On Project Financing and Securitization

The Law of the Republic of Kazakhstan dated 20 February, 2006 No.126

Unofficial translation

      Footnote. The title of the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

      This Law establishes the legal basis of project financing and securitization in the Republic of Kazakhstan, determines peculiarities of carrying out of assignment of right of demand and legal regime of property upon project financing and securitization, as well as legal status of special financial company.
      Footnote. The Preamble is in the wording of the Law of the Republic of Kazakhstan dated 12.01.2012 No 539-VI (shall be enforced upon expiry of ten (10) calendar days after its first official publication).

Chapter 1. GENERAL PROVISIONS

Article 1. Basic definitions used in this Law

      The following basic definitions shall be used in this Law:
      1) special financing company – legal entity, created in accordance with this Law for carrying out of transactions of project financing and securitization, for the benefit of which the rights of demand are assigned;
      2) own funds of special financial company – assets, obligations, owned capital and incomes (losses), gained (sustained) upon completion of transactions of project financing and securitization. Allocated assets, bonds (as well as accrued coupon on them) of special financial company shall be included to the own funds of special financial company;
      3) bonds of special financial company – the bonds, on which performance of Issuer Covenants are ensured by the allocated assets;
      4) a primary agreement – an agreement in writing, on which the one party is obliged to create and make a property over to another party or render the services and (or) produce the goods and (or) execute piece of work in the process of usage of created property;
      5) allocated assets – rights of demand, assigned to the special financial company in the transactions of project financing and securitization, money in the accounts at the custodian bank, received on assignedto it the rights of demand, financial instruments, acquired by the special financial company in the results of investment of specified money, money, received in the result of sale of financial instruments, as well as property and property right, arising from creation of additional security;
      6) a debtor – a person, having a current or future money obligation;
      7) project financing – a method of organization of financing of long-term project under assignment of right of demand, ensuring of which shall be the estimated systematic monetary payments for creation and transfer of property, as well as rendering of services and (or) production of goods and (or) execution of work in the process of usage of created property;
      8) transaction of project financing – actions of customer, executor, special financial company, creditors and other persons, directed to establishment of their rights and obligations within implementation of primary agreement, as well as assumption and performance of obligations, ensured by allocated assets;
      9) manager of investment portfolio - professional participants of the securities market, rendering services of special financial company on investment of temporary free entries on allocated assets on the basis of licensing to carrying out of activity on portfolio management;
      10) creditor – individual and (or) legal entity, being bond holder, or legal entity, performing a credit provision upon project financing;
      11) additional security – methods of ensuring performance of obligations of special financial company before the creditors in the form of guarantee, warrantee, pledge, as well as other ways, provided by agreements;
      12) originator – a legal entity, carrying out assignment of right of demand upon conclusion of transaction of securitization;
      13) executor, a legal entity, which in accordance with the primary agreement create and transfer the property, as well as render the services and (or) produces goods and (or) execute work in the process of using of created property;
      14) securitization – financing under assignment of monetary claim by issue of bonds, ensured by allocated assets;
      15) transaction of securitization – acquisition of right of demand and issue of bonds, ensured by allocated assets by the special financial company;
      16) right of demand – monetary claim, existing at the moment of conclusion of agreement of assignment of right of demand (existing rights of demand), as well as monetary claims, which arise in the future from existing obligation or future obligation (future right of demand);
      17) incomes on rights of demand – incomes in monetary form on obligations of debtors, as well as incomes from persons, using property, created on primary agreement, or acquiring goods, works, services in the process of usage of created property;
      18) homogeneity of rights of demand – conformity of right of demand to the general objective standard, determined by prospectus of issue of bonds;
      19) customer – individual or legal entity, the state represented by the Government or local executive body, as well as state bodies, authorized by them, by order of which a primary agreement is implemented;
      20) an authorized body – National Bank of the Republic of Kazakhstan;
      21) affiliated persons – individual or legal entity (except for the state bodies, carrying out the control and supervisory functions within the powers granted to them), having possibility to directly or indirectly determine decisions and (or) have influence to the accepted with each other decisions, as well as by virtue of concluded transaction.
      Footnote. Article 1 is in the wording of the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 2. The legislation of the Republic of Kazakhstan on project financing and securitization

