AIFC: THE FINANCIAL HUB OF THE REGION DEDICATED TO ASTANA 20 TH ANNIVERSARY

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1 AIFC: THE FINANCIAL HUB OF THE REGION DEDICATED TO ASTANA 20 TH ANNIVERSARY

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4 TABLE OF CONTENTS 1. FOREWORD HE the President of the Republic of Kazakhstan HE the Governor of the AIFC 2. OVERVIEW Kazakhstan Financial Hub of the Region 3. HIGHLIGHTS OF THE AIFC ESTABLISHMENT ASTANA FINANCE DAYS

5 5. LEGAL AND REGULATORY FRAMEWORK 6. ORGANISATIONAL STRUCTURE Core Bodies and Institutions: Management Council Astana International Financial Centre Authority Astana Financial Services Authority Court International Arbitration Centre Astana International Exchange Expat Centre Bureau for Continuing Professional Development FinTech Hub 7. STRATEGIC PILLARS Capital Markets Asset Management FinTech Islamic Finance Private Banking Green Finance 8. ASTANA DESTINATION FOR BUSINESS Smart Astana Green Finance Hub Tax Advantages Single window principle Air Connectivity GFCI Real Estate AIFC: the financial hub of the region 3

6 CHAPTER FOREWORD

7 HE THE PRESIDENT OF THE REPUBLIC OF KAZAKHSTAN NURSULTAN NAZARBAYEV Since attaining independence, our country has achieved significant success in its development. Our economy has grown more than 20 times. The country has accumulated about 90 billion dollars of international reserves. The volume of foreign investment attracted has reached 300 billion dollars. We continue introducing the structural institutional reforms, implementing the programs of industrialisation, infrastructure development and privatisation, as well as performing an accelerated technological modernisation and digitalisation of the economy. Our main goal is to ensure the sustainable growth of the economy and welfare of the population so that our country entres the list of the top 30 developed countries of the world. We have successfully organised the EXPO 2017: Future Energy International Specialised Exhibition. And now, based on the EXPO infrastructure, the Astana International Financial Centre is commencing its work. Exclusive institutional conditions have been created that have no analogues not only in Kazakhstan, but also in the CIS territory. First, the AIFC is the only centre in the region with a special legal regime that will operate based on English Law. Moreover, its participants are granted tax privileges for up to 50 years. There are simplified currency, visa and labour regimes. The AIFC Independent Court and International Arbitration Centre will guarantee the protection of rights to all investors and businesses. Besides this, the Astana International Financial Centre has created a high-technology stock exchange, with shareholders such as the Shanghai Stock Exchange and the American Nasdaq Stock Exchange. As part of the large-scale privatisation, the assets of the largest mining, metallurgical, oil and gas, energy, transport and other enterprises of our Republic will be listed there. In general, the AIFC has every chance of becoming a regional financial hub and a centre for the development of green, Islamic and innovative financial instruments. AIFC: the financial hub of the region 5

8 HE THE GOVERNOR OF THE ASTANA INTERNATIONAL FINANCIAL CENTRE KAIRAT KELIMBETOV The changing dynamic in current economic trends indicate major shifts in the level of emphasis placed upon conventional development frameworks. Emerging markets are gaining greater dominance in shaping global economic growth. Kazakhstan has a great potential for showcasing its competitiveness and attractiveness on the regional and global stage. The geographic and socio-economic aspects of the country set a solid foundation for an extensive integration with global markets. Today, the country plays a strategic role in recreating a trade corridor connecting East and West through China s Belt and Road initiative. Astana, in particular, has a tremendous opportunity to become a delivery point for the Belt and Road infrastructure financing office. The establishment of the Astana International Financial Centre, which was initiated by His Excellency the President of the Republic of Kazakhstan Nursultan Nazarbayev as an important component of nation-wide economic and institutional reform, plays a key role in enhancing economic growth and further enabling the structural diversification of strategic directions. The launch of the AIFC is part of the 100 Concrete Steps programme aimed at attaining a sustainable and prosperous social and economic future. In the face of low commodity prices and global uncertainties in foreign markets, the development of a world-class financial centre is the timely and justified initiative to achieve a new level of growth through diversification and innovation. The AIFC concept is quite promising, with its high-tech, innovative and efficient platform that provides services based on international standards, thus increasing trading volume and revenue as well as expanding into new asset classes and revenue diversification in the long run. The primary objective of the AIFC is to develop a liquid and well-balanced capital market with a broad range of financial instruments. The AIFC is a oneof-a-kind platform in the region offering multidimensional access to capital and a wide range of financial services and investment tools. With its infrastructure, adherence to the best international 6 Foreword

9 practices, instruments and independent legal system, the AIFC will help transform the perception of Kazakhstan by the global investment community, thus stimulating the growth of foreign investment in the country and positioning Kazakhstan s financial sector at a higher level among the leading multinational corporate states worldwide. In commemorating the successful launch of the AIFC, which coincides with the 20 th anniversary of Astana this year, we are honoured to be hosting the AIFC Official Launch on 5 July, Moreover, the AIFC shall host Astana Finance Days, a new multi-day event designed to promote discussion on different aspects of financial services. Astana Finance Days is a historically significant event, that will allow sharing our plans and long-term vision, demonstrating our credentials and comparative advantages, as well as engaging global industry specialists in the most trending discussion topics. AIFC: the financial hub of the region 7

10 CHAPTER OVERVIEW

11 KAZAKHSTAN FINANCIAL HUB OF THE REGION FINLAND Russian Federation Astana Kazakhstan CHINA Western Europe Western China transcontinental auto corridor Kazakhstan is ranked 35 th among 190 nations in the category ease of doing business. Kazakhstan is also marked as the best reformer for the 4 th time with the implementation of 7 business reforms in: the process of starting a business; obtaining of construction permits; getting electricity; the protection of minority investors; resolving insolvency; trading across borders. 78 EASE OF DOING BUSINESS RANKING 35 (compared to 2016) New Zealand South Korea Ireland France Kazakhstan Russia Turkey China AIFC: the financial hub of the region 9

12 SUSTAINED HIGH GROWTH GDP PER CAPITA AT CURRENT PRICES 18 th MOST FAVOURABLE TAX REGIME AMONG 189 ECONOMIES Thousands USD '15 '16 '17 '18 '19 '20 '21 '22 10 Overview

13 EFFICIENT AND SKILLFUL WORKFORCE Kazakhstan is the only country in the region that has a high efficiency of the labour market, holding 20 th place among the 138 countries on this indicator and 38 th place in terms of pay and productivity ratio. FDI INFLOW Billions USD '10 '11 '12 '13 '14 '15 '16 Kazakhstan is a prosperous, safe and rapidly developing country. With its future-oriented strategy to retain emphasis on acquiring greater standards and successfully implementing vastly creative potential in the present-day agile world, Kazakhstan remains one of the most stable and dynamically growing economies on the global market. Being part of the Eurasian Economic Union, Kazakhstan shall become the financial gateway of Eurasia and a hub for financial intermediation. It will also enhance the investment climate across the region. Kazakhstan s macroeconomic outlook shows steady but exceedingly ascending growth patterns, with its indicators undergoing a stable rise. The country s GDP growth rate remains at a constant 4 % increase on average. A sectoral review of the 2016 results showed that the growth momentum was supported by the service sector 60.8 %, industry 34.4 % (oil, mining, coal, uranium, construction and machinery) and agriculture 4.8 %. Kazakhstan s economy is now becoming less dependent on commodity sectors. The gross inflow of FDI has been growing steadily since 2005, reaching USD 20.6 billion in One of the components of the FDI inflows are the earnings reinvested by non-residents, the total volume of which exceeded USD 4.9 billion in With the growth of incomes of joint Kazakhstan enterprises, foreign investors are focused at increasing the share of their income left in the country to finance the production activity of enterprises. The Government of Kazakhstan reinforces investment projects by imposing strong incentives such as favourable tax regimes, simplified processes for foreign businesses, as well as greater access by local enterprises. AIFC: the financial hub of the region 11

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15 Kazakhstan ranks relatively high on the Global Competitiveness Index, showing significant results in 13 indicators (top 30) including government policymaking transparency and investor protection strength. Moreover, Kazakhstan is rated 18 th in terms of favourable tax climate among the tax regimes of 189 economies. Great emphasis is placed upon encouraging knowledge and education, with an array of Government scholarship programs and subsidies. Kazakhstan is currently ranked 29 th out of 130 economies in the level of Human Development. Being the centerpiece of the land-based component of the New Silk Road, Kazakhstan can fully capitalise on the Belt and Road Initiative, which is oriented at enhancing trade and political relations between Europe and Asia. The initiative, deemed as the biggest project with the most regional collaboration and the largest infrastructure built-out in the history, can reshape the global trade. The AIFC, in particular, serves as a unique delivery unit for the Belt and Road Initiative infrastructure. Kazakhstan has a great opportunity to generate revenue from the transit of goods, integrate into the international trade system, and diversify transportation routes. Apart from the direct benefits, Kazakhstan will significantly improve its domestic transport connectivity, thus providing a positive influence on the development of related services and infrastructure manufacturing. The new waves of privatisation encompassed in the Comprehensive Privatisation Plan by the Samruk-Kazyna National Fund set an objective to facilitate the optimisation of the asset structure of the Fund, improving corporate governance, and enabling transparency, technology and knowledge transfer, the development of small and medium enterprises, to name a few. Kazakhstan s privatisation program presents a great opportunity for global investors. The Astana International Exchange will provide a platform for highly anticipated IPOs of thetelecom company, uranium company, flagship air carrier, railway operator, petroleum company, power generation company, mining company, etc. There are ongoing strong efforts to diversify the economy away from resources by encouraging investment into non-extractive industries to bolster the resilience of the economy against external shocks in the long run. In the globalising modern world, sovereign states find themselves dependent on each other. The government of Kazakhstan, in turn, signified this paradigm by establishing close relations and cooperation with all the countries, being guided by the principles of a multi-vector foreign policy. AIFC: the financial hub of the region 13

