On Commodity Exchanges

Updated Unofficial translation

The Law of the Republic of Kazakhstan dated 4 May, 2009 No. 155-IV.

      Unofficial translation

      This Law regulates social relations arising in the process of commodity exchanges and exchange trade, establishes the procedure for regulation and state control over the activities of commodity exchanges in order to ensure their open and effective operation, to protect the rights of participants of exchange trade and fair competition between them.

Chapter 1. GENERAL PROVISIONS Article 1. Basic definitions, used in this law

      The following basic definitions are used in this Law:

      1) is excluded by the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication);

      1-1) an exchange broker (hereinafter – the broker) – a legal entity, carrying out its activity on the commodity exchange and making transactions with the commodity exchange on behalf of, at the expense and in the interests of a client;

      2) an exchange dealer (hereinafter – the dealer) – a legal entity carrying out its activity on the commodity exchange and making transactions with the commodity exchange in their own interests and at their own expense;

      2-1) exchange security - monetary security, introduced on a return basis by the participants of exchange trading to the clearing center of a commodity exchange for participation in exchange trading as a security for the fulfillment of its obligations under concluded exchange transactions;

      3) an exchange trading – an entrepreneurial activity on the sale of exchange goods, non-standardized goods, carried out on the commodity exchange by conducting exchange trading in electronic form, registration and processing of transactions;

      4) rules of exchange trading - a document, establishing the procedure for conducting exchange trading for each commodity exchange, developed on the basis of standard rules of exchange trade;

      5) an exchange auction – a process conducted within the framework of exchange trading rules, aimed at making transactions on exchange goods, non-standardized goods on the basis of electronic applications submitted to the electronic trading system of the commodity exchange, ensuring automation of the process of concluding exchange transactions;

      6) participants in exchange trade - clients, brokers and dealers, interacting on the commodity exchange under the rules of exchange trading;

      7) exchange commodity – standardized homogeneous goods included in the Common commodity nomenclature of foreign economic activity of the Eurasian economic union, the units of which are identical in all respects, have similar characteristics and consist of similar components, which allows them to perform the same functions, having the property of full interchangeability of parties from different manufacturers, as well as a fixed-term contract;

      8) quotation of exchange commodities – the demand price and (or) the offer price, announced on the exchange commodities at the a commodity exchange at a certain time;

      9) an order – a document submitted by the client to the broker with indication of performance of a certain action on the commodity exchange in respect of specific exchange commodities;

      9-1) guarantee fund – a cash fund, generated by the exchange at their own expense in order to ensure fulfillment of transactions concluded at the exchange;

      9-2) is excluded by the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication);

      10) a client – an individual or a legal entity, using the services of a broker for making transactions with an exchange commodity;

      11) is excluded by the Law of the Republic of Kazakhstan dated 27.10.2015 No. 364-V (shall be enforced upon expiry of ten calendar days after its first official publication);

      11-1) cross-transaction – an exchange transaction, under which the broker, acting on behalf of two different clients, acts both on the part of the seller and the buyer;

      11-2) a dual counter auction mode – a trading mode, under which the exchange transactions are concluded anonymously as a result of competition between sellers and buyers, and the price for an exchange or non-standardized commodity shall be established at the level of supply and demand equilibrium;

      12) a fixed-term contract - a contract for unconditional or conditional sale and purchase of the underlying asset with delayed execution, it includes futures, options;

      13) is excluded by the Law of the Republic of Kazakhstan dated 10.07.2012 No. 36-V (shall be enforced upon expiry of ten calendar days after its first official publication);

      14) option transaction – an exchange transaction, the object of which is the option;

      14-1) a self-regulatory organization – a non-commercial organization in the form of an association (union), based on voluntary participation of brokers or dealers and included in the register of self-regulatory organizations in the sphere of commodity exchanges;

      14-2) an insurance fund – a monetary fund formed by the exchange and (or) its clearing center at the expense of mandatory contributions of members of the exchange in order to ensure the execution of transactions concluded at the exchange;

      15) the authorized body in the field of regulation of trading activities (hereinafter - the authorized body) – the central executive body, exercising the state regulation and coordination in the field of trading activities;

      16) spot goods - goods that are in stock, for immediate delivery or delivery in the future;

      16-1) non-standardized goods – goods not withdrawn from circulation or not limited in circulation, admitted by the commodity exchange to exchange trading, except for exchange commodities, real estate and intellectual property;

      16-2) a standard auction mode – a trading mode, under which exchange transactions on non-standardized goods shall be concluded during the auction for a decrease or increase at the best price for a buyer (seller) – initiator of the auction;

      17) member of a commodity exchange - a broker and (or) a dealer, that in accordance with the legislation of the Republic of Kazakhstan has the right to conduct transactions in exchange-traded commodity in the manner, prescribed by internal documents of commodity exchange;

