Kazakhstan prepares for AFIC Launch in cooperation with Shanghai Stock Exchange and NASDAQ

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By Dr Shahid Qureshi -: –

The Astana International Financial Centre (AIFC) In December 2015 President of the Republic of Kazakhstan Nursultan Nazarbayev signed the Constitutional law “On the Astana International Financial Centre” (AIFC). The aim of the AIFC is to form a leading international centre of financial services. For the first time in post-Soviet region Common law framework has been introduced in the AIFC. English is the official language of the AIFC.

The objectives of the AIFC are to attract investment into the economy through the establishment of an attractive environment for investment in the financial services, to develop local capital markets, to ensure their integration with the international capital market, and to develop markets for insurance and banking services and for Islamic financing in the Republic of Kazakhstan. www.aifc.kz

Astana International Exchange (AIX). In October 2017 during the meeting of the Board of Directors of AIFC, a decision to create AIX was taken. The main strategic partners of AIX are the Shanghai Stock Exchange and NASDAQ, which provided a technical platform. Shanghai Stock Exchange and NASDAQ are among the five largest exchanges in the world. The role of the AIX is to enable domestic and regional development, through the mobilisation of domestic resources and foreign portfolio flows. In doing so, the exchange promotes good governance through its business practices. www.aix.kz

Earlier today AIX announces appointment of Chief Executive Officer together with two senior appointments as it prepares for launch. The Board and Shareholders of Astana International Exchange (hereinafter – AIX) is pleased to announce the appointments of Timothy Bennett as Chief Executive Officer, Arman Tastanbekov as Chief Legal Officer and Member of the Management Committee and Jean-Philippe Louvancour as Head of Regulation and Compliance of Astana International Exchange.

Mr. Bennett was most recently CEO of NZX, the operator of New Zealand’s securities and derivatives markets and provider of trade, post-trade and data services. Mr. Bennett led NZX through a period of significant organizational and regulatory change, including the replacement and upgrading of NZX’s trading and clearing systems, and the launch of 23 ETF’s through NZX Funds Management.

During his time at NZX, the New Zealand government privatized a number of state owned business, driven in part by the desire to further develop New Zealand’s capital markets as a key driver of economic growth. This experience will be invaluable as Kazakhstan embarks on a similar privatization program.

Prior to joining NZX, Mr. Bennett was a Partner with Oliver Wyman and the Boston Consulting Group in Asia. His consulting experience includes strategy and capital market development for governments and exchanges in Asia and the Middle East, and the development of commodity derivatives markets, most notably iron ore.

Mr. Bennett commented that: “I am excited by the prospect of supporting the development of Kazakhstan’s capital markets through the launch of AIX and AIFC more broadly, AIX will be developed, managed and regulated to international standards to ensure we build both domestic and global investor confidence.”

Mr. Nurlan Kussainov, Chair of AIX and CEO of AIFC, commented “AIX has undertaken a thorough global search and selection process and very pleased to have attracted a someone with Tim’s deep global experience exchange and capital markets experience to lead AIX”.

Mr. Tastanbekov has a broad experience as an international legal advisor having worked for more than 17 years as Associate and Partner for prominent international law firms and country lead counsel for a FTSE100 company. Mr. Tastanbekov is admitted to practice law in the Republic of Kazakhstan and the State of New York (USA). His practice focused on capital markets and M&A across key sectors of the economy in Kazakhstan and the region.

Mr. Tastanbekov commented: “I’m honoured and excited to be chosen for this challenging role. I look forward to working closely with AIX, AIFC, and other stakeholders to help AIX become a market of choice for Kazakhstani and international issuers.”

Mr. Louvancour has a broad international career at financial institutions, including NYSE Euronext, Societe Generale and Kleinwort Hambros. As Head of Regulation and Compliance Department he will be responsible for regulating AIX’s markets, issuers and trading members under the self-regulatory model approved by the Astana Financial Services Authority.

Mr. Louvancour commented: “I’m delighted to have been asked to lead Regulation and Compliance at AIX. My first priority will be to use my skills and experience to support the successful listing of companies and on-boarding of trading firms on AIX market. My long-term objectives are to ensure AIX to become a place of choice for worldwide investors and the reference venue for investing in Central Asia”.

Astana International Financial Centre develops strategic partnerships in cooperation with financial institutions of China. The Astana International Financial Centre (hereinafter referred to as AIFC) signed several memorandums with financial institutions of the People’s Republic of China within the framework of the visit of the President of the Republic of Kazakhstan Nazarbayev to PRC.

AIFC Governor Kairat Kelimbetov and the Executive Vice President of Bank of China Ren Deqi signed a memorandum on strategic cooperation. The parties intend to jointly explore new opportunities for further development of cross-border business to provide high-quality services and develop new banking products.

“The Bank of China is one of the world’s leading financial institutions, so its expertise is important for the establishment of AIFC as a regional hub for financial services. The global network of the Bank’s partners will help attract the latest financial technologies to the AIFC,” says K.Kelimbetov.

A memorandum on strategic partnership with the Silk Road Fund (SRF) was also signed during the visit. The document is designed to promote the development and prosperity of the two countries’ economies by providing investment and financial services through equity and investment funds.

An important event timed to the visit of the President of the Republic of Kazakhstan Nazarbayev was also a joint statement of the parties on the opening of a representative office of the China Development bank (hereinafter – the CDB) on the AIFC site. It will be the first representative office of the CDB in Central Asia and the seventh in the world, including offices in London, Moscow, Rio de Janeiro, etc.

The official presence of the CDB in Astana will help deepen practical cooperation with Kazakhstan by providing long-term and stable financial support to organizations and enterprises of the Republic of Kazakhstan.

AIFC’s goals are to assist in attracting investments in the country’s economy by creating an attractive environment for investing in financial services, developing the securities market of the Republic of Kazakhstan, ensuring its integration with international capital markets. AIFC also intends to develop the market of insurance, banking services and the market of Islamic finance in the country.

Bank of China is a commercial bank, one of the five largest state-owned banks in China. It ranks second in the country in terms of assets, is one of the twenty largest banks in the world. Has more than 13 thousand offices in China and 550 offices in 25 other countries.

The Silk Road Foundation was established in December 2014. The Fund’s reserves amount to 40 billion dollars, which is formed on the basis of the PRC’s gold and foreign exchange reserves, as well as the assets of the China Investment Corporation (CIC), Development Bank and Export-Import Bank of China.

The Silk Road Fund invests in projects in the states and regions covered by the One-Way, One-Way initiative (The Economic Belt of the Silk Road and the Silk Road of the 21st Century). Investments are medium- and long-term, preference is given to large-scale projects, a special place is occupied by projects of an infrastructural nature.

The Fund identified “four major areas”, in particular investment projects in the field of infrastructure construction, energy development, industrial production and financial cooperation.

The China Development Bank was established in March 1994 with headquarters in Beijing. The authorized capital of the bank at the time of establishment was 50 billion yuan (over 6 billion US dollars).

It is the largest of China’s three state development banks (in addition to the Export-Import Bank of China and the China Development Bank of China, directly subordinate to the State Council of China.) It is also the only financial institution, which has the status of the Ministry.

The main functions of the Bank include support and construction of basic industries, support for the development of individual territories (provinces), financial support for the activities of leading state corporations, including their investment activities; performance of duties on loans of international financial organizations, etc.

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