Comment to Article 261. Violation by the issuer of the terms and procedure of issue and (or) placement of non-state equity securities of the Code of the Republic of Kazakhstan On Administrative Offenses  

     1. Repeated (two or more times within twelve consecutive calendar months) failure and/or late submission by the issuer to the central securities depository of documents for making changes and/or additions to the issuer's personal accounts in the system of registers of securities holders -

     They impose a fine on small businesses and non-profit organizations in the amount of one hundred, on medium-sized businesses in the amount of two hundred, and on large businesses in the amount of three hundred monthly calculation indices.

     2. Repeated (two or more times within twelve consecutive calendar months) violation by the issuer of the procedure for placing non-governmental equity securities, with the exception of actions provided for in part three of this article, -

     entails a fine for small businesses and non-profit organizations in the amount of one hundred, for medium-sized businesses in the amount of two hundred, and for large businesses in the amount of three hundred monthly calculation indices.

     3. Violation by the issuer of the conditions and procedure established by the legislation of the Republic of Kazakhstan for the issue and (or) placement of non-governmental equity securities in the territory of a foreign state, and (or) inclusion of non-governmental equity securities in the list of securities of a stock exchange operating in the territory of a foreign state, -

     entails a fine on legal entities in the amount of fifty percent of the amount of money received from the placement of equity securities.

     4. Violation by the issuer of the requirements for state registration of the issue of non-governmental equity securities, repeated (two or more times within twelve consecutive calendar months) violation by the issuer of the conditions for the issue of non-governmental bonds established by the legislation of the Republic of Kazakhstan on the securities market, -

     A fine of four hundred is imposed on small or medium-sized businesses, and five hundred monthly calculation indices are imposed on large businesses.

     Note.

     Issuers shall not be held administratively liable in accordance with this article if, at the time of the discovery of the offense, the issuer:

     deprived of a license to operate in the financial sector and activities related to the concentration of financial resources, and is subject to compulsory liquidation or is in the process of compulsory liquidation; declared bankrupt by the court.

     The commented article establishes administrative liability for violation by the issuer of the terms and procedure for the issue and (or) placement of non-government equity securities.

     The generic object of offenses provided for in Article 261 of the Administrative Code is the procedure established in the legislation of the Republic of Kazakhstan and protected by the state for conducting business in the field of finance.  

     The direct object of administrative offenses provided for in the commented article is the procedure established by the legislation of the Republic of Kazakhstan for the issuance and (or) placement of non-governmental equity securities.

     The subjects of offenses provided for in Article 261 of the Administrative Code, by virtue of the direct indication of this in the sanctions of the commented article, are legal entities, business entities, non–profit organizations - issuers of non-governmental securities.

     An issuer is a person who issues equity securities.

     Equity securities are securities that have homogeneous characteristics and details within a single issue, placed and traded on the basis of uniform conditions for this issue.

     According to the note to the commented article, issuers are not held administratively liable as established by the commented article if, at the time of the discovery of the offense, the issuer was deprived of its license to operate in the financial sector and activities related to the concentration of financial resources and is subject to compulsory liquidation or is in the process of compulsory liquidation; declared bankrupt by a court.

     Accordingly, issuers who, at the time of detection of the offense, were deprived of a license to operate in the financial sector and activities related to the concentration of financial resources, are subject to compulsory liquidation or are in the process of being liquidated, or declared bankrupt by a court, are not considered subjects of an offense under the commented article.  

     As a victim of an offense under Article 261 of the Administrative Code, the legislator in the commented article indicates holders of non-governmental equity securities.

     According to Part 1 of Article 745 of the Administrative Code, a victim is a natural or legal person who has suffered physical, property or moral harm by an administrative offense. The case of an administrative offense is considered with the participation of the victim. In his absence, the case may be considered only in cases where there is evidence that he was properly notified of the place and time of the case and if he did not file a motion to adjourn the case.  

     Accordingly, the presence and participation of the securities holder as a victim in the case of an administrative offense under the commented article is mandatory.

     The subjective side of the acts provided for in Article 261 of the Administrative Code cannot be established in relation to issuers who are legal entities.  

