The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan has prepared a package of reforms, set out in a new draft law on banks and banking activity, aimed at upgrading corporate governance standards in banks and supporting financial system stability. The proposals combine new requirements for key control functions with measures to develop independent directors, refine supervisory tools, and tighten rules on related-party relationships and stressed asset management. The draft would introduce fit-and-proper requirements for heads of the risk, internal audit and compliance functions, including higher education, relevant professional experience, an impeccable business reputation, and no corruption offences or criminal record. The Agency does not envisage mandatory regulatory approval of these appointments at hiring. Further changes include developing the role of independent directors to reduce the risk of undue influence by individual shareholders and support more objective and transparent decision-making, expanding use of supervisory “reasoned judgment” and introducing disclosure on when it is applied, clarifying criteria for identifying persons connected to a bank through special relationships in line with international standards, and applying new requirements to stressed assets management organisations (SABU), including shortening the balance-sheet holding period for repossessed property and limiting assignment of claim rights.

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