Shares (stocks) are equity securities certifying a holder’s participation in the issuer’s capital.

Bonds are debt securities that represent an obligation of the issuer.

Foreign securities are securities issued by foreign issuers.

An issuer is a legal entity that registers and issues its own securities in order to raise money for its business. The most common securities issued by issuers are shares and bonds, but they may also include derivative instruments and units of mutual or exchange-traded funds (ETFs). A state, when issuing currency, also acts as an issuer.

Units are an instrument of collective investment — a share in the assets of an investment fund belonging to an investor in proportion to the number of units they hold.

Derivative financial instruments (derivatives) — futures, options, forwards, swaps, and other derivative financial instruments.

ETFs/exchange-traded funds are instruments whose value depends on the composition of the underlying portfolio (the fund’s assets and market conditions).

Currency transactions are the purchase/sale of foreign currency (exchange transactions) in non-cash form.

Exchange activity is a process of the modern economy. On an exchange, securities, goods, derivative financial instruments and services are bought and sold in an organized manner, either on one’s own behalf or in the interests of clients.

The stock market is the place where shares, bonds and other assets are traded. The concept of the market covers not only the transfer of securities but also other operations with them, such as issuance and taxation. It also allows for fair price formation.

A stock exchange is a key element of the stock market that deals with transactions involving various types of securities, including shares, bonds, and fund units, as well as derivative financial instruments such as futures and options.

Joint-Stock Company “Central Securities Depository” (KCSD), or the Central Depository, is the main record-keeping and settlement institution of the financial market of the Republic of Kazakhstan. It keeps records of all securities, monitors the transfer of ownership rights to them, and carries out settlements for exchange transactions.

The main goal of anyone managing their personal finances is to preserve and grow their savings. When used correctly, stock market instruments make it possible to protect savings from inflation and create additional sources of income. But first of all, it is important to understand the basics: exactly where securities are bought, which intermediaries can be used to do this, how to check the license of a broker or management company, what risks investing carries, and how to control your assets after purchase. Only after that should you move on to choosing a specific broker and instruments.

Transactions are concluded either on the organized market — through an exchange, or on the unorganized market — by direct agreement between the buyer and the seller. In Kazakhstan, the main organized platforms are the Kazakhstan Stock Exchange (KASE) and the exchange of the Astana International Financial Centre (AIX).

Under trust management, the investor transfers money or securities to a management company, which independently makes investment decisions within the framework of an investment declaration — a document that defines where investments may be made, what restrictions apply, and what level of risk is acceptable. Unlike a Broker, a management company does not wait for a separate instruction for each transaction.

A private investor usually uses the services of one of three types of intermediaries:

Difference between a Broker and a Manager

How can you verify that a broker or manager is acting legally? You need to make sure the company has a valid license. This can be checked on the website of the regulator — the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (ARDFM) — in the “Financial Markets” section, subsection “Securities Market and Pension Asset Management”. The company’s details on the regulator’s website must be verified against the data specified in its license.

Fake brokers are fraudsters — individuals or companies showing signs of dishonest activity. Their main hallmark is the absence of a license from the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market to operate on the securities market.

Fraudsters may persistently call from unregistered numbers, and send emails and messages with scans of forged documents related to investing in securities. Fraudsters try to lure as many trusting clients as possible through aggressive advertising, misleading citizens with promises of stable, high returns.

What signs can help distinguish a genuine Broker from a fraudster?

• The Broker’s license is posted on the company’s official website and matches the data of the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (the Regulator). A list of brokerage and dealer companies holding an official license can be found on the Regulator’s website in the “Registers and Permits” section. You can also check the list of brokers by category (currency, securities) on the website of the Kazakhstan Stock Exchange.
• A brokerage agreement is concluded only in writing.
• Money is accepted exclusively in non-cash form — Brokers are not entitled to accept cash.
• The company does not promise guaranteed returns.

Precautions:

• Do not trust offers of “guaranteed” profit.
• Do not transfer money to unknown persons or to suspicious accounts.
• Do not click on suspicious links or install apps from unverified sources.
• Check information about companies only through official sources and state registers.
• If you wish to invest, study the investment markets and contact the official offices of verified companies.

The first step towards investing is choosing a Broker and signing an agreement with them. The main rule of legal literacy states: always read the documents you sign.

The terms of the Brokerage agreement, including the Broker’s rates (commissions) for the services offered, must be carefully studied by the client. Every clause of the agreement should be carefully reviewed, including the clauses on:

• the rights and obligations of the parties;
• the amount of the Broker’s commission;
• the procedure for submitting client instructions;
• the form and frequency of reporting to the client;
• the procedure for terminating the agreement.

Income on the stock market is never guaranteed. The value of securities can both rise and fall, and no broker has the right to promise a client profit or the absence of losses.

Important: if an intermediary promises guaranteed high income, this is a clear sign of fraud.

The amount needed to start investing is determined by the client independently.

You can start even with minimal amounts by buying inexpensive shares, fund units or bonds. Clients are advised to use only spare money — do not take out loans or use your last savings for investing.

