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How to become a broker in Kazakhstan? Printable version

Last update: 19.11.2020

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Many people know that brokers work at the exchanges and mostly their work is accentuated on the trade of various security papers, but few people really have a clear idea of who the brokers are, why the work of a broker is considered as a prestigious one and what brokers actually do.

Who can become a broker?

First, we will determine who the broker is. The broker acts as an intermediary between the seller and the buyer on the securities market. Under the legislation of the Republic of Kazakhstan, an ordinary citizen does not have the right to enter the stock exchange independently to buy or sell securities. He can do this only through a broker – professional market participant who deals with securities and other financial instruments on behalf of, at the expense and in the interests of the client. The broker must necessarily have a license to carry out activities in the securities market and be a direct participant in the exchange. The broker is not the owner of the securities purchased for the client, and receives remuneration in the form of commissions for his work. The terms and procedure for the payment by the client of remuneration to the broker for the provision of services on the securities market are established by the broker's internal documents and (or) the contract concluded by the broker with his client.

A brokerage company is created and carries out activities in the organizational and legal form of a joint-stock company. The founders and shareholders of the brokerage company may be individuals and legal entities - residents and non-residents of the Republic of Kazakhstan, taking into account the restrictions established by the legislation of the Republic of Kazakhstan. The minimum amount of the authorized capital of a brokerage company is 400,000 times the monthly calculation index established by the law of the Republic of Kazakhstan on the republican budget for the corresponding financial year.

To obtain a license, the applicant must meet the following qualification requirements:

  • availability of a business plan approved by the applicant's management body for the next three years, which should reflect the objectives of obtaining a license, a financial plan for the first three financial (operational) years, investment policy, sources of financing for the company's activities, and more;
  • availability of software and hardware and other equipment necessary to carry out activities in the securities market;
  • presence of an organizational structure that meets the requirements of the legislation of the Republic of Kazakhstan;
  • existence of a provision on the internal audit service of the applicant.

The licensee has the right to carry out activities on the securities market only if there are internal documents establishing:

  • conditions and procedure for carrying out activities in the securities market;
  • general conditions of operations;
  • rights and obligations of the licensee and his client, their responsibility.

In order to obtain a license, the applicant submits to the National Bank the documents listed in the Rules for the Issuance, Suspension and Deprivation of Licenses for the Professional Activity in the Securities Market approved by the Resolution of the Board of the National Bank No. 25 of February 26, 2014. Documents submitted to obtain a license shall be considered by the National Bank and if the applicant and documents submitted by him comply with the requirements of legislation of the Republic of Kazakhstan , the National Bank shall issue a license no later than thirty days from the date of submission of documents.

Is control exercised over the activities of the broker?

For what reasons a brokerage license can be suspended?

When can a brokerage license be revoked?

 

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