     The offences provided for in the commented article are formal. In order to calculate and impose a fine on an offender under the commented article, it is not necessary to establish the fact and amount of damage caused by the commission of an offense.

     Part 1 of the commented article establishes administrative liability for repeated (two or more times within twelve consecutive calendar months) failure and/or late submission by the issuer to the central securities depository of documents for making changes and/or additions to the issuer's personal accounts in the system of registers of securities holders.

     The objective side of the offense provided for in Part 1 of Article 261 of the Administrative Code is that the offender commits unlawful acts (inaction) in the form of:

     1) repeated failure to submit to the central securities depository documents for making changes and (or) additions to the issuer's personal accounts in the system of registers of securities holders and (or)

     2) late submission to the central securities depository of documents for making changes and (or) additions to the issuer's personal accounts in the system of registers of securities holders.

     The repeated failure to submit or late submission of documents should be understood as their failure to submit two or more times within twelve consecutive calendar months.

     At the request of Clause 6, Article 22 of the Law of the Republic of Kazakhstan "On the Securities Market", the issuer (underwriter, issuing consortium) is obliged to submit to the central securities depository (nominee holder) an order to transfer the purchased equity securities to the investor's personal account in the securities register system within two business days after the date of the investor's fulfillment of the obligation to pay securities, except in cases when the payment of securities is carried out in the accounting system of the central securities depository on the principle of "delivery versus payment".

     Repeated non-fulfillment or untimely fulfillment by obligated persons of the above-mentioned legislative requirement forms the final composition of the offense provided for in Part 1 of the commented article.

     For the commission of an offense provided for in Part 1 of the commented article, the perpetrators are subject to punishment in the form of a fine.  

     Depending on the legal status of the offender and the business category to which he belongs, the amount of the fine is:  

     - for small businesses and non-profit organizations - 100 MCI;  

     - for medium-sized businesses - 200 MCI;  

     - for large business entities - 300 MCI.

     The amounts of fines for each of the above categories of subjects of an offense are fixed and are not subject to change by the body imposing them.  

     This penalty is imposed on offenders by the National Bank of the Republic of Kazakhstan or a court, in the case of a court hearing.  

     Part 2 of the commented article establishes administrative liability for repeated (two or more times within twelve consecutive calendar months) violation by the issuer of the procedure for placing non-governmental equity securities, with the exception of actions provided for in Part 3 of Article 261 of the Administrative Code.

     Part 3 of Article 261 of the Administrative Code provides for liability for violation by the issuer of the conditions and procedure established by the legislation of the Republic of Kazakhstan for the issuance and (or) placement of non-governmental equity securities in the territory of a foreign state, and (or) inclusion of non-governmental equity securities in the list of securities of a stock exchange operating in the territory of a foreign state.

     The objective side of the offense provided for in Part 2 of Article 261 of the Administrative Code is that the offender commits illegal actions (inaction), which are expressed in repeated violations of the procedure for placing non-state equity securities.

The repeated violation of the procedure for the placement of non-state equity securities should be understood as a violation of this procedure two or more times within twelve consecutive calendar months.

     The procedure for the placement of non-state equity securities is established in Article 22 of the Law of the Republic of Kazakhstan "On the Securities Market".

     The repeated violation by the issuer of the procedure for placing non-governmental securities constitutes a complete violation provided for in Part 2 of the commented article.

     For the commission of an offense provided for in Part 2 of the commented article, the perpetrators are subject to punishment in the form of a fine.  

     Depending on the legal status of the offender and the business category to which he belongs, the amount of the fine is:  

     - for small businesses and non-profit organizations - 100 MCI;  

     - for medium-sized businesses - 200 MCI;  

     - for large business entities - 300 MCI.

     The amounts of fines for each of the above categories of subjects of an offense are fixed and are not subject to change by the body imposing them.  

     This penalty is imposed on offenders by the National Bank of the Republic of Kazakhstan or a court, in the case of a court hearing.  

