Enhancements to the Derivatives Framework at the Astana International Financial Centre
Alerts and reviews
Date
16.01.2025
Share
,
Attachment
Related Individuals
2 / 2
ALUMNI Partners law firm highlights that amendments for improving the regulatory framework for Derivatives [1] operations at the Astana International Financial Centre (AIFC) have come into effect as of 1 January 2025 [2].
The enhancements are based on the best international practices and feedback from market players. Key provisions of the new regulation include the following:
1. ESTABLISHMENT OF A CLEAR REGULATORY FRAMEWORK FOR DERIVATIVES
The amendments clarify the regulation of derivatives and introduce additional requirements, including:
- standards for derivatives traded on Authorised Market Institutions3 and Multilateral/Organised Trading Facilities4 (MTF/OTF) [5];
- effective pricing, settlement and operations [6];
- market conduct in accordance with AIFC Market Rules, including prohibitions on Market Manipulation and Market Sounding [7].
2. STRENGTHENING CLIENT PROTECTION REQUIREMENTS
To boost client awareness of risks associated with Derivatives operations and limit potential losses, the following measures are established:
- all marketing materials and client communications must include information about high risks associated with derivatives operations [8];
- a Key Features Document must reflect the nature, risks and main characteristics of derivatives. To ensure informed decision-making, this document must be provided to clients prior to transactions [9];
- limits on Derivative operations volumes to mitigate risks [10].
3. REGULATION OF DIGITAL ASSET DERIVATIVES
To prevent regulatory arbitrage, Digital Asset Derivatives are subject to proportional regulation as per the Derivatives framework [11].
The aforementioned changes to the Derivative framework apply to both new and existing Authorised Persons [12] falling within the scope of this regime.
ALUMNI Partners legal updates provide a brief overview of new developments in law and law enforcement, and should not be viewed as a legal opinion or advice.
[1] – A derivative is a financial instrument (option, future, or contract for differences) deriving their value from an underlying asset, index, rate or financial instrument.
[2] – AIFC Market Rules, AIFC Rules No. FR0003 of 2017 (with amendments as of 15 December 2024 coming into effect on 1 January 2025) (hereinafter, the AIFC Companies Regulations); AIFC Authorised Market Institution Rules (AMI), AIFC Rules No. FR0002 of 2017 (with amendments as of 15 December 2024 coming into effect on 1 January 2025); AIFC Multilateral and Organised Trading Facilities Rules (MOTF), AIFC Rules No. 0054 of 2021 (with amendments as of 15 December 2024 coming into effect on 1 January 2025); AIFC Rules on Digital Asset Activities (DAA), AIFC Rules No. FR00062 of 2023 (with amendments as of 15 December 2024 coming into effect on 1 January 2025).
[3] – Authorised Market Institution means a Centre Participant licensed by the Astana Financial Services Authority to carry out one or more Market Activities.
[4] – Multilateral or Organised Trading Facility means an alternative trading venue facilitating exchange of financial instruments between multiple parties.
[5] – Clauses 2.5.2(e-1), 3.6.2 of the AIFC Authorised Market Institution Rules; Clause 5.2 (4-1) of the AIFC Multilateral and Organised Trading Facilities Rules.
[6] – Clause 5.2.2 of the AIFC Market Rules.
[7] – Clauses 5.4, 5.5 of the AIFC Market Rules.
[8] – Clause 3.3.5 of the AIFC Conduct of Business Rules (with amendments as of 15 December 2024 coming into effect on 1 January 2025).
[9] – Clause 4.7 of the AIFC Conduct of Business Rules.
[10] – Clause 5.7 of the AIFC Conduct of Business Rules.
[11] – Clauses 2.5.2(2), 3 of the AIFC Rules on Digital Asset Activities.
[12] – Authorised Person means Either an Authorised Firm (a Centre Participant which has been licensed by the AFSA to carry on one or more Regulated Activities) or an Authorised Market Institution (a Centre Participant which has been licensed by the AFSA to carry on one or more Market Activities).
Related Individuals
38
team members
are recommended by the leading Russian national legal directory Pravo-300 2023 in 22 practice areas