      18) trading system of a commodity exchange - a complex of material and technical means, electronic trading system, internal documents of a commodity exchange and other necessary assets and procedures, with the use of which, trading with the conclusion of transactions in exchange commodities between participants in exchange, is carried out;

      19) internal documents of a commodity exchange – documents, that regulate the conditions and order of activity of participants at the commodity exchange, work of a commodity exchange, its bodies, departments, services, procedure and amount of their payment;

      19-1) electronic trading system of commodity exchange - a complex of computing facilities, software, databases, telecommunication means and other equipment of commodity exchange, necessary for conducting stock trading and providing automation of the process of concluding exchange transactions, as well as collecting, storing, processing and disclosure of information;

      20) futures contract – an exchange transaction, the object of which is the futures;

      21) is excluded by the Law of the Republic of Kazakhstan dated 27.10.2015 No. 364-V (shall be enforced from 01.01.2017).
      Footnote. Article 1, as amended by the Laws of the Republic of Kazakhstan dated 10.07.2012 No. 36-V (shall be enforced upon expiry of ten calendar days after its first official publication), dated 06.03.2013 No. 81-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 16.05.2014 No. 203-V (shall be enforced upon expiry of six months after its first official publication); dated 27.10.2015 No. 364-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 2. Legislation of the Republic of Kazakhstan on commodity exchanges

      1. Legislation of the Republic of Kazakhstan on commodity exchanges based on the Constitution of the Republic of Kazakhstan and consists of the Civil Code of the Republic of Kazakhstan, this Law and other regulatory legal acts of the Republic of Kazakhstan.

      2. If an international treaty, ratified by the Republic of Kazakhstan establishes the rules other than those contained in this Law, the rules of the international treaty shall apply.

Chapter 2. STATE REGULATION OF COMMODITY EXCHANGES Article 3. Competence of the Government of the Republic of Kazakhstan in the field of commodity exchanges

      The Government of the Republic of Kazakhstan shall:

      1) develop the main directions of the state policy in the field of commodity exchanges;

      2) is excluded by the Law of the Republic of Kazakhstan dated 03.07.2013 No. 124-V (shall be enforced upon expiry of ten calendar days after its first official publication);

      3) - 6-3) are excluded by the Law of the Republic of Kazakhstan dated 29.09.2014 No. 239-V (shall be enforced upon expiry of ten calendar days after its first official publication);

      7) perform other functions, assigned to it by the Constitution, Laws of the Republic of Kazakhstan and the acts of the President of the Republic of Kazakhstan.

      Footnote. Article 3, as amended by the Laws of the Republic of Kazakhstan dated 05.07.2011 No. 452-IV (shall be enforced from 13.10.2011); dated 15.07.2011 No. 461-IV (shall be enforced from 30.01.2012); dated 10.07.2012 No. 36-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 03.07.2013 No. 124 -V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 29.09.2014 № 239-V(shall be enforced upon expiry of ten calendar days after its first official publication).

Article 4. The competence of the authorized body

      The authorized body shall:

      1) is excluded by the Law of the Republic of Kazakhstan dated 03.07.2013 No. 124-V (shall be enforced upon expiry of ten calendar days after its first official publication);

      2) develop, approve regulatory legal acts in the field of regulation of commodity exchanges;

      2-1) approve the standard rules of exchange trade;

      2-2) approve the list of exchange commodities, introduce changes and (or) additions to it;

      3) is excluded by the Law of the Republic of Kazakhstan dated 13.01.2014 No. 159-V (shall be enforced upon expiry of ten calendar days after its first official publication);
      3-1) is excluded by the Law of the Republic of Kazakhstan dated 29.12.2014 No. 269-V (shall be enforced from 01.01.2015);

      3-2) develop and approve mandatory requirements for the electronic trading system of commodity exchanges;

      3-3) is excluded by the Law of the Republic of Kazakhstan dated 24.05.2018 No. 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication);

      3-4) develop and approve the rules of formation and use of guarantee and insurance funds;

      3-5) develop qualification requirements and a list of documents confirming compliance with them to the activities of commodity exchanges;

      3-6) develop and approve the requirements for the hardware and software complex of the clearing center of the commodity exchange;

      4) is excluded by the Law of the Republic of Kazakhstan dated 13.01.2014 No.159-V (shall be enforced upon expiry of ten calendar days after its first official publication);

      4-1) exercise state control over compliance with the legislation of the Republic of Kazakhstan on commodity exchanges;

      5) analyze and monitor the activity of commodity exchanges;

      5-1) agree the rules and standards of self-regulatory organizations;

      6) publish the information on the activities of commodity exchanges and stock trading, with the exception of information, constituting commercial or any other legally protected secret of the Republic of Kazakhstan;

      6-1) agree the rules of accreditation of brokers and (or) dealers in the commodity exchange;

      7) carry out international cooperation in the field of commodity exchanges;

      7-1) create conditions for the development of international stock trades on the commodity exchange;

      8) is excluded by the Law of the Republic of Kazakhstan dated 17.07.2009 No.188-IV (the order of enforcement see Article 2);
      9) is excluded by the Law of the Republic of Kazakhstan dated 13.01.2014 No.159-V (shall be enforced upon expiry of ten calendar days after its first official publication);

      10) carry out licensing of activities in the field of commodity exchanges in accordance with the procedure established by the legislation of the Republic of Kazakhstan on permits and notifications;

      10-1) exercise control over the compliance by commodity exchanges of the legislation of the Republic of Kazakhstan on counteraction to legalization (laundering) of proceeds, received from crime and financing terrorism;

      10-2) maintain a register of self-regulatory organizations;

      11) exercise other powers, stipulated in this Law and other Laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan.