16 CHAPTER HIGHLIGHTS OF THE AIFC ESTABLISHMENT

17 2015 May Steps of the 100 Concrete Steps National Plan: to establish the Astana International Financial Centre as a financial hub of the region May Decree of the President of the Republic of Kazakhstan On the Astana International Financial Centre dated 19 May 2015 December Constitutional Statute of the Republic of Kazakhstan On the Astana International Financial Centre dated 7 December 2015 December The Astana International Financial Centre Authority is created December Decree of the President of the Republic of Kazakhstan On approval of the Statute on the Astana International Financial Centre Management Council and its composition dated 31 December 2015 December Decree of the President of the Republic of Kazakhstan On determination of the boundaries of the territory of the Astana International Financial Centre dated 28 December May The AIFC Management Council determines the AIFC Development Strategy and the Structure of the AIFC bodies May Panel Session during the 2016 Astana Economic Forum: International Experience in Economic Growth: Mechanisms and Instruments for Astana International Financial Centre Development May The 29 th Plenary Session on the AIFC Development of the Foreign Investors Council chaired by the President of the Republic of Kazakhstan 2017 January The Astana Financial Services Authority is established as the independent regulator of both financial and non-financial services activities in the AIFC March The AIFC Bureau for Continuing Professional Development is established March The AIFC hosts the 2017 IFN CIS Forum March The Governor of AIFC Kairat Kelimbetov was appointed as the Governor of the Islamic Development Bank (IsDB) Group for Kazakhstan July The Finance Accreditation Agency (FAA) of Malaysia in partnership with AIFC organised in Astana the Certified Training Professional (CTP) programme for Islamic finance trainers. September The AIFC holds the awards ceremony of the 7 th Global Islamic Finance Awards (GIFA) October The AIFC Expat Centre is established November The Astana International Exchange (AIX) is established November The Green Finance Concept and Strategy is adopted by the AIFC Authority December The AIFC Court and International Arbitration Centre are established December AIX onboarded strategic partners Shanghai Stock Exchange and Nasdaq December The AIFC becomes a full member of the Islamic Financial Services Board (IFSB) and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) December Adoption of the AIFC General Legal Framework Acts 2018 January The official launch of the AIFC activities January The AIFC organises a certification programme on Islamic finance in collaboration with the Bahrain Institute of Banking and Finance (BIBF) and the Chartered Institute for Securities & Investment (CISI) February The AIFC becomes a member of the General Council for Islamic Banks and Institutions (CIBAFI) February AFSA signs its first MoU with the China Securities Regulatory Commission (CSRC) February AFSA signs a MoU with the regulator of the Abu Dhabi Market on FinTech co-operation February AIX adopts the AIX Rules Book including the Green Bonds and Islamic financial instrument Rules March The AIFC Advisory Council on Islamic Finance was established March Launch of the International FinTechStars Acceleration program with international partner Seedstars April AIX receives its license from AFSA April The Astana Financial Services Authority is accepted as an associate member of the International Organization of Securities Commissions (IOSCO) June The AIFC Green Finance Centre is established July FinTechStars Acceleration Programme Demo Day for startups and international investors and angles July The AIFC organizes the Astana Finance Days July The AIFC Official Launch AIFC: the financial hub of the region 15

18 CHAPTER ASTANA FINANCE DAYS

19 In light of the successful launch of the AIFC, within the framework of the 20 th anniversary of Astana, Official Launch is to be held on 5 July, with the participation of President Nursultan Nazarbayev. Within the scope of the AIFC Official Launch, the Astana Finance Days (AFD) multi-day event will take place from 3 July to 5 July, 2018, in Astana, as part of the official presentation of the Astana International Financial Centre. The purpose of the event is to create an open platform for the discussion of current issues and global economic trends. ASTANA FINANCE DAYS ARCHITECTURE JULY 3, 2018 DRAFT OF 27/06/2018 TIME HILTON ASTANA PARIS HALL HILTON ASTANA GENEVA HALL CONGRESS CENTER BEIJING HALL CONGRESS CENTER NEW YORK HALL CONGRESS CENTER MOSCOW HALL CONGRESS CENTER LONDON HALL CONGRESS CENTER OTYRAR HALL 09:30 11:00 Plenary Session of Green Growth Forum / GEWR'18 Attracting investors to the Kazakhstan`s investment story: privatization and more Embracing the Economics and the Diplomacy of the Silk Road General rules for data protection 11:30 13:00 Green Bonds case studies Alternative (geothermal) energy financing mechanisms Re-launching the capital market of Kazakhstan: building infrastructure for a single pool of liquidity Infrastructure Investment as an Asset Class Main conditions of the financial sector to adapt new products and technologies International Financial Centres & Smart Cities: A New Age in Urban Development Transformers Roadshow Opening Master Classes 14:00 15:30 16:00 17:30 Industry new opportunities in the waste sector Green Energy & Waste to Energy biogas Global Networks for a Sustainable Financial Sector Building a liquid stock exchange: new products and the role of artificial intelligence and digitalization Transparency, Reporting, Strategic Communication and Corporate Governance The New Age of Global Governance and Global Connectivity FInTechstars - Demo Day Ambitions of financial technologies in Kazakhstan STI Workshop Pitch Presentations Green Growth Forum ORGANIZERS AIFC / KAZWASTE Green Growth Forum Green Academy; KaukoInternational 2 nd International Capital Markets Forum Global Finance FinTech 2018 Transformers Roadshow: STI Competition AIFC / CICC AIFC / The Reinventing AIFC AIFC / IDB Bretton Woods Committee AIFC: the financial hub of the region 17

20 ASTANA FINANCE DAYS ARCHITECTURE JULY 4, TIME HILTON ASTANA PARIS HALL HILTON ASTANA GENEVA HALL CONGRESS CENTER BEIJING HALL CONGRESS CENTER NEW YORK HALL 09:30 10:30 ASTANA FINANCE DAYS PLENARY SESSION (CONGRESS CENTER) 11:00 12:30 Chemicals & Hazardous Waste: Safe Management & Gender Aspects Low-Carbon Cities: Smart Ecology for Smart Cities 10 years after; The Resilience of the Global Financial System Today 12:45 14:15 Solid Household Waste Management - the key to cities` prosperity. Can a city and waste "coexist peacefully"? Circular electronics: potential and development prospects in Kazakhstan and CIS countries Green Finance: China & G20 Initiatives The New Geography of Global Finance 15:15 16:45 A cyclical economy. Is the cycle of waste in the modern world possible? Core Planetary Resources: Water, People & Technology Long Term Capital - Financing the Future 17:00 18:30 Incentives and tools for the waste management development Green Growth Forum Presentation of Kazakh Edition of The Limits of Partnership: U.S.-Russian Relations in the Twenty-First Century by Angela Stent Development of Local Capital Markets in Central Asia: How Astana Can Become the Catalyst Global Finance ORGANIZERS AIFC / KAZWASTE; Center for Finance and Development, University Qinhua AIFC / The Reinventing Bretton Woods Committee GLOBAL FINANCE FORUM (3-4 JULY, CONGRESS CENTRE) The two-day Global Finance Forum from 3 July to 4 July will organise an exclusive discussion of key financial sector development issues. A series of panel sessions will facilitate an open dialogue on the development of financial centres, the sustainability of the financial system, the development of local capital markets and financial capital management. The forum will focus on Astana as the financial services hub for the Belt and Road Initiative and a significantexpertise and best-practices centre. The third item on the agenda is a new economy as part of the fourth industrial revolution. The panel sessions will shed light on modern regulators as well as global trends in financial technology, including cryptocurrency. The discussions will gather together representatives of central banks and regulators, academia, as well as heads of the largest financial institutions. The Global Finance Forum will also present a book on global financial system sustainability with essays by the panel speakers. 18 Astana Finance Days

