Mazhilis approved the draft Law on development of the distressed assets market

Special edition №141

In brief

Mazhilis approved the draft Law “On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Development of Distressed Assets Market” (the “Law”).

In details

It is planned to amend a number of legislative acts, including the Law "On banks and banking activities in the Republic of Kazakhstan" dated 31 August 1995.

The existing list of authorized buyers of distressed assets is to be expanded by private investors. The Law stipulates for creation of the institution of service companies for maintenance of non-performing loans. At the same time, the rights under bank loan agreements could be transferred to service companies if the follow ing conditions are simultaneously met:

the size of the service company’s charter capital and / or equity capital of the parent organization is not low er than the established minimum value;
service company is carrying out activities for 3 years from the date of: issuance of permission to the bank or bank holding company to create a subsidiary by the bank acquiring doubtful and bad assets of the parent bank / inclusion of the collection agency in the register;
the absence of (i) unfulfilled and / or existing measures of supervisory response or limited measures of influence applied by the authorized body, and (ii) administrative offenses;
the first head of the service company does not have criminal history on record;
compliance of the service company w ith the requirements established by the authorized body.

In turn, the authorized body w ill maintain a register and post information on service companies that meet the established requirements on its Internet resource.

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