Kazakhstan is turning to SEC expertise. The country’s financial regulator has expressed readiness to join the U.S. Securities and Exchange Commission’s technical assistance program for Central Asian countries to strengthen oversight of professional securities market participants, DKNews.kz reports.
On August 12, Madina Abylkassymova, Chair of the Agency for Regulation and Development of the Financial Market, met with Paul Kapur, U.S. Assistant Secretary of State for South and Central Asian Affairs, to discuss prospects for financial cooperation.
Kazakhstan ready to join SEC technical assistance program
One of the key areas discussed at the meeting concerned the securities market directly.
The Agency expressed its readiness to participate in the SEC’s technical assistance program for Central Asian countries.
Potential areas of cooperation include improving supervisory mechanisms for professional securities market participants, automating control functions, introducing risk-based approaches, and developing the institution of self-regulatory organizations.
For brokers, asset management companies and other market participants, the practical impact of such cooperation could lie in making supervision more technology-driven and targeted. The regulator is interested in focusing more closely on higher-risk areas while moving some control processes into an automated format.
Supervision could shift toward a risk-based model
Risk-based approaches received particular attention during the talks.
Under this model, the intensity of supervision depends on the nature of a market participant’s activities and the scale of the associated risks.
However, the published information does not specify which particular SEC mechanisms Kazakhstan could adopt or when they might be introduced.
The format of technical assistance, the possible involvement of SEC specialists and the list of specific projects have also not yet been disclosed.
At this stage, the discussion is therefore about readiness for cooperation and identifying priority areas rather than introducing a new set of requirements for Kazakhstan’s brokers.
Control functions may be automated
Another potential area of cooperation concerns digital tools.
The Agency is considering the automation of control functions as part of possible cooperation with the SEC.
Given the large number of transactions on the securities market, automated supervision could help identify suspicious or higher-risk operations more quickly.
The Agency is viewing international expertise as one of the tools for modernizing Kazakhstan’s domestic financial supervision system.
Self-regulatory organizations could gain a larger role
Another potential area of cooperation is the development of self-regulatory organizations.
Under such a model, market participants may take part in establishing professional standards and internal control mechanisms, while the state regulator sets the overall rules and boundaries.
However, no details have yet been provided on the future powers of SROs, their specific role or possible legislative changes.
Kazakhstan and the US to continue financial market dialogue
The meeting between Madina Abylkassymova and Paul Kapur went beyond cooperation with the SEC.
The sides also discussed broader financial cooperation, the development of supervisory mechanisms and the protection of the interests of financial market participants.
The Agency said it intends to continue working with U.S. financial regulators, with a focus on strengthening financial stability, improving supervision and protecting market participants.
For Kazakhstan, the most concrete part of the talks so far concerns the securities market: strengthening oversight of professional participants, automating supervision and improving risk assessment.