21 ASTANA FINANCE DAYS ARCHITECTURE JULY 4, TIME CONGRESS CENTER MOSCOW HALL CONGRESS CENTER LONDON HALL CONGRESS CENTER OTYRAR HALL NAZARBAYEV CENTER 09:30 10:30 ASTANA FINANCE DAYS SESSION (CONGRESS CENTER) 11:00 12:30 Cultural Competence & English Proficiency: Keys to Better Communication for Improved Business Performance Financial Regulation in XXI Century Opening of Astana Islamic Economy Forum: Summit of Islamic Financial Institutions 12:45 14:15 The impact of blockchaintechnologies and crypto-currencies on the implementation of the coordinated macroeconomic policy and the formation of a Common financial market within the EAEU framework New Financial Markets in the age of the Fourth Industrial Revolution Islamic Finance: the Next Big Step Memo & Agreements Signing Ceremonies 15:15 16:45 17:00 18:30 EEC - AIFC: Horizons of Cooperation Presentation of the 25 th Anniversary of Interstate Bank Women in Tech What is money? What is Payment? Islamic FinTech: Driver for Islamic Finance Development Islamic Financial Industry Development: a view from inside Islamic Economy in the Technological Age Opening of the AIFC Law Conference; Panel on the AIFC Court Panel on the AIFC International Arbitration Centre; Panel on the AIFC Legal Framework Eurasian Cooperation Global Finance Astana Islamic Economy Forum AIFC Law Conference ORGANIZERS EEC / AIFC AIFC / The Reinventing Bretton Woods Committee AIFC AIFC GREEN GROWTH FORUM / GEWR`2018 (3-4 JULY, HILTON ASTANA) The International Energy Agency predicts that 44 trillion of energy investment dollars will be needed to keep the average global temperature rise to below 2C above pre industrial levels by the year 2100 as set out in the 2015 Paris Climate Agreement. Capital markets play an important role in achieving this goal. They can direct large-scale investments in sustainable projects: water treatment, waste management, renewable energy sources, clean transportation and others. The Green Growth Forum will discuss global trends in green financing: the role of green bonds as a key tool in the debt capital market, as well as the efforts of international networks and the financial sector in developing a low-carbon economy. Representatives of Kazakhstani and foreign political circles, UN programmes, international financial organisations, the Kazakhstani financial sector, development institutions, business communities are expected to attend the Forum. AIFC: the financial hub of the region 19

22 2 ND ASTANA INTERNATIONAL CAPITAL MARKETS FORUM (3 JULY, CONGRESS CENTRE) The 2 nd Astana International Capital Markets Forum is an essential event for those looking to understand the key trends and developments of Kazakhstani capital markets with a focus on privatisation strategies, liquidity and new products for boosting the liquidity. At this industry-leading conference, world-renowned business and opinion leaders, economists and financial decision-makers will come together for analysis, discussion and networking. The key topics to be discussed include: privatisation strategy, liquidity, green bonds, cryptocurrencies, artificial intelligence and digitalisation. AIFC LAW CONFERENCE (4 JULY, NAZARBAYEV CENTRE) The AIFC Law Conference will be held on 4 July 2018 at the Nazarbayev Centre Building in Astana during the official presentation of the AIFC. The aim of this conference is not only to introduce the AIFC Court and the AIFC International Arbitration Centre, and their services on dispute resolution, but to also provide an open platform for the discussion of contemporary issues and recent trends in litigation and legislative procedures. Moreover, it gives an opportunity to share knowledge, experiences, and future perspectives in dispute resolution. The conference shall cover discussions on topical issues relating to dispute resolution in the AIFC and its legal framework The panel will consider the following issues: services provided by the AIFC Court; alternative dispute resolution at the AIFC International Arbitration Centre; the AIFC legal framework that is based on the principles, legislation and precedents of the law of England and Wales and the standards of leading global financial centres. Some of the expected guests and speakers include Rt Hon. The Lord Woolf CH (Chief Justice of the AIFC Court), Barbara Dohmann QC (Chairman of the AIFC International Arbitration Centre), Michael Blair QC (Chairman of the AIFC Legal Advisory Council) and other leading personalities in the field of dispute resolution and financial law. Moreover, we expect attendance by participants from all over the world who are interested in the AIFC Court and International Arbitration Centre: politicians in the field of justice and courts from Kazakhstan and other countries; representatives of international courts and arbitration centres; representatives of leading companies, globally recognised law firms, leading universities; professors and lawyers; and other distinguished guests. GLOBAL SILK ROAD FORUM (2 3 JULY, PALACE OF PEACE AND HARMONY, PALACE OF INDEPENDENCE) The Global Silk Road Forum is an interactive forum for opening opportunities for trade, business and investment. Within the framework of the event, practical instruments of export to the Silk Road countries will be discussed. As well as investment attraction Astana Finance Days

23 AIFC and EBRD cooperate on developing the legal and regulatory framework of the Astana International Exchange (AIX).

24 EURASIAN COOPERATION (4 JULY, CONGRESS CENTRE) Key discussion topics include development within the Eurasian Economic Commission (EEC) and the role of the AIFC, as well as the impact of blockchain technologies and crypto-currencies on the implementation of the coordinated macroeconomic policy and the formation of a Common financial market within the Eurasian Economic Union (EAEU) framework. The period is expected to be an era of the implementation of blockchain technology and the development of cryptocurrency regulation when we will observe how different countries shall introduce legislative regulation on turnover, investment, and cryptocurrency trading; including ICO, cryptocurrency exchanges, and its taxation; the creation of a legislation framework for blockchain projects. The blockchain technology development and cryptocurrency agenda is an important issue for the member states of the EAEU and EEC. The objectives to create a common financial market and implement the digital agenda by 2025 within the EAEU framework are being performed. In addition, the wide use of cryptocurrency is likely to influence the monetary conditions and the macroeconomic stability in the EAEU countries and the EAEU as a whole. At year-end 2017, the EEC started a series of events in the EAEU countries to discuss the essence of the new phenomenon of cryptocurrency and blockchain technologies, its impact on the macroeconomic stability of the member states, and the opportunity to develop the common regulation approaches for cryptocurrency on the territory of the EAEU. The plenary session Impact of Blockchain Technologies and Cryptocurrencies on the Implementation of the Coordinated Macroeconomic Policy and the Formation af a Common Financial Market Within the EAEU Framework will be devoted to the following three key issues: The role of digital financial technologies in the transformation of traditional economy. The use of blockchain technologies and cryptocurrency in the EAEU member states. Government regulation of blockchain and cryptocurrencies: the experience of the EAEU member states. Deepening integration in the EAEU within the context of the development of digital financial technologies: prospects for the creation of the EAEU financial jurisdiction. The event will bring together the leading experts from the development institutions, government bodies, professional associations, research organisations, and financial institutions of the EAEU member states. The session will be moderated by the Member of the Board (Minister) for Integration and Macroeconomics of the EEC, Tatyana Valovaya. ASTANA ISLAMIC ECONOMY FORUM (3 4 JULY, CONGRESS CENTRE) The main goal of the forum is to conduct a comprehensive and representative discussion on the economic and geopolitical growth of Muslim countries, their role in the global economy, the perspectives for the emergence of the new markets, as well as to discuss modern technologies and innovations in the field of finance. The Forum will focus on the significance of Islamic finance, in support of one of the core pillars of the AIFC. The leading experts will discuss the main stages aimed at balanced economic growth by using the opportunities of Islamic finance and financial technologies to create a sustainable future. The Transformers Roadshow by the Islamic Development Bank (IsDB) will take place on July 3. The Transformers will provide a platform to accelerate STI-led development initiatives across IsDB member countries. On July 4, the forum will bring together captains of industry, leaders and representatives of international organisations, the 22 Astana Finance Days

25 leading Islamic financial institutions, as well as entrepreneurs, corporate executives and academics to discuss the current issues that affect and influence the global economy as well as explore new opportunities in the plenary sessions and business meetings. Among the Astana Finance Days participants are heads of states and governments, ministers, policy makers, prominent figures, famous economists, representatives of leading financial organisations, regulators, central banks, development institutions, as well as world-recognised personalities in the field of finance. To learn more about Astana Finance Days, please follow this link ASTANA FINANCE DAYS, 3 5 JULY 2018 PARTNERS LIST GENERAL PARTNER OFFICIAL PARTNERS GENERAL PARTNER OF AIFC DIGITAL EXHIBITION PARTNERS AIFC: the financial hub of the region 23

26 CHAPTER LEGAL AND REGULATORY FRAMEWORK

27 The fundamental purpose of financial regulation is to promote economic prosperity in a fair and transparent manner and in compliance with the common law principles and rules that treat investors and consumers equally. The approach of the AIFC is to be greatly accommodating to all the companies and create an ecosystem in which business can prosper. One of the goals of the AIFC is to deliver a legal and regulatory framework that complies with international standards, ensures high standards of behavior and creates a safe investment environment in which investors have confidence and business is trusted. LEGAL FRAMEWORK The Constitutional Statute of the Republic of Kazakhstan On the Astana International Financial Centre defines the AIFC as an area within the City of Astana determined by the President of the Republic of Kazakhstan where the special legal regime in the financial sphere established by the Constitutional Statute applies. The acting law of the AIFC is based on the Constitution of the Republic of Kazakhstan and consists of the Constitutional Statute, the AIFC Acts based on the principles, legislation and precedents of the law of England and Wales and the standards of leading global financial centres, which has been developed under the guidance of the AIFC Legal Advisory Council, and the acting law of the Republic of Kazakhstan, which applies in part to matters not governed by the Constitutional Statute and the AIFC Acts. To learn more about the AIFC Legal Framework, please follow this link The special legal regime is a free standing commercial law system, designed to enable an independent international financial centre to operate. Michael Blair QC Chairman of the AIFC Legal Advisory Council 3 Verulam Buildings In order to ensure the introduction of the best global practice and the transposition of the relevant law of England and Wales, the AIFC established the Legal Advisory Council which I have the honour to chair. Representatives of London law firms such as Baker McKenzie, Herbert Smith Freehills, Hogan Lovells International, Michelmores, Norton Rose Fulbright, and White & Case are members of the Legal Council. This is a unique feature involved in creation of the AIFC. AIFC: the financial hub of the region 25

