The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan has prepared a draft resolution that would introduce unified financial product governance requirements for second-tier banks, insurance organizations, microfinance organizations and organizations conducting brokerage activities in the securities market. The measure is designed to implement risk-based conduct supervision under Kazakhstan’s new law on banks and banking activity and to protect retail consumers throughout a product’s full life cycle, from design and target market identification to distribution, servicing and withdrawal. Under the draft, financial institutions would have to identify the target consumer group for each product, assess risks to consumers, ensure product terms are understandable and evaluate whether a product matches consumers’ objectives and needs before offering it. The framework also requires ongoing monitoring of products through analysis of consumer complaints, early contract terminations and other indicators that could reveal product weaknesses and trigger corrective action. Separate requirements would apply to advertising and promotion, including full information on product features, cost and risks and a prohibition on misleading consumers. The draft is also aimed at preventing unfair practices such as concealing or distorting key product terms, tying additional services and manipulating information about product costs. The draft does not provide for Agency approval of financial products. Instead, it sets out a list of products that institutions must notify to the Agency, together with the notification procedure and supporting documents, within 10 working days after a product is approved, amended or discontinued. The draft resolution has been published for public discussion on the Agency’s website and the Open NPA portal.

Original source Back to tracker