bailiff issues a resolution on the seizure of securities. The bailiff shall also draw up a protocol on the seizure of documentary securities in accordance with the procedure established by Article 67 of this Law.

     3. The resolution on the seizure of securities shall specify the total number of securities seized, their type, identification number, information about the issuer of these securities, and other data allowing to identify the securities, as well as to establish their affiliation to the debtor.

     4. The seizure of securities belonging to the debtor means a prohibition for the debtor to dispose of them (sell, provide as security for its own obligations or obligations of third parties, otherwise encumber). When other restrictions are imposed, including restrictions on the right to receive income and other rights of the debtor secured by securities, the bailiff is obliged to list the restrictions in the resolution on the seizure of securities.

     5. The seizure of securities does not prevent:

     1) the commission by the issuer (management company) of actions to repay them, pay income on them, convert them, exchange them for other securities, or increase the number of declared shares by increasing the number of outstanding shares, if such actions are provided for by the terms of issue (rules of the mutual investment fund) of the seized securities and are not prohibited by the decree on seizure for securities. The issuer (management company, manager) immediately informs the bailiff about the commission of actions related to the payment of income on securities.;

     2) fulfillment of all obligations (or completion of all settlements, transfers) on transactions concluded in the trading system of the stock exchange until it receives the relevant court ruling on the seizure of property during the billing period on the terms and in accordance with the procedure established by the legislation of the Republic of Kazakhstan on the securities market and internal documents of the stock exchange;

     3) the central securities depository performs operations to write off equity securities whose maturity has expired and for which the issuer has not fulfilled its obligations to repay them from the holders' personal accounts (subaccounts) and transfer to the same personal accounts (subaccounts) holders of the rights of claims under the issuer's obligations under these equity securities;

      4) repurchase of voting shares of a joint-stock company by a person who, independently or in conjunction with his affiliated persons, acquired ninety-five or more percent of the company's voting shares on the secondary securities market, in accordance with the requirements of Article 25-1 of the Law of the Republic of Kazakhstan "On Joint-Stock Companies".

     The person specified in this subparagraph shall transfer the money intended to pay for the voting shares of the joint-stock company that have been seized to the account of the shareholder who sold the voting shares of the company opened at the central depository.

     The requirements of subitems 1) and 4) of Part one of this paragraph apply to transactions registered in the central depository's accounting system. The central securities depository shall notify the bailiff within three working days from the date of their commission on the commission of the actions specified in subitems 1) and 4) of Part one of this paragraph, with the exception of actions related to the payment of income on securities.

      6. Financial instruments, money or rights of claim obtained as a result of transactions specified in subitems 1), 2), 3) and 4) of the first part of paragraph 5 of this Article shall be considered to be under arrest on the same terms as securities seized under an arrest warrant, unless this contradicts the purpose of the arrest. In addition to the previously issued decision, the bailiff is obliged to issue a decision on the seizure of financial instruments (rights of claim) obtained as a result of conversion, exchange, execution of concluded transactions with financial instruments, taking into account the amount of debt determined in accordance with paragraph 5 of Article 55 of this Law.

      6-1. When reorganizing joint-stock companies (in the form of mergers, acquisitions, divisions, spin-offs), the seizure of shares of the reorganized joint-stock companies does not prevent the performance of reorganization actions, nor does it prevent the central securities depository and (or) nominee holders who keep records of the rights under the seized shares from performing appropriate actions.

     Immediately after receiving the shares of the reorganized joint-stock company (reorganized joint-stock companies) under arrest, the joint-stock company to which the merger is being carried out or newly formed as a result of the reorganization of joint-stock companies, informs the bailiff about this.

     Shares of the joint-stock company to which the merger is being carried out or newly formed as a result of the reorganization of joint-stock companies placed among the shareholders of the reorganized joint-stock company (reorganized joint-stock companies) in place of previously seized shares are considered to be under arrest under the same conditions as shares of the reorganized joint-stock company (reorganized joint-stock companies), if this does not contradict the purposes of the arrest.