      Footnote. The title is in the wording of the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

      1. The legislation of the Republic of Kazakhstan on project financing and securitization is based on the Constitution of the Republic of Kazakhstan and consists of Civil Code of the Republic of Kazakhstan, this Law and other regulatory legal acts of the Republic of Kazakhstan.
      2. The legislation of the Republic of Kazakhstan concerning the securities market and joint stock companies is distributed to the relations, related to the transactions of project financing and securitization and activity of special financial company, unless otherwise established by this Law.
      3. If the international treaty, ratified by the Republic of Kazakhstan establishes the other rules, than those provided by this Law, the rules of international treaty shall be applied.
      Footnote. Article 2 as amended by the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 2. ORIGINATOR AND SPECIAL FINANCIAL COMPANY

Article 3. Requirements to the originator

      1. Originator is a legal entity, incorporators (sole incorporator) of which fully paid the size of the charter capital of fully paid shares of originator, acquired by them in accordance with foundation agreement.
      2. Originator shall have a right to simultaneously participate in carrying out of separate transactions of securitization.
      3. Originator shall have an audit report for the last year before conclusion of transaction of securitization.

Article 4. Creation and activity of special financial company

      1. Special financial company may be created by originator or other person for participation in transaction of project financing or securitization in organizational-legal form of joint stock company or limited liability company.
      Charter capital of special financial company shall be formed exclusively by money.
      Legal entities, registered in offshore zones or having affiliated persons, registered in the offshore zones, the list of which is established by the authorized body, shall not have a right to directly or indirectly hold and (or) use, and (or) dispose of the voting shares and shares of participation in the charter capital of special financial company.
      2. The name of special financial company shall contain the words “special financial company”. Abbreviated name of the special financial company with the use in the name the abbreviations “SFC” shall be allowed. In the name of special financial company shall be prohibited to use the words, related with the company name of originator or incorporators of special financial company.
      3. Special financial company shall carry out investment of temporary free entries on allocated assets on the basis of agreement with manager of investment portfolio only in the financial instruments, the list of which is established by the authorized body.
      4. Is excluded by the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).
      Footnote. Article 4 as amended by the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 4-1. Peculiarities of formation of bodies of special financial company

      Persons, representing the interests and having the powers shall be entered into composition of bodies of special financial company on requirements of creditors in accordance with the legislation of the Republic of Kazakhstan and charter of special financial company. A person, having unexpungedor outstanding conviction in accordance with the procedure established by law, shall not have a right to hold positions in the bodies of special financial company.
      Footnote. Chapter 2 is supplemented by Article 4-1 in accordance with the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 4-2. Peculiarities of activity of special financial company, created for participation in the project financing1.

      1. Special financial company, created for participation in the project financing, shall have a right to carry out the following types of activity:
      1) conclude the loan agreements, ensured by the allocated assets, in order of implementation of transaction of project financing;
      2) issue bonds, ensured by the allocated assets;
      3) conclude an agreement under assignment of monetary claim with executor on the primary agreement;
      4) implement investment of money, entered into composition of allocated assets, in order of protection of rights of creditors in accordance with the requirements, established regulatory legal acts of the authorized body;
      5) carry out other types of activity in the interests of creditors, necessary for realization of transaction of project financing, except for the types of activity, established by paragraph 2 of this Article.
      2. Special financial company, created for participation in the project financing, shall not have a right to:
      1) act as incorporator (participant, shareholder) of other legal entities;
      2) create the branches and representations;
      3) distribute profits to the shareholders or distribute the net incomes between copartners before performance of obligations, ensure by the allocated assets;
      4) implement the following assignment of right of demand without the consent of creditors;
      5) carry out the types of activity, not related to the transaction of project financing.
      3. Carrying out the types of activity, not related to the transaction of project financing, shall not involve creation of rights and obligations for the special financial company.
      Footnote. Chapter 2 issupplementedbyArticle 4-2 in accordance with the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 5. An audit of financial company

      Special financial company shall be obliged to conduct an audit of annual financial accountability.

