The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan published an overview of its consolidated supervision framework for financial conglomerates, highlighting recent changes to group-wide risk management expectations and the methodology used to assess capital adequacy at conglomerate level. Banks account for around 83% of Kazakhstan’s financial system assets, and the Agency notes that bank conglomerates increasingly combine banks with insurers, securities market participants, distressed-asset managers, and service and technology companies. Against this backdrop, new requirements introduced in December 2024 and effective in 2025 set expectations for a unified, group-wide risk management and internal control system, including risk identification, assessment and monitoring procedures, risk level setting, regular stress testing, and effective information exchange across conglomerate participants. The Agency also describes an enhanced capital calculation approach, including a new procedure for assessing group capital adequacy by comparing actual consolidated capital with aggregated capital needs across all participants, intended to limit capital adequacy improvements driven by intra-group investments. Further work is under way to develop and refine internal assessment models for the insurance sector and securities market similar to SREP and AQR tools used in banking, with the aim of building an integrated system for assessing financial group risks once implemented and automated. The Agency also points to planned legislative reforms, including a new Law on Banks and Banking Activities and updates to insurance and securities market legislation, as enabling further development of consolidated supervision mechanisms.

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