      The bailiff, in addition to the previously issued resolution, is obliged to issue a resolution on the seizure of shares of the joint-stock company to which the merger is being carried out or newly formed as a result of the reorganization of joint-stock companies obtained as a result of the placement in place of previously seized shares, taking into account the debt determined in accordance with paragraph 5 of Article 55 of this Law.

     7. If the enforcement document establishes a restriction on the debtor's rights to receive income on securities and (or) to receive an amount of money upon repayment of securities belonging to the debtor that have been seized, then all income and (or) the amount of money upon repayment of these securities must be credited to the control cash account of the territorial authority or the current account of a private a bailiff intended for storing the recovered amounts in favor of the recoverers, the details of which are indicated in the relevant enforcement document.

     8. The seized documentary securities shall be withdrawn and transferred by the bailiff for safekeeping against signature in the protocol on the seizure of securities with the delivery of a copy of this protocol to the custodian. The bailiff may decide to transfer these securities to the custody of the custodian.

     9. Seized undocumented securities shall not be withdrawn or transferred to another nominee holder for registration of rights, except for the transfer of securities in the event that the nominee holder is deprived of a license to conduct brokerage and/or dealer activities with the right to maintain customer accounts as a nominee holder, or the nominee holder decides to voluntarily return the license to conduct brokerage and/or dealer activities.) dealer activity with the right to maintain customer accounts as a nominee holder.

     If the nominee holder is deprived of the license to carry out brokerage and (or) dealer activities with the right to maintain customer accounts as a nominee holder and (or) custodial activities, or if the nominee holder decides to voluntarily return the license to carry out brokerage and (or) dealer activities with the right to maintain customer accounts as a nominee holder and (or) custody activities, the transfer of seized securities is carried out to the holder's personal account (subaccount) in the central depository's accounting system.

     9-1. It was valid until 01.01.2013 in accordance with the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV.  

     10. In the event of suspension or termination of the relevant license of the nominee holder who records the rights to the seized securities, the nominee holder shall notify the bailiff no later than the day following the day of receipt of the notice of suspension or termination of the license.

     11. In case of termination by the issuer (management company) of the agreement with the nominee holder who keeps records of the rights to the seized securities, the nominee holder shall notify the bailiff no later than the day following the day of termination of the agreement.

     12. Excluded by the Law of the Republic of Kazakhstan dated 07/12/2022 No. 138-VII (effective sixty calendar days after the date of its first official publication).  

     13. In case of repayment of the seized securities in the form of transfer of their property and (or) property rights to the owner, the bailiff shall levy a penalty on such property and (or) property rights in accordance with the procedure established by this Law.

     14. Copies of the resolution on the seizure of securities shall be sent by the bailiff no later than the day following the day of its issuance (drafting) to the parties to the enforcement proceedings, as well as:

     1) the person who issued the securities (except for equity securities);

     2) the central depository (nominee holder), which records the rights under the seized securities;

     3) to the issuer (management company), if the seizure of securities consists in restricting the rights secured by these securities.

     15. From the date of receipt of a copy of the decision to seize the securities of the person specified in paragraph 14 of this article:

1) have no right to comply with the debtor's demands aimed at exercising the rights in which the debtor is limited by the specified resolution;

     2) are obliged to immediately suspend operations with the debtor's financial instruments recorded or held in accounts with the central securities depository or with a professional participant in the securities market, taking into account the amount of debt specified in the bailiff's decision, with the exception of transactions and execution of transactions specified in paragraph 5 of this Article.

     16. The seizure of the obligations of the nominee holder (professional participant in the securities market) may not be imposed on bank, personal or other accounts of the nominee holder (professional participant in the securities market), which account for financial instruments owned by clients of the nominee holder (professional participant in the securities market).

The Law of the Republic of Kazakhstan dated April 2, 2010 No. 261-IV.

President    

Republic of Kazakhstan     

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