      Footnote. Article 4, as amended by the Law of the Republic of Kazakhstan dated 17.07.2009 No. 188-IV (the order of enforcement see Art. 2); dated 19.03.2010 No. 258-IV; dated 06.01.2011 No. 378-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 05.07.2011 No. 452-IV (shall be enforced from 13.10.2011); dated 10.07.2012 No. 36-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 03.07.2013 No. 124-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 13.01.2014 No. 159-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 16.05.2014 No. 203-V (shall be enforced upon expiry of six months after its first official publication); dated 29.09.2014 No. 239-V(shall be enforced upon expiry of ten calendar days after its first official publication); dated 29.12.2014 No. 269-V (shall be enforced from 01.01.2015); dated 27.10.2015 No. 364-V (shall be enforced upon expiry of ten calendar days after its first official publication) ; dated 24.05.2018 No. 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 No. 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 4-1. Powers to obtain information

      Footnote. Chapter 2 is supplemented by Article 4-1 in accordance with the Law of the Republic of Kazakhstan dated 10.07.2012 № 36-V (shall be enforced upon expiry of ten calendar days after its first official publication); is excluded by the Law of the Republic of Kazakhstan dated 24.05.2018 № 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 4-2. The sale of goods, included in the list of exchange commodities

      Footnote. Chapter 2 is supplemented by Article 4-2 in accordance with the Law of the Republic of Kazakhstan dated 10.07.2012 № 36-V (shall be enforced upon expiry of ten calendar days after its first official publication); is excluded by the Law of the Republic of Kazakhstan dated 24.05.2018 № 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 5. Licensing of activities in the field of commodity exchanges

      Licensing of activities in the field of commodity exchanges shall be carried out in accordance with the procedure, established by the legislation of the Republic of Kazakhstan on permits and notifications.

      Footnote. Article 5 is in the wording of the Law of the Republic of Kazakhstan dated 16.05.2014 No. 203-V (shall be enforced upon expiry of six months after its first official publication).

Article 6. Commodity exchange

      1. The commodity exchange is a legal entity, established in the legal form of a joint stock company, providing organizational and technical support for trade through their direct carrying out with the use of a trading system of the commodity exchange.

      Commodity exchange provides for tendering under the established rules of exchange trade.

      Commodity Exchange operates under a license, issued by the authorized body.

      2. Designated name of the commodity exchange shall contain the words “commodity exchange”.

      3. Became invalid by the Law of the Republic of Kazakhstan dated 27.10.2015 No. 364-V (see Article 2 for the procedure of enforcement).

      4. The charter capital of a commodity exchange makes not less than three hundred thousand times of the monthly calculation index, established for the corresponding financial year by the Law of the Republic of Kazakhstan on the republican budget.

      Footnote. Article 6 as amended by the Law of the Republic of Kazakhstan dated 27.10.2015 No. 364-V (see Article 2 for the procedure of enforcement).

Article 7. Charter of commodity exchange

      1. Charter of commodity exchange is approved in accordance with the legislation of the Republic of Kazakhstan on joint stock companies.

      2. Charter of commodity exchange in addition to the information, specified in the legislation of the Republic of Kazakhstan, shall contain indication of specialization of the commodity exchange.

Article 8. Dispute resolution in the commodity exchange

      1. To resolve disputes, related to conclusion of exchange transactions, the commodity exchange shall create a permanent exchange arbitration within thirty calendar days after the state registration in the State corporation "Government for citizens".

      2. The activity of exchange arbitrage shall be regulated by the legislation of the Republic of Kazakhstan on arbitration.

      Footnote. Article 8 as amended by the Law of the Republic of Kazakhstan dated 08.04.2016 No. 489-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 No. 241-VI (shall be enforced from 01.07.2019).

Article 9. Classification of commodity exchanges

      Commodity exchanges can be divided for the following types according to the specialization:

      1) universal, receiving various kinds of goods to trading;

      2) specialized, serving the circulation of particular type of product.

Article 10. Model rules for exchange trade

      1. Model rules for exchange trading determine the order of the activities of members of a commodity exchange in exchange transactions with exchange commodities.

