Securities Market Reform in Kazakhstan: An Outline of Major Legal Developments and Consequences

Abstract

In May-July 2003 the Kazakhstani legislature and the government authorities were extremely productive revising the country's legal framework on securities and financial market issues. Following adoption in May of the new Joint Stock Companies law (the JSCL) and the amendments to the Civil Code and the laws On Business Entities, On Banks and Banking Activity, On Investment Funds, the Kazakhstani legislature came up in July with the new Securities Law (the SML), which has replaced the 1997 laws On Securities Market and On Registration of Securities Transactions. Practically simultaneously the Parliament adopted the brand new Financial Law (the FML) dealing with the state regulation of financial services organizations, and the National Bank has issued a number of corresponding implementing regulations. The new legislation aims to increase the capitalization level of a joint stock company, provide the better protection of an investor's interests, and stimulate the development of a public equity market in Kazakhstan. This article reviews the most significant changes brought by the new legislation and their legal consequences for investors and companies doing business in Kazakhstan.