The main priorities of the supervisory policy and development of the securities market for 2024
On February 21, 2024, Chairman of the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (hereinafter - the Agency) Abylkasymova M.E. held a meeting with professional participants of the securities market (hereinafter referred to as the PPSM). The meeting was attended by representatives of the Association of Financiers of Kazakhstan, heads of the Central Securities Depository, JSC "Central Securities Depository" (hereinafter - CD) and JSC "Kazakhstan Stock Exchange".
During the event, the regulator summed up the results of 2023, presented the priorities of the supervisory policy, as well as the main directions of development of the securities market for 2024.
The year 2023 was marked by a decrease in the rate of inflation and the recovery of global stock markets. Following international trends, the capitalization of the Kazakh stock market increased by 13.0% or 4.6 trillion tenge to 40.2 trillion tenge or 35.3% of GDP.
At the same time, the capitalization of the stock market amounted to 26.7 trillion tenge or 23.5% of GDP, having increased by 26.4% in 2023. The volume of corporate debt in circulation amounted to KZT 13.5 trillion, having decreased by 6.5% compared to the same indicator last year.
PPSM in 2023, despite the influence of external negative factors caused by geopolitical events and an increase in global inflation, showed an increase in net profit by almost 1.5 times, an increase in the customer base by 2.5 times, and also meet the Agency's requirements for equity adequacy with a margin.
In addition, the number of retail investors in the securities market has increased significantly. Since the beginning of 2023, the number of accounts opened in the nominal holding system of the Central Securities Depository has increased by more than 2.5 times, amounting to 2.4 million.
In 2024, the Agency will continue to work on the implementation of risk-based supervision and risk assessment in the activities of professional participants in the securities market, through the use of current supervisory tools in the form of assessment based on the Risk Assessment and Supervision System (RASS) model, supervisory stress testing, analysis of financial and regulatory reporting.
The Agency plans to pay special attention to the development of behavioral supervision of the activities of the PPSM. The regulator will assess the behavioral risk profile of the PPSM by analyzing the appeals offered to the client of financial products, the volume of the customer base, business reputation and the implementation of a control purchase.
The main priorities for the development of the securities market infrastructure in 2024 will be aimed at strengthening the integration of the Kazakh stock market into global capital markets, as well as minimizing risks when making transactions with financial instruments. Work will continue on the transformation of the Central Bank into a regional settlement and accounting hub, and measures have been completed to transfer the functions of the central counterparty in the derivatives market and the foreign exchange market to the KASE Clearing Center.
A separate set of tasks of the Agency is devoted to improving the internal liquidity indicators of the market and creating a safe environment for investments. The Agency's efforts will focus on improving the current legislation on investment and venture funds, creating legislative conditions for the activities of the national rating agency, integrating ESG principles in the financial market, as well as expanding SME access to the stock market.
Taking into account the current global trends and the high demand of local and foreign retail investors for digital assets, the Agency, together with the National Bank, will also develop a legal framework to ensure the functioning of the digital financial instruments market.
Following the discussion of the supervisory policy and directions for the development of the securities market, representatives of the Association of Financiers of Kazakhstan and the PPSM announced additional proposals that will be taken into account in the priorities for 2024.
The final document on the main priorities of the supervisory policy and development of the securities market for 2024 will be posted on the official website of the Agency.
The Agency's External Communications Division
+7 (727) 237-10-89, press@finreg.kz