      2. Model rules for exchange trading shall include:

      1) the conditions and procedure for accreditation of commodity exchange members, suspension and termination of their accreditation;

      2) the procedure for carrying out exchange trades in the trading modes, established by Article 15-1 of this Law;

      2-1) the procedure for carrying out exchange trades in futures contracts;

      3) the procedure for the payments settlement on transactions with commodities, concluded in exchange trades;

      3-1) the procedure of interaction with self-regulatory organizations, as well as ensuring the legality of the exchange transaction by brokers and dealers;

      4) the conditions and procedures for suspension and resumption of trading on the commodity exchange;

      5) the procedure for the formation and organization of the activity of exchange arbitrage, as well as dispute resolution mechanisms, related to the conclusion of exchange transactions with exchange commodities;

      6) the procedure for adoption (approval) of the documents on exchange trading;

      7) the procedure for accounting and registration of transactions on the commodity exchange;

      8) the procedure for submission of reports to the authorized body by the commodity exchange;

      9) the procedure for the public and other procurement through the commodity exchange;

      10) the procedure for posting the information about holding a tender on the Internet site of the commodity exchange.

      Footnote. Article 10, as amended by the Law of the Republic of Kazakhstan dated 10.07.2012 No. 36-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 27.10.2015 No. 364-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 11. Members of the commodity exchange

      1. Is excluded by the Law of the Republic of Kazakhstan dated 24.05.2018 No. 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

      2. Membership to the commodity exchange gives the right to participate on the exchange trade in accordance with this Law.

      3. Legal entities, affiliated with the commodity exchange may not be members of the commodity exchange.

      Footnote. Article 11, as amended by the Law of the Republic of Kazakhstan dated 10.07.2012 No. 36-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 24.05.2018 No. 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 12. Employees of a commodity exchange

      1. Employees of a commodity exchange are individuals that are in an employment relationship with the commodity exchange and directly perform work under an employment contract. Employee of a commodity exchange is prohibited to be simultaneously in labour relations with the members of the commodity exchange.

      2. Employees of a commodity exchange are prohibited from participating in the exchange transactions, as well as use of commercial information for their own benefit.

      Footnote. Article 12, as amended by the Law of the Republic of Kazakhstan dated 10.07.2012 No. 36-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 4. ACTIVITIES OF COMMODITY EXCHANGE Article 13. Activities of commodity exchange

      1. The primary activity of commodity exchange is organization and conducting of exchange trading.

      2. Commodity exchange performs the following functions:

      1) organization and conducting of exchange trading;

      2) registration and execution of transactions, made on a commodity exchange, including transactions with spot goods;

      2-1) revealing the facts of price manipulation;

      2-2) formation of stock quotes;

      2-3) accreditation of members of the commodity exchange;

      2-4) control over the compliance of the accredited members of the commodity exchange with the requirements, established by the exchange trading rules, their compliance with the requirements of these rules;

      3) organization and payments settlement of exchange transactions;

      4) fixing the exchange price for goods as a result of trading on a commodity exchange;

      5) development and adoption of the rules of exchange trading on the basis of model rules of exchange trading;

      6) organization of expertise for quality of the exchange commodity, sold through exchange trading, at the request of the participant of exchange trade;

      7) providing organizational, consulting, information and methodological services, associated with exchange trading;

      8) providing analytical studies of the exchange commodity market;

      9) issue of printed materials, related to the information on exchange activities;

      10) organization of training courses on training and advanced training of participants in the exchange commodity market;

      11) operation of trading system of a commodity exchange;

      12) development of international exchange trading.

      3. The commodity exchange shall not have the right to combine its activity with brokerage, dealer and depository activities, as well as with securities management activities.

      4. Commodity exchange is entitled to conclude agreements on their own behalf with foreigners and legal entities, established under the legislation of another state within the rights, granted by this Law and other legislative acts of the Republic of Kazakhstan.

      Footnote. Article 13, as amended by the Law of the Republic of Kazakhstan dated 10.07.2012 No. 36-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 13-1. Public procurement through commodity exchange

      1. Public procurement through commodity exchange is carried out according to the procedure provided for by model rules of exchange trading.

      2. Public procurement through commodity exchange is carried out in dual counter auction.

      3. Services to implement public procurement through commodity exchanges are provided for the customer on a reimbursable basis within the funds, provided in the budget of the customer for the relevant year.

      4. Is excluded by the Law of the Republic of Kazakhstan dated 27.10.2015 No. 364-V (shall be enforced from 01.01.2017).
      Footnote. Chapter 4 is supplemented by Article 13-1 in accordance with the Law of the Republic of Kazakhstan dated 10.07.2012 No. 36-V (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by the Law of the Republic of Kazakhstan dated 27.10.2015 No. 364-V (shall be enforced from 01.01.2017).

Article 13-2. Rights and obligations of the Commodity exchange

      1. A Commodity exchange shall have the right to:

      1) determine, in accordance with Article 15-1 of this Law, the trading regimes in which exchange trades are carried out;

      2) carry out exchange trades in futures, options;

      3) exercise other rights, stipulated by the legislation of the Republic of Kazakhstan on commodity exchanges.