Article 5-1. Accountability of special financial company

      Special financial company shall carry out accountability according to the procedure and on conditions, provided by the loan agreements between the special financial company and creditors and (or) conditions of issue of bonds of special financial company, as well as in accordance with Article 13 of this Law.
      Footnote. Chapter 2 is supplemented byArticle 5-1 in accordance with the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 6. Voluntary of reorganization or liquidation of special financial company

      1. Decision on voluntary reorganization and liquidation of special financial company may be accepted by their participants or shareholders:
      1) after confirmation of account on the results of performance of all obligations, ensured by the allocated assets;
      2) upon existence of the consent of all creditors in the case of non-performance or improper performance of obligations, ensured by the allocated assets.
      2. Is excluded by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication)
      3. Upon liquidation of special financial company, levy of execution on allocated assets shall not be allowed. Allocated assets shall be transferred to all creditors or their legal successor proportionally to the amounts of their claims.
      Footnote. Article 6 as amended by the Laws of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall been forced upon expiry of ten calendar days after its first official publication); dated 05.07.2012 № 30-V(shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 2-1. ALLOCATED ASSETS

      Footnote. The Law is supplemented by chapter 2-1 in accordance with the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 6-1. Legal regime of allocated assets

      1. Formation of allocated assets shall be carried out in the results of assignment of right of demand of executor on the primary agreement upon project financing, as well as in the results of assignment of right of demand of originator upon securitization for the benefit of special financial company and in the result of conclusion of other agreements on creation of additional security in the transactions of project financing and securitization.
      2. Allocated assets are separated from own funds of special financial company and any other assets, belonging to any person, or securitization, related to any other transaction, before performance of obligations by the special financial company, ensured by the allocated assets.
      3. Allocated assets shall be used in the interests of protection of rights of creditors upon project financing and securitization. Use of allocated assets for other purposes shall not be allowed.
      4. Recovery on the allocated assets may be enforced only for execution of obligations of special financial company within transactions of project financing or securitization and shall be carried out in the following order:
      1) in the first instance performed the obligations of special financial company, ensured by the allocated assets;
      2) secondarily made the payment for services, related to the transactions of project financing and securitization.

Article 6-2. Management of allocated assets

      1. Manager of investment portfolio shall carry out investment on the basis of agreement for the portfolio management.
      An agreement for portfolio management shall be concluded according to the conditions and procedure, established by the legislation of the Republic of Kazakhstan.
      2. Beside of conditions, provided by the legislation of the Republic of Kazakhstan on security mark, an agreement for portfolio management shall contain:
      1) conditions, procedure and terms of cash proceeds on rights of demand, entering into the composition of allocated assets, and procedure of carrying out of control of their execution;
      2) procedure of interaction of manager of investment portfolio with participants of transactions of project financing and securitization, as well as conclusion of agreements on creation of additional security;
      3) procedure of disclosure of information to the creditors or their representative and an authorized body;
      4) a list of financial instruments, allowed to the acquisition at the expense of allocated assets in accordance with the list, established by the authorized body.
      3. An agreement for the portfolio management may be terminated, along with the general grounds of discharge of a contract, in one of the following cases:
      1) at the initiative of one of the parties of agreement;
      2) upon termination of a license of a manager of investment portfolio, issued by the authorized body.
      Initiator of cancelation of an agreement for the portfolio management shall be obliged to inform a contracting party within thirty calendar days before the date of cancelation in a written form.
      In the case of suspension, termination of a license of a manager of investment portfolio, manager of investment portfolio shall be obliged to inform on it a special financial company in a written form during three calendar days.
      An agreement for the portfolio management shall be considered as cancelled after completion of a procedure of verification of transferred allocated assets of special financial company to the new manager of investment portfolio according to the procedure, established by the authorizes body.
      4. Manager of investment portfolio shall bear responsibility on their obligations before the special financial company of all property belonging to him (her).

