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AIFC Stock Exchange: new hopes for Kazakhstani LICs

With the opening of Astana International Financial Center (AIFC) Exchange in Kazakhstan, life insurance companies in Kazakhstan have hope for efficient cooperation with this structure. AIFC is the opportunity of entering international financial investment markets to gain access to the most attractive securities and other financial instruments. It is also opportunity to provide LIC clients with access to such securities at the lowest cost. In response to inquiry of lifeinsurance.kz the Exchange representatives share information in more details.
AIFC Stock Exchange: new hopes for Kazakhstani LICs

We would like to note that Kazakhstani LICs have been long searching for additional sources of investment or investors.

“The economy always needs long (long-term) relatively cheap investments for implementation of socially significant institutional projects,” notes Askar Shakenov, the Deputy Chairman of the Management Board of JSC LIC Nomad Life. - Cooperation with AIFC can provide companies with access to the most attractive investments in various currencies with insignificant costs, exemption from taxation, low admission fee ticket, as LICs pool clients for investment.

Given the fact that life insurance companies are also investors, and the investment currency often oversteps the limits of Tenge, they seek access to international financial markets.

When asked what opportunities AIFC can give to Kazakhstani LICs, the Center’s Public Relations Department said that the shareholders of these companies have the opportunity to establish a new insurance company in AIFC, captive or Islamic insurance company. LICs can also open a subsidiary, branch or representative office.

Besides, the press service of the Center notes that LICs are entitled to act as investors and acquire certain financial instruments on the AIFC Stock Exchange - Astana International Exchange (AIX). This can be done by using the services of professional participants who have access to the Exchange.

The AIFC press service also notes that the advantage of the Exchange is that the legal and regulatory environment in which it operates meets the highest international standards.

“It simplifies access to the exchange by foreign investors and provides additional guarantees to local investors. Astana International Exchange is working on the development of the product line, for example, using the opportunities offered by the infrastructural international initiative “Belt and Road”, involving junior mining companies as well as exchange funds as issuers, AIFC notes in response to the request lifeinsurance.kz. - Soon it will be possible to invest in securities in any currency convenient for the investor. The list of instruments offered for trading can be found on the Exchange's website www.aix.kz in the Market Data section. Access to the Exchange is carried out through brokerage companies, which must have access to trading or a license from an authorized body of the AIFC Committee. The list of brokerage companies can also be found on the website www.aix.kz in the section Trading Members. The list of AIFC legislative acts is available on the AIFC Financial Services Regulatory Committee website (link - Legislation).”

AIFC also notes that in case of acquiring the status of the Center member, which implies obtaining a license to carry out activities, LICs are given access to all privileges that apply to AIFC participants, including tax preferences, protection in the AIFC International Court, use of legislation based on English Common Law, and a simplified exchange rate regime.

According to Askar Shakenov, a specific tax regime has been set in AIFC, where the Center participants are exempt from corporate income tax until January 1, 2066 which is a good motivation for cooperation. However, there are no life insurance services in the list of financial services that fall under a special tax regime, which does not motivate the companies operating in this area to be AIFC participants.

However, everything depends on us, - he remains optimistic. - It depends on our common efforts that the Kazakhstani financial sector works in a new, transparent, efficient way taking into account international practice for the benefit and prosperity of our country. We, as representatives of the life insurance sector, are very interested in this.

Photos: Total.kz, bnews.kz

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