      2. The Commodity exchange shall be obliged to:

      1) comply with mandatory requirements for electronic trading system of commodity exchanges;

      2) have its own Internet resource;

      2-1) post the current list of accredited members of the commodity exchange on its own Internet resource;

      The list should contain information about the name, location, surname, name and patronymic (if it is specified in the identity document) of the head and employees- accredited members of the commodity exchange.

      In case of change of name, location, as well as change of the head and (or) change of the staff of commodity exchange members, the commodity exchange shall update the list within three working days from the date of receipt of information from the commodity exchange members to the commodity exchange;

      3) not disclose commercial secrets;

      4) post the results of exchange trades on its own Internet resource no later than the working day following the trading day;

      5) is excluded by the Law of the Republic of Kazakhstan dated 24.05.2018 No. 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication).
      Footnote. Chapter 4 is supplemented with Article 13-2 in accordance with the Law of the Republic of Kazakhstan dated 27.10.2015 No. 364-V (see Article 2 for the procedure of enforcement); as amended by the Law of the Republic of Kazakhstan dated 24.05.2018 No. 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 No. 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 14. Revenues of commodity exchange

      1. Revenues of commodity exchange are generated by the membership and annual contributions of members of commodity exchange, payments for the use of exchange property, registration and execution of exchange transactions and from other income, not prohibited by the legislation.

      2. Commodity exchange shall be entitled to establish:

      1) the size and order of making guarantee contributions of members of commodity exchange;

      2) the amount of payments for participation in the trade in accordance with the rules of exchange trade;

      3) the minimum and maximum limits of price levels on a particular exchange good within a single trading day based on the prices established as a result of previous trades, for the suspension of trading in order to prevent speculative actions.

      3. Commodity exchange is prohibited from establishing the amount of remuneration, charged by brokers and dealers for mediation in exchange transactions.

      4. Amount of payments, charged from members of the commodity exchange, are governed by the rules of exchange trading and should be available to any participant of exchange trading.

Article 15. Exchange transaction

      1. Exchange transaction is a transaction, involving property, that admitted to trading on the exchange, and which is concluded on the exchange by participants of trades in accordance with the legislation of the Republic of Kazakhstan on commodity exchanges and the rules of exchange trading.

      2. Transactions, concluded on commodity exchange, but inconsistent with the requirements, provided for in paragraph 1 of this Article, shall not be exchange transactions.

      3. Transactions with the goods, included in the list of exchange commodities, and concluded outside of commodity exchanges, shall be recognized as invalid under the suit of interested parties, the authorized body or prosecutor.

      4. Exchange transactions cannot be performed on behalf of and at the expense of a commodity exchange.

      5. The list of exchange commodities shall contain:

      1) brief names of exchange commodities and their codes in accordance with the Unified commodity nomenclature of foreign economic activity of the Eurasian economic union;

      2) for certain exchange commodities – the minimum size of the delivery lot, in case of equality or exceeding of which their sale shall be subject to implementation only on the commodity exchange;

      3) for certain exchange commodities – the minimum share, subject to mandatory sale through commodity exchanges, as well as the categories of entities, to which such obligation applies.

      Footnote. Article 15 as amended by the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 15-1. Modes of exchange trades

      1. Exchange trading shall be conducted in the following trading modes:

      1) a standard auction mode;

      2) a dual counter auction mode.

      3) dual counter auction mode.

      2. Is excluded by the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

      3. Exchange trades are carried out in the mode of standard auction, taking into account:

      1) disclosure of information on participants of exchange trade or its confidentiality, except for information about the initiator of the auction, which is publicly available;

      2) holding auctions to lower or increase the price;

      3) holding an auction on the order of the buyer or seller of non-standardized goods;

      4) participation in the auction of at least three participants of the auction, including the customer of the auction;

      5) formation of the price of non-standardized goods at which the exchange transaction is concluded, based on the results of the auction and determining it as the lowest price among the bidders for a decrease and the highest price among the bidders for an increase;

      6) introduction of exchange security, unless otherwise provided by the rules of exchange trade.

      4. Exchange trades are carried out in the dual counter auction mode, taking into account:

      1) confidentiality of information on participants of exchange trade;

      2) prohibition of cross-transactions;

      3) formation of the price for the exchange commodity, on which the exchange transaction is concluded, in the process of competing of the proposals of buyers and sellers and determining it as the best price for the buyer (the minimum price from sellers) or as the best price for the seller (the maximum price from buyers);

      4) introduction of exchange security.

      5. The procedure for conducting exchange trades in trading modes shall be determined by the standard rules of exchange trade.