28 LIST OF THE AIFC GENERAL LEGAL FRAMEWORK REGULATIONS AND RULES 1. AIFC Contract Regulations 16. AIFC Limited Partnership Regulations 2. AIFC Employment Regulations 17. AIFC Personal Property Regulations 3. AIFC Regulations on AIFC Acts 18. AIFC Regulations on Obligations 4. AIFC Companies Regulations 19. AIFC Regulations on Damages and Remedies 5. AIFC Court Regulations 20. AIFC General Partnership Rules 6. AIFC Arbitration Regulations 21. AIFC Dematerialised Investment Rules 7. AIFC General Partnership Regulations 22. AIFC Special Purpose Company Rules 8. AIFC Implied Terms in Contracts and Unfair Terms 23. AIFC Data Protection Rules Regulations 9. AIFC Security Regulations 24. AIFC Non-profit Incorporated Organisations Rules 10. AIFC Netting Regulations 25. AIFC Insolvency Rules 11. AIFC Payment System Settlement Finality Regulations 26. AIFC Companies Rules 12. AIFC Data Protection Regulations 27. AIFC Limited Partnership Rules 13. AIFC Non-profit Incorporated Organisations Regulations 28. AIFC Limited Liability Partnership Rules 14. AIFC Insolvency Regulations 29. AIFC Court Rules 15. AIFC Limited Liability Partnership Regulations 30. AIFC Arbitration Rules REGULATORY FRAMEWORK Fairness, transparency, investor protection, and confidence are the pillars upon which the Astana Financial Services Authority (AFSA) at the AIFC was founded. They are the hallmarks of good regulatory frameworks. In 2018, the AFSA will continue developing and strengthening its legal and regulatory framework that supports and inspires innovation by providing a platform to launch financial and regulatory technologies, products and services, as well as adopting a consultative and business friendly approach with those who wish to carry out any of the regulated ancillary and other activities offered within the AIFC. 26 Legal and regulatory framework

29 AIFC Authority and Bloomberg L.P. established mutually beneficial relations to increase the level of cooperation between the two organizations for the AIFC promotion as a financial hub on the international arena and creation a liquid capital market to attract investments.

30 LIST OF REGULATIONS, RULES AND DECREES DRAFTED AS PART OF THE FINANCIAL SERVICES FRAMEWORK 1. Regulations for the AIFC Financial Services Framework 11. AIFC Auditor Rules 2. AIFC General Rules 12. AIFC Prudential Rules for Insurance Intermediaries 3. AIFC Authorised Market Institutions Rules 13. AIFC Prudential Rules for Investment Firms 4. AIFC Market Rules 14. AIFC Islamic Finance Rules 5. AIFC Recognition Rules 15. AIFC Islamic Banking Business Prudential Rules 6. AIFC Business Conduct Rules 16. Decree of the Governor of AIFC Concerning the Terms of and the Procedure for Currency Transactions Related to the Provision of Financial and Professional Services in the Territory of the AIFC 7. AIFC Representative Office Rules 17. Employment AIFC Qualifications 8. AIFC Fee Rules 18. Decree of the Governor of AIFC Concerning Financial Services Exempt from Corporate Income Tax 9. AIFC Anti-Money Laundering, Counter-Terrorist Financing and Sanctions Rules 19. AIFC FinTech Sandbox Regulatory Guidance 10. AIFC Collective Investment Scheme Rules 28 Legal and regulatory framework

31 Shanghai Stock Exchange is a shareholder of the AIX. Shanghai Stock Exchange cooperates with the AIFC on strategy and technology consulting, business planning, product design, market expansion and liquidity growth. SSE also works closely with AIX to support the Belt and Road Initiative.

32 CHAPTER ORGANISATIONAL STRUCTURE

33 CORE BODIES AND INSTITUTIONS AIFC MANAGEMENT COUNCIL GOVERNOR AIFC AUTHORITY AIFC COURT ASTANA FINANCIAL SERVICES AUTHORITY INTERNATIONAL ARBITRATION CENTRE OTHER INSTITUTIONS ASTANA INTERNATIONAL EXCHANGE AIFC EXPAT CENTRE BUREAU FOR CONTINUING PROFESSIONAL DEVELOPMENT AIFC FINTECH HUB AIFC GREEN FINANCE CENTRE AIFC MANAGEMENT COUNCIL The Management Council is the supreme governing body of the AIFC, headed by the President of the Republic of Kazakhstan. The Council determines strategic directions for the development of the AIFC and fosters the development of favourable conditions for establishing the AIFC as a leading international financial centre. 1 The AIFC Development Strategy was determined by AIFC Management Council in accordance with paragraph 3 of Article 10 of the Constitutional Statute of the Republic of Kazakhstan "On the Astana International Financial Centre". During its first meeting in May, 2016, the Council defined the structure of the AIFC bodies and determined the AIFC Development Strategy until To learn more about the AIFC Management Council, please follow this link AIFC: the financial hub of the region 31

34 Nursultan Nazarbayev Chairman, President of Kazakhstan Bakytzhan Sagintayev Deputy Chairman, Prime Minister of Kazakhstan Dr. Jacob A. Frenkel CEO, JP Morgan Chase International Sir Suma Chakrabarti President, EBRD Herman Gref CEO, Sberbank of Russia Arkadiy Volozh Co-founder and CEO, Yandex Kairat Kelimbetov Governor of AIFC Bakhyt Sultanov Minister of Finance Timur Suleimenov Minister of National Economy Daniyar Akishev Governor of the National Bank 32 Organizational structure

35 ASTANA INTERNATIONAL FINANCIAL CENTRE AUTHORITY The AIFC Authority is the management body that was established to facilitate strategic development, the development of services in the territory of the AIFC, and the infrastructural management of the centre. The Authority is also committed to the advancement of the AIFC in the global markets, as well as the attraction of potential participants to the centre. The AIFC Authority aims to contribute to the development of Astana as a truly global international financial hub of the Central Asia, the Caucasus, the Eurasian Economic Union, the Middle East and Europe by providing high international standards in financial services, regulations and rule of law. In pursuing this, the AIFC Authority assesses all aspects of AIFC. The AIFC Authority ensures a safe investment ecosystem at AIFC, in which investors have confidence and business is trusted. By working at AIFC, participants enjoy a well-established corporate governance regime that promotes the best international standards and principles that are respected globally. One of the goals set at the AIFC Authority is to further enhance the role of global integration within the framework of the AIFC, as well as to promote the principle vision of AIFC worldwide, while establishing contacts with regulators and participants of international financial centres, foreign financial organisations and investment companies. Moreover, the AIFC Authority intends to support the growth of companies working with AIFC by providing a high quality and efficient management system and a sound set of services. To learn more about the AIFC Authority, please follow this link Nurlan Kussainov Chairman of the Management Board Kairat Aitekenov Deputy Chairman of the Management Board Marat Aitenov Deputy Chairman of the Management Board Yernur Rysmagambetov Managing Director, member of the Management Board AIFC: the financial hub of the region 33

36 ASTANA FINANCIAL SERVICES AUTHORITY The Astana Financial Services Authority is the integrated regulator of all regulated activities, market activities, ancillary services, companies and partnerships in the AIFC. Its mission is to establish an environment that delivers a fair and transparent financial and capital market in which individuals and institutions act with integrity. The vision of AFSA is to be a globally respected regulator of financial services in Eurasia delivering a legal and regulatory framework that demands high standards of behaviour, inspires innovation and creates a fair and safe environment in which investors have confidence and business is trusted. The AFSA aims to achieve its vision through its objectives that are enshrined in the Financial Services Framework Regulations (FSFR) and are consistent with those of peer regulators of international jurisdictions. REGISTRATION, AUTHORISATION AND RECOGNITION As an integrated regulator of the AIFC, the AFSA registers and incorporates entities that provide financial and non-financial service activities. There is no restriction on the types of activities a company can conduct as an AIFC Participant. The AFSA provides guidance prior to processing applications submitted by applicants who wish to establish a legal entity in AIFC in compliance with AIFC Rules and Regulations. The AFSA also accepts applications from persons located in a jurisdiction other than the AIFC to be a Recognised Non-AIFC Member. Recognition enables financial market infrastructures (trading platforms and clearing and settlement institutions), as well as qualified potential market participants (brokers) to be recognised to carry out their activities in the AIFC without having to establish a physical presence in the AIFC. Since the launch of the AFSA, it has been actively handling enquiries from prospective participants from Kazakhstan and the CIS countries, China, Europe and the USA interested to be registered and licensed in the AIFC jurisdiction. 34 Organizational structure

37 AIFC cooperates with MasterCard for introduction innovative payment technologies and development a cashless economy in the Republic of Kazakhstan.

38 PROCESS OF REGISTRATION, AUTHORISATION AND RECOGNITION APPLICANT AFSA DEPARTMENT FOR REGISTRATION AND LICENSING DOCUMENT CHECK Information to MoJ MINISTRY OF JUSTICE CHECK IN THE NATIONAL REGISTER ISSUANCE OF CERTIFICATE AND COMMERCIAL LICENSE* ASSIGNMENT OF BIN *Applicants intending to conduct financial services activities will be Authorised by the issue of a Regulatory License subject to the application assessment process conducted by the AFSA Department for Registration and Licensing. 36 Organizational structure

39 The AIFC and the Waves Platform cooperate in the creation of an advanced ecosystem for financial technologies using the latest blockchain platform. The parties support start-up companies in the field of financial and blockchain technology and provide them with access to blockchain solutions of Waves Platform, as well as attract foreign start-ups to the AIFC Acceleration Programme platform and jointly conduct training events.