Article 6-3. Registration and storage of allocated assets

      1. Allocated assets of special financial company shall be stored and registered on the accounts in the custodian bank in accordance with the custodial agreement.
      2. A custodian agreement shall be concluded between the custodian bank and special financial company, as well as manager of investment portfolio, in the case of investment of temporary free entries on allocated assets of special financial company.
      3. Form of standard custodial agreement shall be developed and approved by the authorized body.
      4. Custodian bank shall be obliged to block (not execute) instructions of a manager of investment portfolio in the case of their inconsistency to the legislation of the Republic of Kazakhstan with prompt notification on it an authorized body and special financial company.
      5. Procedure of carrying out of control of objective placement of assets of special financial company by the custodian bank shall be determined by the authorized body.
      6. Custodian bank shall monthly inform a special financial company on the status of its accounts.
      7. Custodian agreement shall be simultaneously concluded only with one custodian bank.
      8. Custodian agreement may be terminated, along with the general grounds of discharge of a contract, in one of the following cases:
      1) on the ground of relevant decision of executive body of special financial company;
      2) at the request of manager of investment portfolio;
      3) by the decision of custodian bank;
      4) upon termination of a license of custodian bank, issued by the authorized body.
      In the case of suspension, termination of a license of custodian bank, custodian bank shall be obliged to inform on it a special financial company in a written form during three calendar days.
      Initiator of cancelation of custodian agreement shall be obliged to inform the parties of agreement within thirty calendar days until the intended date of cancelation.
      Custodian agreement shall be considered as cancelled after completion of procedure of transfer of assets of special financial company to the new custodian bank according to the procedure, established by the authorized body.

Chapter 2-2. PROJECTFINANCING

      Footnote. The Law is supplemented by chapter 2-2 in accordance with the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 6-4. Incurrence of relations on project financing

      1. Upon transaction on project financing, a customer shall conclude a primary agreement with executor, on which an executor shall acquire a right to the systematic money receipts on a long-term basis in the result of creation and transfer of property, as well as rendering of services and (or) production of goods and (or) execution of works in the process of use of created property.
      2. Executor shall conclude loan agreements on the basis of primary agreement and (or) issue bonds or get funds from the special financial company, ensuring performance of their obligations by assignment of right of demand to the creditors or special financial company on the primary agreement and (or) provision of other security.
      3. Creditors may determine procedure and conditions of execution of their rights and obligations in the relationship with executor and (or) special financial company on the basis of agreement among themselves, as well as provide priority of debt extinguishment of creditors, as well as determine the representative of creditors.
      4. If the state is one of the parties of transaction of project financing, project financing shall be carried out with participation of special financial company, approved by the executor exclusively for implementation of execution of transaction of project financing.
      5. Project financing shall be carried out with participation of special financial company, if there is a requirement of at least one of the creditors.
      6. Cancellation of primary agreement and liability disclaimer on it shall be carried out by its participants in accordance with the Civil Code of the Republic of Kazakhstan in recognition of peculiarities, provided by this Law for the relations on project financing with participation of the state.
      7. Primary agreement shall provide possibility of substitution of executor in the case of non-performance or improper performance of their obligations by executor, determined in a primary agreement.

Article 6-5. Assignment of right of demand upon project financing

      1. Executor shall assign a right of demand, belonging to it, to the creditors or special financial company. Assignable demands shall not be burdened with the rights of third parties. Conditions of assignment and volume of assigned rights of demand shall be determined by the agreement.
      2. An agreement of assignment of rights of demand upon project financing shall be concluded in a written form with compliance with the requirements, established by Article 346 of Civil Code of the Republic of Kazakhstan. Nonobservance of written form of agreement of assignment of rights of demand shall entail its invalidity.
      3. Upon assignment by executor of future demand, it shall transfer to the creditors or special financial company at the moment of conclusion of an agreement of assignment of rights of demand without possibility of transfer of this right to other persons.
      4. Executor shall answer to the creditors or special financial company for validity of transferred rights of demandto them, but not answer for nonfulfillment of this demand by a customer and persons, carrying out the use of property, created on a primary agreement, unless otherwise provided by the agreement of assignment of right of demand.
      5. Rights of demand may be presented from the date of placing into operation of property, created on a primary agreement, unless otherwise provided by primary agreement.