      6. Commodity exchanges keep a separate accounting of transactions for non-standardized goods.

      Footnote. Chapter 4 is supplemented by Article 15-1 in accordance with the Law of the Republic of Kazakhstan dated 10.07.2012 No. 36-V (shall be enforced upon expiry of ten calendar days after its first official publication); is in the wording of the Law of the Republic of Kazakhstan dated 27.10.2015 No. 364-V (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 16. Types of exchange transactions

      The following transactions are made in a commodity exchange:

      1) transactions with the mutual transfer of rights and obligations in respect of spot goods, including transactions related to the international business transactions;

      2) futures transactions;

      3) option transactions;

      4) transactions with the mutual transfer of rights and obligations in respect of warehouse documents.

Article 16-1. Funds of commodity exchange to ensure the execution of exchange transactions

      In order to ensure the execution of transactions, concluded at the exchange, the commodity exchange creates the warranty and insurance funds.

      Footnote. Chapter 4 is supplemented by Article 16-1 in accordance with the Law of the Republic of Kazakhstan dated 10.07.2012 No. 36-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 17. Clearing activity on exchange transactions

      1. Clearing activity on exchange transactions shall be carried out by the clearing center of the commodity exchange.

      2. The clearing center of a commodity exchange shall be an independent clearing organization with which the commodity exchange has concluded a contract for clearing services. At the same time, clearing service of the commodity exchange by a foreign legal entity with performance of functions of its clearing center shall not be allowed.

      3. Is excluded by the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

      4. The activity of the clearing center of the commodity exchange on exchange transactions should be carried out on the territory of the Republic of Kazakhstan in accordance with the legislation of the Republic of Kazakhstan on commodity exchanges.

      5. To carry out its activity, the clearing centers of the commodity exchange must have a hardware-software complex, providing automation of the clearing process and meeting the requirements, established by the authorized body.

      6. Depending on the exchange transactions for which clearing activity is carried out, the commodity exchange clearing centers shall perform the following functions:

      1) collect and process information on concluded exchange transactions;

      2) carry out accounting and confirmation of the conditions of concluded exchange transactions;

      3) offset mutual claims and obligations of the parties, involved in the calculations, conducted as a result of the exchange transactions;

      4) accept and keep records of exchange security of participants in exchange trades;

      5) determine the requirements and (or) obligations of the parties on exchange transactions, arrange calculations on them;

      6) support the execution of exchange transactions.

      7. The procedure for conducting clearing activity on exchange transactions shall be determined by the authorized body.

      8. The requirements of this Article do not apply to clearing activity for futures and options transactions, which implementation procedure is regulated by the legislation of the Republic of Kazakhstan on the securities market.

      Footnote. Article 17 is in the wording of the Law of the Republic of Kazakhstan dated 27.10.2015 No. 364-V (see Article 2 for the procedure of enforcement); as amended by the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 18. Exchange price

      1. The exchange price of goods is formed as a result of quotations of exchange commodities.

      2. Commodity exchanges place quotes on commodities on their own Internet resource.

      Footnote. Article 18 as amended by the Law of the Republic of Kazakhstan dated 27.10.2015 No. 364-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 5. BROKER AND DEALER ACTIVITIES. COMMERCIAL CONFIDENTIALITY AT COMMODITY EXCHANGE Article 19. The order of activities of broker and dealer

      1. Brokerage and dealer activity on the commodity exchange shall be carried out on the basis of accreditation in the commodity exchange.

      In case of exclusion from accreditation in the commodity exchange for negative reasons, brokers and (or) dealers may not be accredited in other commodity exchanges for two years.

      2. Brokers and dealers are required to comply with the requirements, established by this Law and other legislative acts of the Republic of Kazakhstan, the regulatory legal acts of the authorized body, the internal documents of commodity exchange.

      3. The relations between the broker and its clients shall arise on the basis of the contract on rendering brokerage services to which norms of the civil legislation of the Republic of Kazakhstan are applied.

      4. An individual may not be the head of two or more brokers and (or) dealers.

      Footnote. Article 19 as amended by the Law of the Republic of Kazakhstan dated 16.05.2014 No. 203-V (shall be enforced upon expiry of six months after its first official publication); dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 19-1. Activities of a self-regulatory organization and membership (participation) in a self-regulatory organization

      1. The self-regulatory organization shall carry out its activities in accordance with this Law, the Law of the Republic of Kazakhstan "On Self-regulation", the charter, standard and rules of the self-regulatory organization.

      2. Membership (participation) in a self-regulatory organization shall be carried out on a voluntary basis.

      3. Members (participants) of the self-regulatory organization shall be brokers or dealers. Brokers and dealers may be the members (participants) of only one self-regulatory organization.

      4. The terms and procedure for admission to membership (participants) and termination of membership (participation) in a self-regulatory organization shall be determined by the charter, standard and rules of the self-regulatory organization, as well as the laws of the Republic of Kazakhstan.

      The decision on non-admission to the membership (participants), exclusion from the members (participants) of the self-regulatory organization may be appealed in the manner prescribed by the legislation of the Republic of Kazakhstan.