40 THE CEO OF AFSA Stephen Glynn Chief Executive Officer & Board Member Mr. Stephen Glynn is a financial services regulator who has spent the last 13 years as a member of the executive team responsible for the development of the legal and regulatory framework of the Dubai Financial Services Authority (DFSA) and the Dubai International Financial Centre. During this time, he was a member of various committees of the International Organisation of Securities Commissions. Before joining the DFSA, Mr. Glynn served as the Managing Director of an Australian consultancy providing compliance and risk management services to the Australian Financial Services Industry. Earlier, he held various senior positions with the Australian Securities and Investments Commission. AFSA BOARD OF DIRECTORS Lady Barbara Judge CBE Chairman of the Board Mrs. Angela Knight CBE Deputy Chairman of the Board Lady Barbara Judge is an American-British lawyer and businesswoman with a broad, international career as a senior executive, chairman and non-executive director, in both the private and public sectors. She was the youngest ever commissioner of the US Securities and Exchange Commission. She is currently Chairman of CIFAS, the United Kingdom s fraud prevention service, and a former Chairman of the UK Atomic Energy Authority and the Pension Protection Fund. She is also a non-executive director of a number of other public and private Tech companies. In addition, she is the UK Business Ambassador on behalf of UK Trade & Investment. Mrs. Angela Knight currently serves as the Chair of the Office of Tax Simplification, an independent body of HM Treasury, is Chair of the Dublin based wealth management company Tilman Brewin Dolphin, is an independent director of the UK housebuilder Taylor Wimpy plc and is the senior independent director of TPICAP plc, the largest global inter dealer broker. Previously, Mrs. Knight served as Chief Executive of several organizations, including Energy UK, British Bankers Association, and the Association of Private Client Investment Managers and Stockbrokers. 38 Organizational structure

41 Dr. Iain Saville CBE Non-executive member of the Board Dr. Saville is an independent non-executive director, and chairs the risk committee of European Central Counterparty N.V. He has published on theoretical physics, and on monetary economics during a varied career for 20 years in the Bank of England. More recently, he has been a leader of the modernisation of the financial services industry, with innovations based on extensive capital markets expertise throughout the value chain in many major markets. Dr. Saville served as an independent Advisor and Director to the European Central Bank for 5 years on the design and delivery of the EU s securities settlement system, TARGET2. Previously, he was the founder and CEO of CREST (UK-based central securities depository), and an Executive Director of Computershare. Mr. Gregory Tanzer is a qualified solicitor and barrister with extensive financial regulator experience in Australia. He has served as a Commissioner of the Australian Securities and Investments Commission and Secretary General of the International Organization of Securities Commissions. Mr. Gregory Tanzer Non-executive member of the Board Dr. Akash Deep Non-executive member of the Board Dr. Akash Deep is Senior Lecturer in Public Policy at Harvard University s John F. Kennedy School of Government. He has served as Senior Economist at the Bank for International Settlements in Switzerland and been a consultant and expert for the World Bank, the International Finance Corporation, the United Nations, the European Bank for Reconstruction and Development, the Asian Development Bank, the Inter-American Development Bank, and the International Centre for Settlement of Investment Disputes. AIFC: the financial hub of the region 39

42 Mr. Masood Ahmed currently serves as President of the Centrer for Global Development. He has previously held several positions in the International Monetary Fund, and served as Director General for Policy and International Development at the UK Government s Department for International Development. Mr. Ahmed has also held various positions at the World Bank. Mr. Masood Ahmed Non-executive member of the Board Ms. Zere Seidimbek Non-executive member of the Board Ms. Zere Seidimbek is a Managing Director at the Astana International Financial Centre Authority and has been responsible for the development of the regulatory framework in the AIFC. Before joining the AIFC team, Ms. Seidimbek held senior executive positions at the Development Bank of Kazakhstan, Kazakhstan Public-Private Partnership Centre, Q-BRO (subsidiary company of the National Bank of Kazakhstan). Previously, she also served in the Sustainable Development Fund Kazyna, Centre for Marketing and Analytical Research and the Committee on Investments of the Ministry of Foreign Affairs of the Republic of Kazakhstan. To learn more about AFSA, please follow this link THE AIFC COURT From 1 January 2018, the independent AIFC Court and International Arbitration Centre (IAC) at the AIFC became operational. The AIFC Court provides the first common law court system of its kind in the region. It operates under the highest international standards to resolve civil and commercial disputes at the AIFC. It has exclusive jurisdiction for civil and commercial disputes, but not criminal or administrative disputes, arising out of the activities and operations of the AIFC and jurisdiction in the case of other disputes in which all parties agree in writing to give the AIFC Court jurisdiction. The AIFC Court is independent in its activities and is not a part of the judicial system of the Republic of Kazakhstan. It consists of a court of first instance and a court of appeal. In order to ensure the prompt resolution of lower value claims, the court of first instance has a special division known as the small claims court. The decisions of the AIFC Court of Appeal are final and are not subject to further appeal. To learn more about the AIFC Court, please follow this link 40 Organizational structure

43 AIFC is a full member of the Islamic Financial Services Board (IFSB). AIFC representative was appointed as the member of the IFSB Technical Committee. IFSB launched the Islamic Financial Stability Report 2018 at the Astana Islamic Economy Forum.

44 ASTANA INTERNATIONAL FINANCIAL CENTRE COURT 70 th step of the National Plan 100 concrete steps provides for the establishment of the independent court functioning on the principles of English law within the territory of the Astana International Financial Centre LEGAL BASIS JURISDICTION STRUCTURE COMPOSITION Constitutional Statute of the Republic of Kazakhstan "On Astana International Financial Centre" Resolution of the AIFC Management Council "On Astana International Financial Centre Court" disputes between AIFC Participants, AIFC Participants and AIFC Bodies and AIFC Participants or AIFC Bodies and their expat Employees disputes relating to activities conducted in the AIFC and governed by the Acting Law of the AIFC disputes trasferred to the AIFC Court by agreements of the parties COURT OF FIRST INSTANCE (including the Small Claims Court) FINAL COURT OF APPEAL CHIEF JUSTICE OF THE COURT 8 JUDGES REGISTRAR OF THE COURT REQUIREMENTS FOR THE JUDGES: not less than thirty years of age significant common law knowledge/experience as a qualified lawyer/judge in a common law system good character fluent in English language AIFC COURT ACTIVITIES - resolution of commercial and civil disputes within the competence of the AIFC Court; - strengthening of cooperation with foreign commercial courts; - holding of seminars, lectures and conferencess for the legal community of the Republic of Kazakhstan; - participation in international events and conferences; - promotion of the AIFC Court in international legal and investment communities; - integrated IT platform. ADVANTAGES OF THE AIFC COURT - judges of unique international repute and highly advanced professional experience in civil and commercial common law; - English language in judicial proceedings; - innovative IT including e-filing and virtual court; - procedural rules based on the principles of judicial proceedidings of England and international best practice; - wide rights of audience; - robust enforcement in the Republic of Kazakhstan and foreigh states in accordance with international treaties (PRC, India, Turkey, UAE, Pakistan, Russian Federation and other CIS states) The Rt. Hon. The Lord Woolf CH The Chief Justice of the AIFC Court The AIFC Court provides a common law court system for the first time in Eurasia. It operates to the highest international standards to resolve civil and commercial disputes in the AIFC. It has exclusive jurisdiction over disputes arising out of the activities and operations of the AIFC and jurisdiction in the case of other disputes in which all parties agree in writing to give the AIFC Court jurisdiction. 42 Organizational structure

45 AIFC and Thomson Reuters cooperate on enhancement of business partnerships through the exchange of information and experience for development of the major strategic directions of the AIFC.

46 AIFC COURT JUSTICES The Chief Justice and Justices of the AIFC Court have impeccable reputations and experience in the common law and international best practices and were appointed by the decree of the President of the Republic of Kazakhstan. The Rt. Hon. The Lord Woolf CH Chief Justice, AIFC Court The Rt. Hon. Sir Robin Jacob QC Justice, AIFC Court The Rt. Hon. Sir Rupert Jackson QC Justice, AIFC Court The Rt. Hon. Sir Jack Beatson FBA QC Justice, AIFC Court The Rt. Hon. Sir Stephen Richards Justice, AIFC Court Lord Woolf is one of the most influential judges in recent British legal history and a global figure on the common law, courts and dispute resolution, and legal education. He is a member of the House of Lords, and Deputy Chairman of the All- Party Group for the Rule of Law and Human Rights in the House of Lords. He was the first Lord Chief Justice to be President of the Courts of England and Wales, a Non-Permanent Judge of the Court of Final Appeal of Hong Kong and the first President of the Qatar Financial Centre Civil and Commercial Court. Sir Robin Jacob has specialist expertise in intellectual property law and commercial law. He previously served as a High Court Judge in the High Court of England and Wales, and as a Lord Justice of Appeal in the Court of Appeal of England and Wales. Sir Robin has been admitted to the Intellectual Property Hall of Fame. Sir Rupert Jackson served as a High Court Judge in the Queen s Bench Division of the High Court of England and Wales. He was the Judge in Charge of the Technology and Construction Court and a Lord Justice of Appeal in the Court of Appeal. Sir Jack Beatson was a Judge of the High Court of England and Wales and a Lord Justice of Appeal in the Court of Appeal of England and Wales. He served as the Law Commissioner for England and Wales and worked on law reform in areas including contract and commercial law, civil evidence, damages and financial services. Sir Stephen Richards has specialist expertise in competition law and regulatory law. He has served as a High Court Judge of the High Court of England and Wales and was the Presiding Judge for Wales. Sir Stephen was later a Lord Justice of Appeal in the Court of Appeal of England and Wales and Deputy Head of Civil Justice. 44 Organizational structure

