Open letter of financial institutions - participants of the stock market

/IRBIS, May 10, 01/ - Today most of the professional participants of the stock market of Kazakhstan signed an open letter to be published in mass media, where they express their inagreement with the intervention of the General public prosecutor of Kazakhstan into the activities of the Kazakhstan Stock Exchange and its members. Following is a full text of the open letter. (quote begins) OPEN LETTER OF FINANCIAL INSTITUTIONS - PARTICIPANTS OF THE STOCK MARKET Today Kazakhstan has two tier system for regulating the stock market and its participants, which is accepted all over the world. The first tier is the state represented by the National Securities Commission of Kazakhstan. The second tier is consisted of self-regulatory organizations, including the Kazakhstan Stock Exchange CJSC, whose members are the brokerage- dealing companies. Based on clause 2 of the article 44 of the Law of Kazakhstan "On the stock market", the activities of the Exchange are regulated by internal documents, developed by it independently and adopted at the members' meeting with subsequent approval with the National Securities Commission of Kazakhstan, who supervises the entities of the stock market on behalf of the state. The system of self-regulatory organizations allows the state to set an effective protection mechanism for the investors, make the stock market transparent and controllable, as well as reach a balance of interests among different groups of professionals of the stock market. On February 12, 2001 the members of the Exchange, in compliance with effective law and taking into account the importance of the Exchange's listing for the purchasing the securities using the pension assets, adopted amendments to one of their main internal documents, "Regulation on the securities listing", at the general meeting. The amendments were meant to increase the requirements set to the companies, whose securities are to be purchased by using the pension assets, including the financial stability requirements for the issuer companies, as well as their abilities to meet their obligations. Also, due to an increase in the importance of the official list of category "A" as one of the main indicators reflecting the company's quality, by the general opinion of the Exchange's members it was decided to expand the authorities of the Exchange council on making securities listing decisions. The amendments to the Regulation on the securities listing were approved by the National Securities Commission of Kazakhstan on March 2, 2001 by the resolution #787. Meanwhile, General public prosecutor of Kazakhstan, based on the complaint of SHAHARMUNAIGAS OJSC president, Nurpeisov B.M., started an investigation of the legitimacy of the activities of the National Securities Commission of Kazakhstan and Kazakhstan Stock Exchange CJSC. During the investigation the General prosecutor suspended the resolution #787 of the National Securities Commission of Kazakhstan, where these the Regulation on the securities listing amendments have been adopted, hence they were suspended. Meantime, based on the law, Kazakhstan Stock Exchange CJSC is a non- commercial and self-regulatory organization. The article 37 of the law "On the stock market" clearly states that the Stock Exchange is not dependent on the state bodies of Kazakhstan on the stock market. This case contradicts with the effective law that regulates the stock market of Kazakhstan and it is nothing but a rude intervention of the state bodies into the activities of the Exchange and its members. Considering an increasing interest of foreign investors into the country's stock market, such intervention can worsen the investment climate in the country. The amendments to the Regulation on the securities listing, which are discussed now, have only one task, to protect the pension deposits of the population from unjustified risks and are a joint decision of 22 members of the Exchange, the professionals of the stock market, among them major private financial institutions of the country. We do not understand why the complaint of a single securities issuer, who has not demonstrated himself on the stock market and claiming for one of the biggest borrowings on the Kazakhstani market of private capitals that exceed his own several times, can be put against the decision of the qualified majority of the stock market entities. By publishing this open letter, we hope that after the investigation the General prosecutor will cancel its resolution "On suspension of an illegitimate legal act", dated April 25, 2001. (end of quote) DOCUMENT WAS SIGNED BY: Sembaev D.Kh. - Chairman of the Association of Financiers of Kazakhstan; Alisutanov A.D. - Chairman of the council of Assets Managers, Chairman of the Board of Halyk Bank of Kazakhstan Pension Assets Management Company CJSC; Mameshtegi S.Kh. - Deputy chairman of the Board of Bank TuranAlem OJSC; Muldashev T.Z. - First deputy chairman of the Board of Bank CenterCredit OJSC; Jusupova N.A. - First deputy of chairman of the Board of KAZKOMMERTSBANK OJSC; Kovalenko N.Z. - First deputy of chairman of the Board of TexaKaBank OJSC; Saidenov A.G. - Chairman of the Board of Halyk Bank of Kazakhstan OJSC; Istaev T.P. - First deputy of chairman of the Board of Temirbank OJSC; Satylganov K.A. - Chairman of the Board of Halyk Bank of Kazakhstan OJSC; Tsyrkan O.G. - Deputy of chairman of the Board of ABN AMRO BANK Kazakhstan OJSC; Ray Webber - Chairman of the Board of HSBC Bank of Kazakhstan OJSC; Kanafin A.B. - Director of KBS SECURITIES LLP; Elemesov A.P. - President of DB SECURITIES (KAZAKHSTAN); Bosjanov T.D. - Executive director of Kazkommerts Securities OJSC; Madieva G.K. - General director of Company CAIFC CJSC; Savin V.S. - Chairman of the Board of Kazakhstan Financial Company OJSC; Tkachenko V.Yu. - Acting president of Greenwich Capital Management OJSC; Turmagambetov K.J. - Executive director of GLOBAL SECURITIES (KAZAKHSTAN) OJSC; Kyshpanakov V.A. - Executive director of KIB ASSET MANAGEMENT Ltd LLP; Baiganin E.M. - General director of R.G. Securities LLP; Omarova T.T. - President of Fondovyi servis CJSC; Seleznev S.S. - Managing director of TuranAlem Securities LLP; Musaeva A.A. - Executive director of Central Asian Trust Company LLP; Iskulov A.J. - President of Pension Assets Management Company Ak-Niet CJSC; Jerebyatev D.I. - Chairman of the Board of Pension Assets Management Company JETYSU CJSC; Abdullaev E.A. - Chairman of the Board of Pension Assets Management Company BTA Asset management CJSC ""; Brejneva N.A. - Chairman of the Board of Pension Assets Management Company ABN AMRO Asset Management.