AFSA introduces enhancements to the AIFC Derivatives Framework, DKnews.kz reports.
The Astana Financial Services Authority (AFSA) has introduced enhancements to the Derivatives framework in the Astana International Financial Centre (AIFC). The enhancements, grounded in benchmarking on the best practices and the analysis of feedback received from the market, offers some refinements to the framework and introduces enhancements to conduct requirements for Derivatives transactions.
The amendments aim to establish a clear regulatory framework for Derivatives traded on Authorised Market Institutions and Multilateral/Organised Trading Facilities (MTF/OTF), ensuring effective pricing, settlement and operations, applying market conduct requirements from the AIFC Market Rules, and prohibiting Market Manipulation and Market Sounding.
Given the elevated risks associated with Derivatives operations, the framework establishes the following conduct requirements to protect Clients in Derivatives transactions:
- Requiring risk warning on marketing and other communications to ensure Clients are aware of the high risks associated with Derivatives transactions;
- Mandating additional disclosures in the key features document to ensure Clients understand the nature, risks, and essential characteristics of Derivative instruments and operations. This information, along with a risk warning, must be included in the key features document provided to Clients, enabling them to make an informed decision about proceeding with the service;
- Setting limits on Derivatives operations to mitigate risk exposure.
In response to the possibility of regulatory arbitrage involving Digital Assets Derivatives, the framework implements amendments aimed to ensure that the regulation of Digital Assets Derivatives aligns proportionally with the Derivatives framework.
The introduced enhancements to the Derivatives framework are applicable to both new applicants and existing Authorised Persons falling under the scope of this regime.
The commencement date is 1 January 2025.
The relevant amendments to the AIFC Market Rules, AIFC Glossary, AIFC Authorised Market Institution Rules, AIFC Multilateral and Organised Trading Facilities Rules, AIFC Conduct of Business Rules, AIFC Rules on Digital Asset Activities, AIFC General Rules are published on the AIFC website.