A Broker is prohibited from:

• carrying out transactions without the client’s instruction;
• using the client’s money for its own interests;
• disposing of the client’s securities without written permission;
• acting in the interests of third parties without the client’s consent.

Protection of the rights and legitimate interests of investors on the stock market is carried out through a claims procedure and through the courts. Disputes are resolved through negotiations, mediation, and applications to the judicial bodies of the Republic of Kazakhstan. From January 1, 2027, disputes will also be considered by the Financial Ombudsman.

The Financial Ombudsman is an independent person who considers disputes between consumers of financial services and financial organizations out of court.

Applying to the Financial Ombudsman is free of charge for individuals and allows an attempt to settle a conflict without a lengthy court process. Filing a complaint makes sense in cases where a financial organization has already received a written request but has not resolved the problem or has given a response that does not satisfy the applicant.

You should carefully consider whether transactions with financial instruments (securities, derivative financial instruments, purchase/sale of currency, etc.) on the stock market, and possible losses, are acceptable for you as an investor in light of your financial capabilities.

In general, the term “risk” refers to a certain probability of the outcome of an event deviating from the expected result.

In investing, this term refers to the probability of an adverse event occurring that negatively affects the financial result of a transaction, i.e. it leads to:

• receiving income lower than forecast/calculated (a shortfall in income);
• a complete absence of income after the completion of the operation, transaction, or investment period;
• the loss of part of the invested funds;
• the complete loss of investment capital.

Key risks:

• market risk — the risk of a decline in the value of a financial instrument due to changes in the situation on financial markets, economic conditions, or investor sentiment;
• currency risk — the risk of loss or a decrease in income due to a change in the exchange rate of a foreign currency;
• country (transfer) risk — the risk of incurring expenses (losses) due to the insolvency or unwillingness of a foreign state, or a resident of a foreign state, to meet its obligations;
• liquidity risk — the risk that the Client will not be able to sell a financial instrument at the expected price or will not be able to sell it at the required moment in time;
• credit risk/issuer risk — the risk that the issuer will fail to meet its obligations or that its financial position will deteriorate;
• operational risk and infrastructure risk — the risk of losses or the unavailability of operations due to technical failures or limitations of the settlement, depository, trading or other infrastructure.

A personal account is needed to register an investor’s rights to securities.

A personal account can be opened in several ways:

• at a personal meeting with a Broker at their office;
• through the Broker’s mobile app;
• via an online application on the Broker’s website.

The Broker opens the account for the investor at the Central Depository. All accounts for securities transactions are opened at the Central Depository, where investors’ assets are also held in personal accounts, ensuring the safety of clients’ funds and the transparency of all transactions.

• an order to open a personal account;
• an individual’s questionnaire;
• an identity document;
• consent to the disclosure of information constituting a secret protected by law;
• a nominee holding agreement — if the investor uses the services of a broker.

• an order to open a personal account;
• a legal entity’s questionnaire;
• a copy of the certificate of state registration;
• the register of shareholders/participants of the legal entity;
• the resolution/order appointing the chief executive, and identity documents of the executives;
• a copy of the legal entity’s charter;
• a document with notarized signature samples of the representatives;
• a nominee holding agreement — if using the services of a broker.

Registration takes place in the Central Depository’s accounting system on the basis of counter-orders from the parties to the transaction, an order from the Broker (if the client acts through them), or other documents required by law — for example, a certificate of inheritance rights in the case of inherited securities.

• the authority of the person who submitted the order;
• the order’s compliance with the established form;
• the feasibility of carrying out the operation;
• the availability of securities or money in the accounts;
• the absence of encumbrances on the financial instruments.

• the order does not comply with the established form;
• the securities are subject to an encumbrance;
• there are insufficient securities or funds in the accoun;
• the transaction does not comply with the law;
• not all necessary documents have been submitted.

Rights are confirmed by a statement from the personal account, which can be obtained from the Broker or from the Central Depository. If the information differs, the data in the Central Depository’s accounting system takes priority — it is considered final.

A client who is an individual can obtain qualified investor status, which gives the individual access to complex, high-risk, and exclusive financial instruments. To obtain “Qualified Investor” status, an individual must meet at least one of the following requirements:

• pass testing or provide the Company with documents confirming that one or more of the following conditions are met:

1) has a higher education in finance, economics, mathematics, or a higher education in information technology;

2) holds at least one of the following international certificates:

• Chartered Financial Analyst,
• Certified International Investment Analyst,
• Financial Risk Manager,
• other certificates confirming qualification in the financial market;

3) has at least three years of work experience in fields directly related to concluding transactions with financial instruments, preparing investment recommendations, making investment decisions, and/or in the field of managing risks associated with transactions in financial instruments;

4) holds financial assets in an amount exceeding 8,500 (eight thousand five hundred) monthly calculation indices;

5) has carried out at least fifty transactions with securities and/or other financial instruments on the organized securities market and other stock exchanges within the twelve consecutive months preceding the date of filing the application for recognition as a qualified investor.