      5. The self-regulatory organization shall be obliged to place the list of members (participants) of the self-regulatory organization on its own Internet resource. The list should contain information about the name, surname, first name and patronymic (if it is specified in the identity document) of the head and employees-members (participants).

      In case of change of the head and (or) change of the staff of members (participants), the self-regulatory organization updates the list within three working days.

      6. Control of the self-regulatory organization over the activities of its members (participants) shall be carried out in the manner and on the grounds, established by the Law of the Republic of Kazakhstan "On Self-regulation".

      At the same time, the procedure for organizing and conducting inspections of members (participants) of the self-regulatory organization shall be determined by the rules of a self-regulatory organization, agreed with the authorized body.

      7. Membership (participation) in a self-regulatory organization shall be terminated on the following grounds:

      1) at the request of the broker and dealer;

      2) in case of repeated violation by a member (participant) of this Law, the rules of exchange trade, the charter, standards and rules of a self-regulatory organization.

      Members (participants) of a self-regulatory organization whose membership (participation) has been terminated for negative reasons, as well as heads and employees, who have violated this Law, may not participate in exchange trading for a period of at least two years.

      8. Exclusion from the register of self-regulatory organizations shall be carried out in the manner and on the grounds, established by the laws of the Republic of Kazakhstan.

      Footnote. The Law is supplemented by Article 19-1 in accordance with the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 20. Conclusion of transactions by a broker and a dealer

      1. Conclusion of exchange transactions shall be carried out by a broker in accordance with the order of the client, by a dealer – in their own interests and at their own expense. Types of the clients’ orders, their content and execution shall be established by the internal documents of the commodity exchange.

      2. Execution of the client's order shall be carried out by a broker in compliance with the terms of the transaction, specified in this order. If in conclusion of transaction, there is a need to change the terms of the transaction, a broker shall be obliged to coordinate their actions with the client.

      Footnote. Article 20 is in the wording of the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 21. Relations between a broker and his/her clients at the commodity exchange

      The commodity exchange within its powers shall regulate the relations between brokers and their clients, apply measures against the violators of exchange trading.

      Footnote. Article 21 is in the wording of the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 22. Requirements to the internal documents of brokers and dealers and record keeping of the concluded exchange transactions

      1. Internal documents of the commodity exchange for brokers and dealers must contain the conditions to ensure protection of information, constituting a commercial secret at the commodity exchange, that do not allow their use in the interests of participants of exchange trade, their representatives or third parties.

      2. Brokers shall be obliged to keep a record of the concluded exchange transactions separately for each client and to store information about these transactions for five years from the date of the transaction.

      Footnote. Article 22 as amended by the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 23. Commercial secret at the commodity exchange

      1. Commercial secret shall include:

      1) information on the registered participants of exchange trade;

      2) information about transactions, concluded at the commodity exchange.

      2. Brokers and dealers are not entitled to admit actions (inaction) that may entail a violation of the natural pricing and destabilization of goods market.

      3. A person that has the information, constituting a commercial secret shall be a person that, by reason of his (her) official position has access to the information.

Article 24. Presentation of information on the activities of commodity exchanges, constituting commercial secrets

      1. The information, constituting a commercial secret at the commodity exchange, shall not be disclosed, except as set forth in paragraphs 2 and 3 of this Article.

      2. The information, constituting a commercial secret may be represented to participant of exchange trade in respect of his (her) rights or his (her) representative on the basis of a power of attorney, executed in accordance with the legislation of the Republic of Kazakhstan.

      3. The information, constituting a commercial secret at the commodity exchange, shall be submitted to:

      1) the bodies of inquiry and preliminary investigation: on the criminal cases under their production with the sanction of a prosecutor;

      1-1) to the national security agencies and the State Security Service of the Republic of Kazakhstan with the sanction of the prosecutor at their request to provide information necessary for prevention, opening and suppression of intelligence and (or) subversive actions;

      2) the courts: on the cases under their proceedings on the basis of decisions, resolutions;

      3) the prosecutor: in execution of the order on examination within his (her) competence on the materials under his (her) consideration;

      4) state and private bailiffs: in cases of enforcement proceedings in their proceedings on the basis of decision of the bailiff, certified by the seal of the justice authority or the seal of a private bailiff and authorized by the prosecutor;

      5) the authorized body: on the request within its competence;

      Note of the RCLI!
      Paragraph 3 is provided to supplement by subparagraph 5-1) in accordance with the Law of the Republic of Kazakhstan dated 18.11.2015 № 412-V (shall be enforced from 01.01.2020).

      6) the authorized body for financial monitoring: for the purpose and in the manner, prescribed by the Law of the Republic of Kazakhstan “On counteraction to legalization (laundering) of criminally-obtained income, and the financing of terrorism”;

      7) to the antimonopoly body: in the order and manner stipulated by the Entrepreneurial code of the Republic of Kazakhstan.

