On Approval of Instruction on Regulatory Values of Prudential Norms, Methods of Their Calculation for Organizations Performing Investment Management of Pension Assets (стр. 2 )

12) Shares of foreign issuers having rating at least “ВВВ-“ according to international scale of “Standard & Poor's” agency or rating of the similar level from one of the other rating agencies, less reserve for possible losses;

13) Securities of international financial organizations (with consideration of the principal debt and benefits accrued), less reserve for possible losses;

14) Refined precious metals and metal deposits;

15) Depositary receipts, underlying assets of which are shares of foreign issuers having rating at least “ВВВ-“ according to international scale of “Standard & Poor's” agency or rating of the similar level from one of the other rating agencies, less reserve for possible losses;

16) Depositary receipts, underlying assets of which are shares of legal entities of the Republic of Kazakhstan having rating at least “BВ-“ according to international scale of “Standard & Poor's” agency or rating of the similar level from one of the other rating agencies, or rating at least “kzBВ-“ in accordance with national scale of “Standard & Poor's” agency, less reserve for possible losses;

17) Depositary receipts, underlying assets of which are shares of legal entities included into the first and/or the second category of “shares” sector of the official list of stock exchange, less reserve for possible losses;

18) Shares of organizers of securities tenders and other legal entities being a part of securities market infrastructure, shareholders of which are securities market professional participants, less reserve for possible losses;

19) Account receivable (less reserve for possible losses) of legal entities that are not affiliates to Organization, less accounts receivable of employees and other persons, including:

Account receivable (less reserve for possible losses) of legal entities that are not affiliates to Organization, less accounts receivable of employees and other persons overdue for the period less than three days under the terms and conditions of the agreement;

Account receivable (less reserve for possible losses) of legal entities that are not affiliates to Organization, less accounts receivable of employees and other persons overdue for the period less than ninety days under the terms and conditions of the agreement

Securities specified in this point shall not be included in calculation of liquid assets in the following cases:

Sale of securities by Organization on condition of their repurchase, or pledge, or otherwise encumbrance in accordance with legislation of the Republic of Kazakhstan;

Purchase of securities by Organization in auto-repo market on condition of their repurchase;

Purchase by Organization of securities issued by legal entities that are affiliates to Organization

7. The following assets shall be recognized as other assets of Organization:

Base assets of Organization at balance value, including:

Land lots being in ownership C

Buildings and edifices being in ownership;

Machinery and equipment being in ownership, except for transport facilities.

Chapter 4. Prudential Norm 2 “Return on Pension Assets”

8. Return on pension assets being under investment management of Organization, shall be characterized by nominal yield ratio R2, calculated from the formula:

__

Сt

R2 (12, 36, 60) = (-------х 100, where

__

СО

__

Ct – average value of conventional unit of fund’s pension assets which had been under investment management of Organization in accounting calendar month calculated in accordance with point 9 of the Instruction;

__

Cо - average value of a conventional unit of fund’s pension assets which had been under investment management of Organization twelve, thirty six and sixty months ago calculated in accordance with point 9 of the Instruction.

9. Average value of a conventional unit of fund’s pension assets being under investment management of Organization in any month shall be calculated as arithmetical average of value of one conventional unit of pension assets of subject fund which have been under investment management of Organization end of each calendar day of that month calculated in accordance with point 10 of the Instruction.

10. Value of one conventional unit of fund’s pension assets being under investment management of Organization end of any day shall be calculated by Organization from the formula:

PAi

Vі = , where

CUi

Vi – value of one conventional unit of fund’s pension assets being under investment management of Organization end of subject day;

PAі – current value of fund’s “net” pension assets being under investment management of Organization end of subject day calculated in accordance with point 11 of the Instruction;

CUі – total amount of conventional units of fund’s pension assets being under investment management of Organization end of subject day calculated in accordance with point 12 of the Instruction.

11. Current value of fund’s “net” pension assets being under investment management of Organization end of any day shall be calculated from the formula (with consideration of peculiarities set forth by the point 13 of the Instruction):

PAі = PA (і-1) + Ci + Ti + I + Rі + Pі1 + Pі2 - Ai1 - Aі2 - Cfi, where

PA (і-1) - current value of fund’s “net” pension assets being under investment management of Organization end of the previous calendar day;

Ci – pension contributions received by the fund during the subject day;

Ti – transfer of pension assets from other funds received by the fund during the subject day;

Iі – investment income from pension assets of fund, accrued for the subject day;

Rі – remuneration (interest) paid by custodian bank on balance of money on investment account of the fund in subject day;

Pі1 – penalty received by the fund in the subject day for untimely transfer of pension assets;

Pі2 – penalty received by the fund in the subject day for untimely investment of pension assets;

Ai1 – pension payments from the fund, transfer from fund to other funds and liabilities on sums received on investment account of the fund by mistake (except for sums received by mistake, recognized as those by the fund and custodian bank servicing the fund on the day of their receipt, not placed in financial instruments and credited to individual accounts of depositors of the fund / recipients of pension payments) accrued for the subject day;

Aі2 – sums accrued for the subject day before clearing up;

CFi – commission fees of the fund and Organization accrued for the day.