47 The Rt. Hon. The Lord Faulks QC Justice, AIFC Court Andrew Spink QC Justice, AIFC Court Thomas Montagu- Smith QC Justice, AIFC Small Claims Court Patricia Edwards Justice, AIFC Court Christopher Campbell-Holt Registrar and Chief Executive, AIFC Court Lord Faulks QC is a member of the UK House of Lords. He has served as a Minister of State at the UK Ministry of Justice. He has worked as Chairman of the Professional Negligence Bar Association and Special Advisor to the UK Government Department for Constitutional Affairs. He is a member of the Chartered Institute of Arbitrators. Andrew Spink is joint Head of Chambers and leads the Commercial team at Outer Temple Chambers, a barristers chambers in London. He was appointed as a Deputy High Court Judge in the High Court of England and Wales and sits regularly in this capacity in the Queen s Bench Division and Chancery Division of that Court. Thomas Montagu- Smith QC practices as a barrister in London and internationally, having appeared in many of the leading cases. He has specialist expertise in international commercial law, arbitration, commercial fraud, insurance and reinsurance, construction, and professional negligence. Patricia Edwards practices as a barrister in London, and has broad commercial litigation and arbitration experience. She has specialist expertise on urgent interim relief measures, insurance law, aviation, banking, international trade, private international law, and intellectual property. Patricia was appointed to Tiers 1 and 2 of the Lloyd s Arbitration Scheme Arbitrators Panel. Christopher Campbell- Holt has many years of legal experience gained while living and working in the UK, the US, the Middle East, and Eurasia. He was the Registrar at the international financial centre commercial court and alternative dispute resolution centre in Qatar under the Presidency of Lord Woolf. He also worked at international and regional law firms and practiced broad international commercial law and dispute resolution. He is a member of the AIFC Legal Advisory Council and the AIFC Academic Council. He is a member of the Bar of New York State and is a CEDR accredited mediator. AIFC: the financial hub of the region 45

48 INTERNATIONAL ARBITRATION CENTRE The International Arbitration Centre (IAC) provides an independent, economical and expeditious alternative to court litigation, operating to the highest international standards to resolve civil and commercial disputes in the AIFC. The IAC has its own panel of outstanding international arbitrators and mediators who are greatly experienced, independent, impartial and of the highest integrity. The IAC offers parties maximum choice and flexibility in choosing the rules and procedures they wish to use for the resolution of their disputes at the IAC. Parties may agree for the IAC to: Administer their arbitration according to the IAC Arbitration and Mediation Rules. These rules include procedures for expedited arbitrations, the appointment of emergency arbitrators, and the resolution of investment treaty disputes; Administer their arbitration according to UNCITRAL Arbitration Rules or ad hoc arbitration rules; Administer mediations according to the IAC Arbitration and Mediation Rules or ad hoc mediation rules; Provide other forms of alternative dispute resolution. The IAC Chairman is an appointment authority, offering the appointment of arbitrators and mediators from the IAC panel, for arbitrations and mediations conducted at the IAC or elsewhere. Arbitration awards of the IAC are enforceable in the Republic of Kazakhstan as Decrees of the AIFC Court supported by a robust enforcement system. They are also enforceable internationally under the New York Convention. The procedures and standards at the IAC provide the latest world class efficient administration and will be familiar to users of arbitration and mediation services in major financial centres around the world. The IAC panel consists of 23 international arbitrators, 11 of whom are available as mediators (with experience from Hong-Kong, Singapore, Russia, United Kingdom, European Union, India, the Middle East, and the USA). The panel includes leading international arbitrators who have many years of experience in arbitration in the areas of subsoil use, trade, oil and gas, construction, energy, Islamic finance, banking, intellectual property law and other areas of commercial law. To learn more about the IAC, please follow this link 46 Organizational structure

49 The Governor of AIFC Kairat Kelimbetov was appointed as the Governor of the Islamic Development Bank (IsDB) Group for Kazakhstan. IsDB provided AIFC with the Technical Assistance Grant to develop the Islamic Finance Master Plan for Kazakhstan. IsDB in partnership with AIFC organised in July 2018 Transformers Roadshow: Science, Technology and Innovation Competition.

50 INTERNATIONAL ARBITRATION CENTRE 24 th step of the National Plan 100 concrete steps provides for the establishment of the International Arbitration Centre within the territory of the Astana International Financial Centre LEGAL BASIS Constitutional Statute of the Republic of Kazakhstan «On Astana International Financial Centre» Resolution of the AIFC Management Council «On International Arbitration Centre» ARBITRATION AND MEDIATION RULES The International Arbitration Centre Arbitration and Mediation Rules are based on the most up to date and efficient international standards to meet modern requirements of international and regional trade, inclusing provision for investment arbitration, appointment of emergency arbitrators and an expedited procedure. JURISDICTION The Indernational Arbitration Centre hears disputes on the basis of an arbitration agreement between the parties. MANAGEMENT CHAIRMAN-OVERALL MANAGEMENT REGISTRAR DAY TO DAY ADMINISTRATION AND CASE MANAGEMENT SERVICES Administering arbitration disputes and mediation according to the Arbitration and Meditation Rules of the International Arbitration Centre, under the UNCITRAL Model Rules, and under ad hoc rules agreed by the parties. Administering other forms of alternative dispute resolution by agreement of the parties. Other services in accordance with the resolution of the Astana International Financial Centre ManagementCouncil On International Arbitration Centre. ADVANTAGES OF ARBITRATION AND MEDIATION IN THE AIFC ACTIVITIES - settlement of disputes through arbitration, mediation, and other alternative dispute resolution; - strengthening cooperation with international arbitration institutions; - holding seminars, lectures and conferences for the legal community of the Republic of Kazakhstan; - participation in international events and conferences; - promotion in international legal and investment communities; - integrated IT-platform. - arbitrators of international level with impeccable reputation and wide professional experience; - modern IT-solution including for remote dispute resolution; - maximum choice to parties for arbitration rules including the IAC Rules, UNCITRAL Model Rules, and ad hoc rules; - enforcement of IAC decisions in the Republic of Kazakhstan and abroad in accordance with the New York Convention in the territory of 157 foreign states. 48 Organizational structure

51 Nasdaq is a shareholder, strategic partner and the technology provider of AIX. Nasdaq has delivered its state of the art trading technology to AIX which will provide international and domestic investors with easy and comfortable access to AIX s attractive financial instruments.

52 We aim to make the IAC the number one choice for the resolution of civil and commercial disputes by arbitration and alternative dispute resolution in the Eurasian region. Barbara Dohmann QC Chairman of the International Arbitration Centre at the AIFC Christopher Campbell-Holt Registrar and Chief Executive, IAC Barbara Dohmann QC has been one of the UK s leading commercial barristers and an international arbitrator for many years. She began her practice at the Bar of England and Wales in 1973 and was appointed the Queen s Counsel in She is a member of the London Court of International Arbitration. She has been appointed as arbitrator at the LCIA, at the London Metal Exchange (where she is an Arbitration and Arbitration Appeals Panel member), at the Paris International Chamber of Commerce, and at the Hong Kong International Arbitration Centre. She is a CEDR accredited Mediator. Christopher Campbell-Holt has many years of legal experience gained while living and working in the UK, the US, the Middle East, and Eurasia. He was the Registrar at the international financial centre commercial court and alternative dispute resolution centre in Qatar under the Presidency of Lord Woolf. He also worked at international and regional law firms and practiced broad international commercial law and dispute resolution. He is a member of the AIFC Legal Advisory Council and the AIFC Academic Council. He is a member of the Bar of New York State and is a CEDR accredited mediator. ASTANA INTERNATIONAL EXCHANGE The Astana International Exchange (AIX) was formed to transform the regional financial ecosystem. Based on globally-recognised technology platforms and an internationally-accepted regulatory environment, the initial focus of the AIX will be to provide a platform for the planned IPOs as part of the Kazakhstani government privatisation programme. AIX will provide seamless access to both global and local investors. Over time, the AIX plans to operate a range of different markets, including fixed income, equities and funds, with the aim of supporting the development of capital markets in the Central Asian region. The strategic partners of the AIX include the Shanghai Stock Exchange and Nasdaq, two of the world s leading stock exchanges. The relationship with SSE will boast market liquidity and provide the foundation for the participation of the AIX in China s Belt and Road Initiative. Nasdaq provides the AIX with state-of-the-art technology for both trading and market surveillance. To learn more about AIX, please follow this link 50 Organizational structure

53 AIX RULEBOOK GENERAL BUSINESS RULES PROSPECTUS RULES LISTING RULES MONITORING AND ENFORCEMENT RULES (INCLUDING DISCIPLINARY RULES) MEMBERSHIP RULES MARKET DISCLOSURE RULES ADMISSION AND DISCLOSURE STANDARDS TRADING AND DEFAULT RULES 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. Timothy Olivier Bennett Chief Executive Officer Astana International Exchange Mr. Bennett was CEO of NZX, the New Zealand Stock Exchange from Prior to the NZX, Mr. Bennett worked in South East Asia as a Partner at Oliver Wyman Singapore and Partner in the FS sector of the Boston Consulting Group. His stock exchange consulting experience covers: strategy development and capital market development in Asia/the Middle East; diversification and reorganisation of revenue streams; funds and risk management. AIFC: the financial hub of the region 51