     Part 3 of the commented article establishes administrative liability for violation by the issuer of the conditions and procedure established by the legislation of the Republic of Kazakhstan for issuing and (or) placing non-governmental equity securities on the territory of a foreign state, and (or) inclusion of non-governmental equity securities in the list of securities of a stock exchange operating in the territory of a foreign state.

     The objective side of the offense provided for in Part 3 of Article 261 of the Administrative Code is that the offender commits unlawful acts (inaction) in the form of:

     1) violations of the terms and procedure for the issuance and (or) placement of non-governmental equity securities on the territory of a foreign state, and (or)  

     2) violations of the inclusion of non-governmental equity securities in the list of securities of a stock exchange operating in a foreign country.

     The conditions and procedure for issuing and (or) placing equity securities on the territory of a foreign state, as well as for including equity securities in the list of securities of a stock exchange operating on the territory of a foreign state, are established in Articles 22-1 of the Law of the Republic of Kazakhstan "On the Securities Market".

     Violation by the issuer of the terms and procedure for the issue, placement and (or) inclusion of equity securities in the list of securities of a stock exchange on the territory of a foreign state constitutes a complete offense provided for in Part 3 of the commented article.

     For the commission of an offense provided for in Part 3 of the commented article, the perpetrators are subject to punishment in the form of a fine.  

     The fine for legal entities for committing an offense under Part 3 of Article 261 is 50% of the amount of money received from the placement of equity securities.

     The amount of the fine is not subject to change by the body imposing it.  

     This penalty is imposed on offenders by the National Bank of the Republic of Kazakhstan or a court, in the case of a court hearing.  

     Part 4 of the commented article establishes administrative liability for violation by the issuer of the requirements for state registration of the issue of non-governmental equity securities, repeated (two or more times within twelve consecutive calendar months) violation by the issuer of the conditions for the issue of non-governmental bonds established by the legislation of the Republic of Kazakhstan on the securities market.

     The objective side of the offense provided for in Part 4 of Article 261 of the Administrative Code is that the offender commits unlawful acts (inaction) in the form of:

     1) violations of the requirements for state registration of the issue of non-state equity securities;

     2) repeated violations of the conditions for the issue of non-government bonds established by the legislation of the Republic of Kazakhstan on the securities market.

     According to paragraph 1 of Article 8 of the Law of the Republic of Kazakhstan "On the Securities Market", the state registration of the issue of non-governmental equity securities is carried out by the authorized body on the terms and in accordance with the procedure established by the cited Law and regulatory legal acts of the authorized body.

     For the state registration of non-state equity securities, requirements are imposed on their issuer, failure to comply with which forms the final composition of the offense provided for in Part 4 of the commented article.

     In addition, Article 15 of the Law of the Republic of Kazakhstan "On the Securities Market" establishes the conditions for the issue of non-government bonds.

     The repeated violation by the bond issuer of the above-mentioned legally established conditions for the issue of non-government bonds also forms the final composition of the offense provided for in Part 4 of the commented article.

     Repeated violations of the terms of issue of non-government bonds should be understood as their violation two or more times within twelve consecutive calendar months.

     For the commission of an offense provided for in Part 4 of the commented article, the perpetrators are subject to punishment in the form of a fine.  

     Depending on the legal status of the offender and the business category to which he belongs, the amount of the fine is:  

     - for small and medium-sized businesses - 400 MCI;  

     - for large business entities - 500 MCI.

     The amounts of fines for each of the above categories of subjects of an offense are fixed and are not subject to change by the body imposing them.  

     This penalty is imposed on offenders by the National Bank of the Republic of Kazakhstan or a court, in the case of a court hearing.  

