The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan has developed and pilot tested a new model for supervising and assessing professional participants in the securities market. The framework is intended to deepen risk based supervision by improving how the agency evaluates firms as the market develops and client bases expand, with greater weight on investor protection and corporate governance. It is designed to support earlier identification of problem areas, more targeted supervisory intervention and a stronger risk assessment system. The methodology draws on international standards, including IOSCO principles, and on approaches used by foreign regulators such as the European Securities and Markets Authority and the Financial Conduct Authority, adapted to Kazakhstan's market. Assessments are conducted across four core blocks: protection of investors' interests, corporate governance, business model analysis, and protection of client data and assets. Each participant receives a rating that serves as the basis for a supervisory action plan and proposals to improve regulation. Pilot testing identified areas that need further development in market practice, including procedures for assessing clients' investment profiles to help prevent unsuitable product sales, analysis of client transactions for signs of market manipulation, and stronger board involvement in strategy, risk management and internal controls to reduce potential conflicts of interest. Following the pilot, the agency prepared internal guidance for carrying out supervisory assessments under the new model. It plans to apply the framework across the securities market this year, including to large brokers, dealers and investment portfolio managers, and may refine the assessment as new insights emerge. The model's main elements will also be considered in the Securities Market Development Program to 2030 and the new law on the capital market.

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