54 AIFC EXPAT CENTRE As part of the creation of a favourable environment for foreigners, the AIFC Expat Centre (AEC) was established. AEC provides centralised access on the single-window principle to the AIFC international business partners, staff, as well as expatriates in Kazakhstan on a wide range of government and non-government services rendered in English. ѧ ѧ citizens of 45 countries were granted the right to a visafree entry to Kazakhstan for the period of up to 30 days (i.e. the OECD countries, Malaysia, Monaco, the UAE and Singapore); AIFC participants were granted the right to attract foreign workforce without obtaining a work permit; The AIFC has adopted a unique preferential migration and visa regime, which has allowed for the profound alleviation of the previous system in several ways: work visas, granted upon the invitations of the AIFC bodies and participants are now issued for up to 5 years. AEC SERVICES: Kazakhstan visa and migration related services Individual identification number (IIN) taxpayer registration and revenue related services Electronic digital signature (EDS to e-gov access) wide range of governmental services (more than 500) notary and translation services document photo services AEC call centre services guidance on real estate agencies, schools in Astana, etc. To learn more about AIFC Expat Centre, please follow this link BUREAU FOR CONTINUING PROFESSIONAL DEVELOPMENT The AIFC Bureau for Continuing Professional Development (BCPD) is a newly-established professional and development centre responsible for human capital development that provides opportunities for professional development and raising competencies for local professionals and creates a critical mass of highly-skilled and educated specialists in the region. The Bureau is mainly responsible for investment and financial literacy programmes related to the core pillars of the AIFC, including Capital Markets, Islamic Finance, FinTech, as well as Asset and Wealth Management. The Bureau had preliminarily indicated and identified to retrain over 5000 local professionals. The body identified up to 16 professional areas in which it plans to develop skills based on professional development programmes. Professional programmes consisting of soft, hard and functional skills are in line with the 52 Organizational structure

55 AIFC and the global payment technology company Visa cooperate with the view to developing the non-cash economy and AIFC FinTech ecosystem.

56 training programmes conducted at Central and Eastern Europe shared-services centres. Business communications, managerial coaching, time and project management are part of the soft-skills programme of the Bureau. International certifications such as CFA, ACCA, FRM, CIMA, etc. have been included as part of the hardskills programmes. The Bureau set a goal to be a part of the FinTech industry by growing up local professionals that can develop useful and competitive FinTech products and supply their expertise to the global market. The BCPD Career Centre shall build up the HR nerve system of the Bureau and constantly work with HR teams of AIFC bodies, participants, and other entities within the AIFC eco-system and beyond. Furthermore, the main responsibility of the Career Centre shall be to match the students of the AIFC BCPD and grant holders from the candidate reserve pool, human resource portfolio and a-pro with potential employees. The BCPD Media Centre will become an online version of BCPD that will aim to encompass a wider audience of general population and to increase the general level of investment literacy. To learn more about AIFC Bureau for Continuing Professional Development, please follow this link ANNUAL PROJECTS The Islamic Finance Week 2017 is a platform for sharing an international experience and build a constructive discussion of Islamic finance development issues in the region as well as to raise public awareness about the Islamic finance trends and instruments in the world. Be-A-Pro the first conference for the community of Kazakhstani professionals in finance & project management 54 Organizational structure

57 Open workshop for financial media and open platform for professional exchange & networking for financial media in Kazakhstan AIFC FINTECH HUB The AIFC FinTech Hub gives opportunity to solve today s FinTech challenges with tomorrow s solutions. The AIFC FinTech hub creates favourable conditions and highquality infrastructure for the development of the financial technologies market. It sets a goal to unite all regional participants of the financial technologies market to implement and stimulate new products, create a single market for financial technology providers, increase the level of human capital and know-how, and develop entrepreneurial thinking within the population. The AIFC FinTech Hub is an official participant of the Global FinTech Hub Federation (GFHF). Joining the international federation is a timely step in the development of the AIFC FinTech Hub, and will certainly provide a positive image and recognition of the AIFC FinTech Hub on the international arena. DEVELOP ATTRACT 150+ STARTUPS BRING WORLD WIDE: enterpreneurs international investors industry experts/ consultants technology experts universities associations more mature, diverse and knowledgeable investment market WE FOCUS ON... Cybersecurity Next-generation payments Cryptocurrence Roboadvisory Artificial Intelligence P2P Lending ICO AIFC: the financial hub of the region 55

58 MAIN FINTECH INITIATIVES WITHIN AIFC FINTECH STARS ACCELERATION PROGRAM: Develop 10 projects (fintech, ecommerce) within 3 months period Provision of co-working spaces (~1400 sq,m) International expertise, mentors More information on BLOCKCHAIN RESEARCH CENTRE Launch of pilot projects on equity post trade, trade finance, interbank payment transfers, etc. Preparation of professionals on blockchain technologies ѧ ѧ "CASHLESS SOCIETY" INITIATIVES Development of cashless initiatives Realisation of new approaches to pay without cash Provision of online API platforms for developers to develop new innovative products AIFC FINTECH REGULATORY SANDBOX Minimise legal uncertainty Improve access to investment Adaptation to test and learn approach Creating rules for new products/business models Application forms are available on E-RESIDENCY FOR AIFC PARTICIPANTS Development of high-quality, fully fault-tolerant and multi-channel front-end delivery of all digital services to AIFC participants Integration of AIFC IS with government services Attraction of foreign investors to AIFC and Kazakhstan To learn more about AIFC FinTech Hub, please follow this link 56 Organizational structure

59 AIFC GREEN FINANCE CENTRE The AIFC Green Finance Centre will be promoting the AIFC as a green financial hub for Central Asia and Eastern Europe, providing policy proposals to the government, financial institutions and enterprises, including assistance to the issuance of the groundbreaking green bond of Kazakhstan & Central Asia. MAIN ACTIVITIES OF THE CENTRE: assistance in the introduction of green financial instruments in Kazakhstan; keeping a register of international financial institutions, which provide grants and other funding for green projects; development of a range of green financial instruments, as well as guidelines for their implementation by various market players, including developmental institutions, commercial banks, funds, etc.; project support, including the period of the preparation of the green investment project and a two-year period after the project financing (monitoring, reporting and verification); conducting training programmes and certification of specialists in green finance; organisation of the International Annual Global Green Finance Awards; organisation of road-shows to collect projects for the issuance of green bonds in Kazakhstan and the Central Asian region. To learn more about the AIFC Green Finance Centre, please follow this link AIFC: the financial hub of the region 57

60 CHAPTER STRATEGIC PILLARS

61 CAPITAL MARKETS ASSET MANAGEMENT AIFC MAIN PILLARS FINANCIAL TECHNOLOGIES ISLAMIC FINANCE PRIVATE BANKING AIFC focuses on enhancing growth through its main strategic pillars such as capital markets, asset management, financial technology, Islamic finance and private banking, while paying a great deal of attention to green finance. CAPITAL MARKET With rapid economic growth and a highly attractive pipeline of IPOs/ SPOs in Central Asia and the EAEU, there is an increasing need for a liquid and efficient regional stock market. The development of the AIFC capital market is a major strategic direction. Its successful implementation is crucial for the AIFC. The primary objective is to create a significant alternative to the banking system, and develop AIFC: the financial hub of the region 59

62 a liquid and well-balanced capital market with a broad range of financial instruments. The newly-founded Astana International Exchange will become a regional platform for participants, attracting greater financial inflows and connecting the world s leading market players in the East and West via its main strategic AIX partners the Shanghai Stock Exchange and Nasdaq. The AIX is a high-tech, innovative and efficient platform that provides services based on international standards, increasing trading volume and revenue, as well as long-term expansion into new asset classes and revenue diversification. ASSET MANAGEMENT The development of an asset management market is integral to any successful financial centre, and the AIFC will leverage its geographic position to provide international investors with access to markets in Central Asia. Furthermore, the AIFC opens up opportunities for global and local private equity, as well as hedge fund and real estate fund managers to add diversity to their portfolios. Thus, localising leading international asset management companies through the efficient use of Sovereign Funds, along with strengthening internal expertise in the field, can establish Astana as the main regional centre for asset management and help boost the competitiveness of the Kazakhstani economy in the global market outlook. FINANCIAL TECHNOLOGY With its modern infrastructure, flexible regulations, easy communication environment and legal transparency, the AIFC is well positioned to attract tech companies and become a regional FinTech hub with flexible regulation. The introduction and development of the relatively-new FinTech aspect allows reducing the cost of traditional financial services, facilitate an expanded integration with global markets and accelerate the development of the local financial system. The AIFC FinTech hub aims to attract start-ups from all over the world, bringing entrepreneurs together with international investors, industry experts, and a great talent pool, which will in turn help to develop a more mature, diverse and knowledgeable investment market in Kazakhstan with a pipeline of opportunities for venture capital funds and financial institutions. ISLAMIC FINANCE Kazakhstan serves as an attractive platform for the amplification of Islamic finance, as well as a gateway to the region. The role of Islamic finance at AIFC is becoming one of the essential elements of global financial architecture. With that in mind, the AIFC has worked closely with the Islamic Development Bank (IsDB) and Asian Development Bank (ADB) to create a favourable legal and regulatory environment, as well as an industry master plan, together with developing products and tools that will attract Islamic banking, non-banking financial services and capital from the Central Asia, the Middle East and the South East Asia. To promote AIFC as a regional hub for Islamic finance, the Advisory Council on Islamic Finance (ACIF) has been established, while the Central Shari ah Advisory Board will be launched this year. AIFC is actively advising the Ministry of Finance on the issuance of a debut sovereign sukuk in the region in 2018, which will become an important step for Kazakhstan in promoting and developing the Islamic finance industry. 60 Strategic pillars

63 AIFC is a full member of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). AAOIFI appointed AIFC to administer examination for AAOIFI courses.