Scientific and practical commentary to the Code of the Republic of Kazakhstan on Administrative Offences (article-by-article) from the Author's team:

     Bachurin Sergey Nikolaevich, Candidate of Law, Associate Professor – chapter 48 (co-authored with E.M. Khakimov);

     Gabdualiev Mereke Trekovich, Candidate of Law – Chapters 11, 21, 22, 23;

     Zhusipbekova Ainur Maratovna, M.yu.n. – chapter 13 (co-authored with Karpekin A.V.); chapters 33, 39 (co-authored with Seitzhanov O.T.);  

     Karpekin Alexander Vladimirovich, Candidate of Law, Associate Professor – chapter 13 (in collaboration with Zhusipbekova A.M.);

     Korneychuk Sergey Vasilyevich – chapters 2; chapter 6 (co-authored with O.T. Seitzhanov, E.M. Khakimov); chapter 8; chapter 25 (co-authored with E.M. Khakimov); articles 457-470, 488, 488-1, 491-506; chapters 28, 30, 52;

     Ilya Petrovich Koryakin, Doctor of Law, Professor – Chapter 49;

     Kisykova Gulnara Bauyrzhanovna, Candidate of Law – chapter 20;

     Omarova Botagoz Akimgereevna, Candidate of Law – chapters 17; chapter 18 (co-authored with B.A. Parmankulova); chapters 26, 31; chapter 32 (co-authored with B.A. Parmankulova);

     Parmankulova Bayan Askhanbaevna – chapter 18 (co-authored with Omarova B.A.); chapters 19, 32 (co-authored with Omarova B.A.); chapter 43 (co-authored with Tukiev A.S.);  

     Podoprigora Roman Anatolyevich, Doctor of Law, Professor - Chapter 24, articles 489, 489-1, 490;

     Porokhov Evgeny Viktorovich, Doctor of Law – Chapters 14, 15, 16, 29, articles 471-475;

     Seitzhanov Olzhas Temirzhanovich, Candidate of Law, Associate Professor, – chapter 4; chapter 5 (co-authored with E. M. Khakimov); chapter 6 (co-authored with S.V. Korneychuk, E.M. Khakimov); chapter 9; chapter 10 (co-authored with B.E. Shaimerdenov, V.V. Filin); chapter 33 (co-authored with Zhusipbekova A.M.); chapter 36 (co-authored with Shaimerdenov B.E.); chapter 39 (co-authored with Zhusipbekova A.M.);

     Smyshlyaev Alexander Sergeevich, PhD. – chapters 38, 40, 42, 43-1 (co-authored with A.S. Tukiev); chapter 44;

     Aslan Sultanovich Tukiev - Candidate of Law, Associate Professor – chapters 1, 3, 35; chapters 38, 40, 42, (co-authored with A.S. Smyshlyaev); chapter 43 (co-authored with B.A. Parmankulova); chapter 43-1 (co-authored with A.S. Smyshlyaev); chapter 44-1 (co-authored with Shipp D.A.); chapter 45; 46 (co-authored with Shipp D.A.); chapter 47;  

     Filin Vladimir Vladimirovich, Candidate of Law, Associate Professor – Chapter 10 (in collaboration with O.T. Seitzhanov, B.E. Shaimerdenov);  

     Yerzhan Maratovich Khakimov, M.yu.n. – chapter 5 (co-authored with O.T. Seitzhanov); chapter 6 (co-authored with O.T. Seitzhanov, S.V. Korneychuk); chapter 7; chapter 25 (co-authored with S.V. Korneychuk); chapters 34, 41; chapter 48 (co-authored with S.N. Bachurin); chapter 53;

     Shaimerdenov Bolat Yerkenovich, M.yu.n., – chapter 10 (co-authored with O.T. Seitzhanov, V.V. Filin); chapter 12; articles 476-487, 507-509; chapter 36 (co-authored with O.T. Seitzhanov); chapters 37, 50, 51.  

     Shipp Denis Alekseevich – chapters 44-1, 46 (in collaboration with A.S. Tukiev).

Date of amendment of the act:  01.01.2020 Date of adoption of the act:  01.01.2020 Place of acceptance:  100050000000 Authority that adopted the act: 103001000000 Region of operation:  100000000000 NPA registration number assigned by the regulatory body:  5 Status of the act:  new Sphere of legal relations:  029000000000 / 028000000000 / 029002000000 / 028004000000 / 029001000000 / 026000000000 / 001000000000 / 001008000000 / 030000000000 The form of the act:  COMM / CODE Legal force:  1900 Language of the Act:  rus  

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