BAKU, Azerbaijan, September 2. Kazakhstan will adopt a Capital Market Development Program through 2030 aimed at creating a deeper, more liquid, and diversified capital market and expanding access to long-term financing for businesses, the Agency for Regulation and Development of the Financial Market said.
The main provisions and strategic directions of the program were discussed during a roundtable in Almaty. The document was developed by the Agency together with the National Bank of Kazakhstan and market participants following an instruction from President Kassym-Jomart Tokayev.
Representatives of the Agency, the National Bank, the Kazakhstan Stock Exchange (KASE), the European Bank for Reconstruction and Development (EBRD), the Association of Financiers of Kazakhstan, the Unified Accumulative Pension Fund, market participants and experts attended the event.
According to the agency, over the past five years, the capitalization of Kazakhstan's stock market more than doubled from 19.1 trillion tenge ($41.65 billion) to 41.8 trillion tenge ($91.18 billion), with an average annual growth rate of 11%. The debt securities market also nearly doubled, increasing from 32 trillion tenge ($69.80 billion) to 58 trillion tenge ($126.52 billion), while corporate debt reached 24 trillion tenge ($52.35 billion).
"The Agency, together with the National Bank, was instructed to develop the Capital Market Development Program through 2030 and prepare a new Law on the Capital Market. The implementation of these initiatives is aimed at creating a modern architecture for the stock market and establishing conditions for its further development as one of the key sources of long-term financing for the economy alongside bank lending. At the same time, a developed securities market is an important factor in diversifying financing sources, strengthening macroeconomic stability and increasing investor confidence," Chairperson of the Agency Madina Abylkassymova said.
The program envisions the creation of a deep, liquid and diversified capital market that provides businesses with access to long-term financing, households with a broad range of reliable instruments for long-term savings, and the economy with an effective mechanism for transforming domestic savings into investment.
The program will focus on seven strategic areas comprising 35 initiatives.
One of the priorities will be strengthening the role of institutional investors, including through improved approaches to managing pension assets and expanding opportunities for financial institutions to invest in domestic market instruments.
The program also envisages simplifying companies' access to the stock market by accelerating and streamlining securities issuance procedures, including through the transfer of registration to the Central Securities Depository and the introduction of digital processes.
More flexible listing and placement conditions for medium-sized businesses are also being considered to reduce administrative and regulatory barriers and expand the number of companies able to raise financing through the capital market.
To improve liquidity in the secondary stock market, Kazakhstan plans to establish a centralized securities lending mechanism. This would allow institutional investors to make temporarily unused securities available for market operations. Covered short selling would also be permitted, while the role of market makers and support for independent issuer research would be strengthened.
The program also places emphasis on capital market infrastructure. One of the key steps will be connecting Kazakh stocks to major international securities custody and settlement systems. This is expected to make it easier for foreign investors to trade Kazakh shares through familiar infrastructure, reduce transaction costs and broaden the potential investor base.
"Particular attention will be paid to improving the quality of corporate governance and protecting investors' rights. We plan to increase the transparency of public companies, strengthen corporate governance requirements and ensure more effective protection of minority investors' rights. This is particularly important for building long-term confidence in the market and increasing the participation of retail investors," Abylkassymova said.
Kazakhstan also plans to update its model for capital market regulation and supervision. The Agency is developing a risk-based supervisory model focused not only on compliance with formal requirements but also on assessing actual risks and market participants' conduct.
The updated model was tested on a pilot basis this year, with increased emphasis on investor protection and corporate governance. It is planned to be extended across the entire market.
The role of KASE will also be strengthened, with greater independence for its regulatory functions. The exchange already performs a number of functions related to admitting participants and issuers to trading, information disclosure and monitoring trading activity.
The next step will be to establish an independent regulatory committee within KASE. The committee will make decisions independently of the exchange's commercial management, while information on identified signs of market manipulation will be promptly transferred to the Agency.
"The outlined areas cover the key elements of market development - from expanding demand and attracting new issuers to developing infrastructure, strengthening investor protection and improving supervision," Abylkassymova said.
A new Law on the Capital Market is being developed in parallel with the program. The legislation will consolidate and systematize existing regulations and establish an integrated regulatory framework for the market.
The program and the new law are expected to create a modern legislative and institutional foundation for further development of Kazakhstan's securities market, expand opportunities for businesses to raise financing and create new investment opportunities.