64 PRIVATE BANKING AIFC supports the development of the Private Banking sector in conjunction with the development of the asset management market and expertise. With its dynamic and sound course of actions, AIFC is opening investment opportunities for High-Net- Worth Individuals in the region, and invites international Private Banking firms and External Asset Managers to set up their offices within the Centre. With private wealth management globally experiencing a shift towards Asia, and as emerging economies are drawing more investments and fueling further wealth generation, AIFC aims at positioning Astana as an important regional wealth management hub in Central Asia for a select customer base from the CIS/EAEU and other parts of Asia by creating a new private banking platform. AIFC provides a supportive and sound regulatory framework similar to the world s leading financial jurisdictions, that is leveraged on the positive global experience of the world s leading wealth management centres such as Switzerland, Singapore, Luxembourg and the UAE. The extensive range of products and services (investment & portfolio advisory, tax & wealth planning, asset allocation) are offered via models and structures such as representatives, advisory, branches and the development of booking and custody for the local players in line with the best global modern wealth management practices. GREEN FINANCE AIFC facilitates the development of green finance by providing the necessary conditions and infrastructure, catalysing the transition to a green economy and sustainable development. AIFC has developed a legislative base for green finance, including the Concept of the Green Financial System for Kazakhstan and the AIFC Strategy on leadership in green finance until 2025, which reflects the main institutional development stages of green finance at AIFC. AIFC is currently collaborating with institutions to ensure the issuance of the first green bonds at the AIFC Exchange Trading Platform. The funds attracted by municipal green bonds are to be used to finance city needs,including the provision of clean water, waste management, energy saving, etc. Furthermore, AIFC is one of the founders of the international network Financial Centres for Sustainability, which is a global platform for exchanging experience and taking common action to accelerate the expansion of green and sustainable finance. 62 Strategic pillars

65 The world s top-10 start-ups participate in Fintech Stars, the international accelerator programme launched by the AIFC in cooperation with Seedstars. The accelerator programme is aimed at collecting innovative solutions and creating a platform for interaction between the world s fintech companies.

66 CHAPTER ASTANA DESTINATION FOR BUSINESS

67 Astana is one of the youngest and fastest-growing cities in the world. Aiming to become a top destination for investors, it is already gaining a tremendous recognition as a regional financial hub for market participants and attracting greater financial inflows to the country. With its modern infrastructure, distinctively unique architecture, transport logistics, constantly developing education and healthcare services, Astana encompasses a contemporary ground for attracting visitors and businesses on an international level. SMART ASTANA The Smart Astana project aims to further improve the quality of life for its residents and visitors of Astana by integrating the technologies into the city development, fostering an operational efficiency of urban infrastructure as well as enabling the platform for ideas and knowledge sharing between citizens and business community. city will undoubtedly become an important element of the global financial system. The harmonious development of the capital will allow Astana to become a truly global smart city: core, innovative, efficient, safe and comfortable. Over the years, Astana has been the main venue for world political, sports and cultural events. With the development of AIFC, the SMART MANAGEMENT: SMART LIFESTYLE: Astana is a safe city Astana is a city of electronic state and city services ASTANA SMART ECONOMY: Astana is a city of innovations SMART ENVIRONMENT: Astana is a city with efficient consumption of resources SMART SOCIETY: Astana is a city with rich human capital SMART TRANSPORT: Astana is a comfortable city for tourists and attractive for tourists AIFC: the financial hub of the region 65

68 GREEN FINANCE HUB ASTANA Kazakhstan has a decisive opportunity to orient its financial system towards low-carbon and sustainable development. In this regard, AIFC is devoted to attaining the main objectives of supporting projects with the primary principles of green economy in Astana such as projects aimed at increasing the efficiency of resources usage (water, land, biological etc.) and managing them, improving current infrastructure and constructing new infrastructure, improving the well-being of the population and the quality of the environment through cost-effective ways of mitigating pressures on the environment as well as improving national security, particularly water security. 66 Astana destination for business

69 Edbiz Consulting in partnership with AIFC organised the 7 th Global Islamic Finance Awards (GIFA) ceremony in 2017 in Astana. Edbiz Consulting launched the Global Islamic Finance Report (GIFR) 2018 at the Astana Islamic Economy Forum.

70 TAX REGIME AIFC entities and employees will enjoy a zero tax rate on their corporate and individual income as well as gains from the sale of securities, dividends and compensation on the listed securities. The AIFC tax regime includes 3 categories of tax benefits that shall be effective until 2066: 1. The exemption of corporate income tax (an analogue of the profit tax) on the income from the provision of certain financial services (investment management, Islamic banking, brokers, reinsurance, etc.), and ancillary services (legal, audit, accounting, consulting), providing both participants in the providers of the abovementioned financial services, and the AIFC bodies. 2. Benefits for investment income exemption from corporate income tax (legal entity) and individual income tax (individuals) by income: i. From the increase in value, dividends and fees on securities listed on the AIFC Stock Exchange (issuers are not only members of the AIFC) ii. From the increase in value and dividends on shares of registered participants of the AIFC or the shares of participation in their authorised capital 3. The exemption of individual income tax of foreign providers (labour incomes) of participants providing financial and ancillary services, as well as the bodies of the AIFC. Other deductions, incl. social, remain as it is. SINGLE WINDOW PRINCIPLE To facilitate a business to set up jurisdiction in AIFC and attract the best international workforce, the AIFC Expat Centre in Astana provides a variety of government and non-government services based on the single window principle. In fact, most foreign nationals coming to Astana can get an efficient centralised access to visa and migration related services, tax-revenue services, Government for Citizens Corp s (GCC) services, call-centre services, as well as assistance in securing accommodation, educational facilities, etc. All the authorised officials of the government and non-government organisations are physically present on the AEC s site. For more information, please visit 68 Astana destination for business

71 AIFC cooperates with Microsoft BizSpark international programme for the development of fintech ecosystem and support of innovative start-up projects in Kazakhstan.

72 Toronto San Francisco AIR CONNECTIVITY Astana is directly connected with many global financial centres, among which are Frankfurt am Main, London, Paris, Seoul, Bangkok, Beijing, Istanbul, New Delhi and Dubai. By 2025 Astana has an ambition to open more direct routes to the top 50 world financial centres, including New York, Shanghai, Hong Kong, Singapore, Tokyo, Amsterdam, Zurich etc. Active flightrs Planned Perspective 10 leading financial centres 70 Astana destination for business Boston New York Washington D.C.

73 Edinburgh Stockholm Oslo Moscow Vilnus Warsaw Amsterdam Brussels Kiev London Frankfurt Luxembourg Budapest Geneva Paris Vienna Zurich Madrid Rome Istanbul Munich Dublin ASTANA Beijing Baku Qingdao Seoul Shanghai Tehran Tel Aviv Dubai Delhi Doha Abu Dhabi Tokyo Guangzhou Shenzhen Taipei Hong Kong Mumbai Bangkok Kuala Lumpur Singapore Jakarta Sydney AIFC: the financial hub of the region 71

74 GLOBAL FINANCIAL CENTRES INDEX The Global Financial Centre Index 23 has positioned Astana among the top 10 financial centres in Eastern Europe and Central Asia, ahead of Budapest, St. Petersburg, Almaty, Baku and other centres in the region. The ranking profiles financial centres by evaluating the main areas of competitiveness, including business environment, human capital, infrastructure, financial sector development, reputation as well as the level of diversity, speciality and connectivity. 72

75 AIFC Islamic finance regulatory framework was developed under the Technical Assistance Grant of the Asian Development Bank (ADB).

76 REAL ESTATE The borders of the AIFC are confined to 1,632 hectares within the territory of the left bank and part of the right bank of Astana, which allows companies to register now as participants of the AIFC using the extensive and developed transport, logistics and administrative infrastructure of the territory. At the same time, EXPO site will become foundation for building an advanced financial and technological hub at the heart of the AIFC, fit for the functioning of major financial institutions, as well as objects of technological development. The territory of the EXPO comprises an architectural design of a unique quality that is specifically engineered to accommodate the AIFC s high-tech innovative infrastructure. Asset management companies Insurance companies International financial organisations Development banks Properties International and national legal organisations Bureau for Continuing Professional Development AIFC Court International Arbitration Centre FinTech Hub Astana Financial Services Authority Islamic finance institutes and organisations AIFC Authority AIFC Expat Centre Investment banks Astana International Exchange AIFC Management Council 74 Astana destination for business

77 CONTACT 8 Kunaev street, Block B, BC Emerald Quarter, Astana city, Republic of Kazakhstan tel: +7 (7172) fax: +7 (7172) info@aifc.kz

78 aifc.kz