      Footnote. Article 24, as amended by the Laws of the Republic of Kazakhstan dated 28.08.2009 No. 192-IV (shall be enforced from 08.03.2010 ); dated 21.06.2012 No. 19-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 15.01.2014 No. 164-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 10.06.2014 No. 206-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 29.09.2014 No.239-V(shall be enforced upon expiry of ten calendar days after its first official publication); dated 28.12.2016 No. 36-VI (shall be enforced upon expiry of two months after its first official publication); dated 24.05.2018 No. 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 21.01.2019 No. 217-VI (shall be enforced upon expiry of three months from the date of its first official publication).

Chapter 6. STATE CONTROL IN THE FIELD OF COMMODITY EXCHANGES

Article 25. State control over compliance with the legislation of the Republic of Kazakhstan on commodity exchanges

      1. State control over compliance with the legislation of the Republic of Kazakhstan on commodity exchanges shall be carried out in the form of unscheduled inspection, preventive control with a visit to the subject (object) of control, as well as preventive control without visiting the subject (object) of control.

      2. State control over the activities of self-regulatory organizations shall be carried out through inspections and preventive control in accordance with the Entrepreneurial code of the Republic of Kazakhstan.

      3. Unscheduled inspection and preventive control with a visit to the subject (object) of control shall be carried out in accordance with the Entrepreneurial code of the Republic of Kazakhstan.

      4. Preventive control without visiting the subject (object) of control shall be carried out in accordance with the Entrepreneurial code of the Republic of Kazakhstan and this Law.

      Footnote. Article 25 is in the wording of the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication)

Article 26. The order of audits of the activity of commodity exchanges

      Footnote. Article 26 is excluded by the Law of the Republic of Kazakhstan dated 17.07.2009 No. 188-IV (the order of enforcement see Article 2).

Article 27. Procedure for conducting preventive control without visiting the subject (object) of control

      1. Preventive control without visiting the subject (object) of control shall be carried out by the authorized body by comparing the information obtained from various sources of information on their activities.

      2. The objectives of preventive control without visiting the subject (object) of control shall be timely suppression and prevention of violations, providing the subjects of control with the right of independent elimination of violations, revealed by the results of preventive control without visiting the subject (object) of control, and reducing the administrative burden on them.

      3. Preventive control without visiting the subject (object) of control shall be carried out by analyzing the report, submitted by the subjects of control, as well as other information about the activities of the subject of control.

      4. In case of detection of violations by the results of preventive control without visiting the subject (object) of control in actions (inaction) of the subject of control in the sphere of commodity exchanges, the control body shall draw up and send the recommendation no later than ten working days from the date of detection the violations.

      5. A recommendation sent by one of the following methods shall be considered delivered in the following cases:

      1) on purpose – from the date of mark in the recommendation on receipt;

      2) by mail – by registered letter;

      3) electronically – from the date of sending to the e-mail address of the subject of control, specified in the letter at the request of the authorized body.

      6. The recommendation on elimination of violations, revealed by the results of preventive control without visiting the subject (object) of control shall be executed within ten working days from the day following the day of its delivery.

      7. In case of disagreement with the violations, specified in the recommendation, the subject of control shall have the right to send an objection to the authorized body, that sent the recommendation, within five working days from the day following the day of delivery of the recommendation.

      8. Non-execution in the established term of the recommendation on elimination of violations, revealed by the results of preventive control without visiting the subject (object) of control, shall entail imposition of preventive control with a visit to the subject (object) of control by inclusion in the semiannual list of preventive control with a visit to the subject (object) of control.

      9. Preventive control without visiting the subject (object) of control shall be carried out no more than once a quarter.

      Footnote. Article 27 is in the wording of the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 28. Improvement notice of the authorized body

      Improvement notice of the authorized body is executed by commodity exchanges within the period prescribed in the improvement notice, but not later than thirty calendar days from the date of receiving it.

Chapter 7. FINAL PROVISIONS Article 29. Responsibility for violation of the legislation of the Republic of Kazakhstan on commodity exchanges

      Violation of the legislation of the Republic of Kazakhstan on commodity exchanges entails responsibility in accordance with the Laws of the Republic of Kazakhstan.

Article 30. Transitional provisions

      1. Commodity exchanges, established before the enactment of this Law, are required up to 1 January, 2010 to bring its activities into compliance with this Law.

      2. Failure to comply with the requirement of paragraph 1 of this Article shall be the basis for a presentation to the court a demand for liquidation of a legal entity by the authorized body.

Article 31. Procedure for the enactment of this Law

      1. This Law shall be enforced upon expiry of six months after its first official publication.

      2. The Law of the Republic of Kazakhstan dated April 7, 1995 “On Commodity Exchanges” is recognized as invalid (Bulletin of the Supreme Council of the Republic of Kazakhstan, 1995, No. 3-4, Art. 26; Bulletin of the Parliament of the Republic of Kazakhstan, 1997, No.11, Art. 143; 2003, No. 15, Art. 139; 2004, No. 23, Art. 142).

The President


of the Republic of Kazakhstan

N. Nazarbayev


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