Minister Issekeshev suggests creating investors' rights protection foundation

ASTANA. December 4. KAZINFORM. /Anar Zhumabekova/ On December 4 the Council of Foreign Investors held the 22nd Plenary Session in Astana. The main issue of the discussion was involvement of foreign investors in implementing the policy of diversification and technological development of Kazakhstan.
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The issue of the rights of investors has been touched upon by Minister Issekeshev at the forum. Kazakhstan is lacking clear mechanisms for protecting investors' rights, said the Minister. Therefore it is vital to form an institute for protection of rights and legitimate interests of investors. The legislation of Kazakhstan allows establishing such kind of an institute. The system of guaranteeing physical persons' deposits that was introduced in Kazakhstan some time ago based on JSC "Kazakhstan Foundation for Guaranteeing Deposits" as well as setting up of a number of other infrastructure organizations contributed to more confidence among the population in the financial sector and its products.

By using the experience of setting up the above foundations it is necessary to study the possibility of setting up an ad hoc body - the Equity Market Investors' Protection Foundation - that will guarantee the same insured accidents as loans and fund associations. The Foundation would envisage mandatory participation in it of professional participants of the equity market and guaranteeing of investments of retail investors only. The Foundation can be established both at the expense of the government resources and market participants. By doing this it is assumed that investors will be guaranteed against a loss caused by a brokerage firm resulting from illegal dealership and operations with client's equities. To create a comprehensive system aimed at protecting investors' interests in the financial market of Kazakhstan it is expedient to consider the matter of development of a special statutory act.

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