12. Total amount of conventional units of fund’s pension assets being under investment management of Organization end of day shall be calculated from the formula (with consideration of peculiarities specified by the point 13 of the Instruction):

Ci + Ti + Pі1 - Ai1 - Ai2

CUі = CU(і - 1) + , where

C(і - 1)

CU(і-1) – total amount of conventional units of fund’s pension assets being under investment management of Organization end of the last calendar day preceding to the subject day;

V(і-1) – value of one conventional unit of fund’s pension assets being under investment management of Organization end of the last calendar day preceding to the subject day.

13. At primary receipt of fund’s pension assets to investment management of Organization (other than exception specified by the point 14 of the Instruction) calculation of Сі, PAі and CUі rates end of the first day of subject fund’s pension assets being under investment management shall be made on the basis of the following values:

1) H (і-l) – KZT one hundred;

2) PA (і-1) – current value of “net” pension assets of the fund, accepted by Organization into investment management;

3) CU (і-1) – result of division of current value of “net” pension assets of the fund, accepted by Organization into investment management by KZT hundred.

14. At transfer of fund’s pension assets to investment management from one Organization to another, calculation of one conventional unit value of subject fund’s pension assets shall not be terminated and shall be continued by Organization accepted its pension assets into investment management.

15. R2 ratio shall be calculated by Organization only in respect to those funds, pension assets of which were under investment management of that or another Organization within the last twelve, thirty six, sixty and more months.

16. On the basis of R2 ratio calculations submitted by Organizations, the authorized body shall calculate every month in accordance with point 17 of the Article and post to web-site of the authorized body not later than fifteenth day of the current month values of:

1) R2 ratio for all funds conforming to conditions of point 14 of the Instruction;

2) ratio of average nominal yield for the last full twelve, thirty six, sixty calendar months to date for all funds conforming to conditions of point 15 of the Instruction;

3) adjusted ratio of average nominal yield calculated in accordance with point 17 of the Instruction.

17. Ratio of average nominal yield shall be calculated at current value of “net” pension assets which had been under investment management of subject or other Organizations for twelve, thirty six, sixty or more months (as of the first calendar day of the first month of the period over which calculation of R2 ratio was made) as weighted average of R2 ratios for one and the same period for all funds conforming with conditions point 15 of the Instruction.

Adjusted ratio of average nominal yield shall be calculated as weighted average at current value of “net” pension assets which had been under investment management of subject or other Organizations for sixty and more months (as of the first calendar day of the first month of the period over which calculation of R2 ratio was made), value of R2 ratios for one and the same period for funds, value of nominal yield ratio of which does not exceed one hundred and thirty per cent of value of average nominal yield ratio for the correspondent period calculated at current value of “net” pension assets which had been under investment management of that or other Organizations for sixty and more months.

18. Deviation of R2 ratio for every fund those pension assets are under investment management of that Organization shall not be below thirty per cent of value of adjusted ratio of average nominal yield for the correspondent period.

19. Organization shall compensate negative difference between nominal return value and minimum return to the fund by means of placing to fund’s bank account at the second-tier bank of the relevant amount of money calculated from the formula:

S = (Vav - Сt)* Yei, where

Vav – required average value of one conventional unit of fund’s pension assets being under investment management of Organization, whereby negative difference between minimum return on pension assets and fund’s R2 ratio shall be excluded;

Ct – average value of one conventional unit of fund’s pension assets which had been under investment management of Organization as of calculating date;

Yei – total amount of conventional units of fund’s pension assets which are under investment management of Organization as of the date of calculation;

Vav value shall be calculated from the formula:

Vav > = ((Rav - (Rav*30 %)+100)/100)*Vо, where

Rav – value of adjusted ratio of average nominal yield on pension assets of accumulative pension funds conforming to calculating date;

Vо – average value of one conventional unit of fund’s pension assets which had been in fund sixty and more months ago before date of calculation performing

20. The specified amount shall be entered to fund’s account within ten calendar days from the date of fund’s request to compensate negative difference between nominal return value and minimum return submitted to Organization.

Requirements under this point shall not be extended to case when Organization possesses license to carry out activity on investment management of pension assets and license to carry out activity on attraction of pension contributions simultaneously with activity on making pension payments.

21. Organization shall inform the authorized body on entering the amount of compensation of negative difference between minimum return and R2 ratio with second-tier bank confirmation within the day next to the day of arrangement of this amount entering.

Chapter 5. Prudential Norm 3

“Investment in Non-Government Securities of One Issuer,

in Deposits at One Second-Tier Bank”

22. Limitations set forth by the Instruction shall be applied in regard to every accumulative pension fund separately at calculation of total investment of Organization in non-government securities of one issuer, in deposits at one second-tier bank.

23. Total investment of Organization in securities issued by one second-tier bank of the Republic of Kazakhstan and in deposits at subject bank, to the extent that investment in voting shares of subject bank is less than ten per cent from total voting shares of subject bank shall not exceed the following values:

On pension assets’ account – ten per cent of volume of pension assets of every separate fund being in investment management of Organization;

On owned assets account – ten per cent of Organization owned assets;

In totality – thirty five per cent of subject bank owned capital stock (except for financial agencies and mortgage bonds) or no greater than fifty per cent of subject bank owned capital stock where the subject bank has long-term investment credit rating at least “BB-“ (according to classification of “Standard & Poor's” agency) or rating of the similar level from one of the other rating agencies.

Investment from pension and owned assets in total in securities issued by one bank or in deposits at one bank shall not exceed twenty five per cent of subject bank owned capital stock (except for financial agencies and mortgage bonds).

24. Total investment of Organization in securities issued by one second-tier bank of the Republic of Kazakhstan, and issuers – bank affiliates which are not second-tier banks, in deposits at the subject bank, shall not exceed the following values:

On pension assets’ account – ten per cent of volume of pension assets of every separate fund being under investment management of Organization, on owned assets account – ten per cent of Organization owned assets, in totality – thirty five per cent of subject bank owned capital stock (except for financial agencies and mortgage bonds), no greater than twenty five per cent of amount of that issuer owned capital (except for financial agencies, mortgage bonds, infrastructure bonds and bonds issued under guarantees of financial agency) or no greater than twenty five per cent of total volume of bonds of one issue of the subject issuer (whichever is the smaller), less than ten per cent of total voting shares of the subject issuer.

If the issuer is an affiliate to the bank which is not the second-tier bank, issues mortgage bonds, then total investment in these bonds shall not exceed values set forth by point 25 of the Instruction.

25. Total investment of Organization in issuer’s bonds which is not the second-tier bank of the Republic of Kazakhstan, including bonds of the foreign issuer, shall not exceed the following values:

On pension assets’ account – ten per cent of volume of pension assets of every separate fund being in investment management of Organization,

On owned assets account – ten per cent of Organization owned assets, in total – twenty five per cent of subject issuer owned capital stock (except for financial agencies, mortgage bonds, infrastructure bonds and bonds issued under guarantees of financial agency) or no greater than twenty five per cent of total volume of bonds of one issue of the subject issuer (whichever is the smaller).

Par value of bonds shall be used at calculation of total investment of Organization in bonds of issuer which is not second-tier bank.

26. Total investment of Organization in issuer’s shares which is not second-tier bank of the Republic of Kazakhstan, including shares of foreign issuer shall be:

On account of pension assets – no greater than fifteen per cent of volume of pension assets of every fund being under investment management of Organization;

On owned assets account – no greater than fifteen per cent of Organization’s owned assets;

In totality – less than ten per cent of total voting shares of the subject issuer.

At calculation of total investment of Organization in issuer’s shares permissible excess of set value shall not be more than three per cent within a period no longer than sixty days with consideration of requirement by point 30 of the Instruction.

27. Rate of investment of Organization in shares of interval mutual investment fund, managing company of which is a legal entity established under legislation of the Republic of Kazakhstan included into official list of stock exchange shall not exceed ten per cent of Organization owned assets.

Total investment of Organization in shares of interval mutual investment fund, managing company of which is a legal entity established under legislation of the Republic of Kazakhstan included into official list of stock exchange, on account of owned and pension assets shall not exceed ten per cent of assets of subject interval unit investment fund.

28. At calculation of total investment of Organization in non-government securities of one issuer, in deposits at one second-tier bank:

1) owned capital of resident bank (issuer) of the Republic of Kazakhstan on the basis of its last quarterly balance published in printed matter in accordance with the Laws of the Republic of Kazakhstan on banking activity or the Laws of the Republic of Kazakhstan on joint-stock companies, or securities provided by securities tenders organizer in accordance with listing procedures;

2) owned capital of the foreign issuer shall be determined on the basis of its last quarterly balance placed in information analysis system Reuters or Bloomberg V. L. Р. or in Internet on site of securities tenders organizer in trading system of which the subject securities are quoted, or on site of subject securities issuer;

3) banks affiliated to each other shall be recognized as one bank. Limitation set as to overall investment no greater than thirty five per cent of bank’s owned capital stock (except for financial agencies and mortgage bonds), shall be applied as to all of those banks;

4) issuers affiliated as to each other and which are not second-tier banks, shall be recognized as one issuer which is not second-tier bank, at that limitations set forth by sub-paragraph four of point 25 and sub-paragraph four of point 26 of the Instruction shall be applied as to all of those issuers. Effect of this sub-point shall not be applied to legal entities being participants of credit bureaus, and legal entities, state-owned shareholding (participatory interest) of which was transferred to “Kazakhstan Holding for Management of State Assets “Samruk” JSC and legal entities those rights of ownership and use of state-owned shareholding (participatory interest) were transferred to “Sustainable Development Fund “Kazyna”.