Article 6-6. Project financing with participation of special financial company

      1. Special financial company shall conclude a loan agreement with creditors and (or) carry out issue of bonds, ensuring performance of their obligations by allocated assets.
      2. Special financial company shall transfer money to the executor in accordance with agreement of assignment of right of demand in order of financing or refinancing of its obligations or expenses, incurred by the executor in the result of creation and transfer of property, as well as rendering of services and (or) production of goods and (or) execution of work in the process of use of created property in accordance with primary agreement.

Article 6-7. Ownership title to the objects, created with participation of the state

      Ownership title to the property, created on a primary agreement by order of the state shall subject to the state.

Article 6-8. Peculiarities of assignment of rights of demand to the state

      1. The state shall participate in the project financing as a customer according to the procedure and conditions, established by the Law of the Republic of Kazakhstan “On concessions”.
      2. Choice of executor on a primary agreement shall be carried out on a competitive basis in accordance with the legislation of the Republic of Kazakhstan on concessions.
      3. The list of investment projects, implemented by the state on conditions of project financing, shall be determined by the Government of the Republic of Kazakhstan.
      4. Executor on a primary agreement shall be obliged to inform the state on executed by them assignment of rights of demand of creditors or special financial company in a written form during ten calendar days.

Article 6-9. Peculiarities of substitution of executor upon project financing with participation of the state

      1. In the case of non-performance or improper performance by executor of their obligations, determined in a primary agreement, a customer shall have a right to repudiate an agreement in accordance with the Civil Code of the Republic of Kazakhstan, prevent on it an executor and creditors not later than fifteen calendar days.
      2. Choosing a new executor on a primary agreement shall be carried out in accordance with paragraph 2 of Article 6-8 of this Law with compliance with the following requirements:
      1) provision of competitive documentation, on the ground of which a competition is conducted in order of choosing of a new executor on a primary agreement, shall correspond to the provisions of competitive documentation of previous competition, except for the provisions, changed in recognition of actually performed at the time of re-competitionof conditions of agreement;
      2) competitive documentation shall include demand on performance of obligations by new executor to the creditors according to the procedure and conditions, which are coordinated with them.
      3. During holding of a competition at the choice of a new executor on a primary agreement by customer in coordination with the creditors may be imposed on a temporary performed, procedure of choice and conditions of carrying out of activity of which are determined by the Government of the Republic of Kazakhstan.

Article 6-10. Peculiarities of issue of bonds of special financial company upon project financing

      1. Issue of bonds of special financial company shall be carried out in accordance with the Law of the Republic of Kazakhstan “On security market and this Law.
      2. Special financial company shall have a right to carry out issuance of bonds, ensured by the allocated assets.
      3. Prospectus of issue of bonds of special financial company, besides of details, specified in the legislation of the Republic of Kazakhstan on security market, shall contain:
      1) characteristic of monetary claims, conditions and projected terms of cash proceeds on rights of demand, entering into composition of allocated assets;
      2) purposive appointment of money, received by the special financial company in the result of placement of bonds, conforming to the requirements of this Law;
      3) procedure of provision of information to the bond holders on change of ownership to the property, created on a primary agreement, on introduction of representatives of creditors into the bodies of special financial company and their powers;
      4) the list of expenses of special financial company, related with service of transaction of project financing and investment management of assets, carrying out at the expense of allocated assets.
      4. Special financial company shall not have a right to carry out subsequent issuance of bonds within one of the transaction of project financing, except for the issue of bonds on bonded programs.

Chapter 3. PECULARITIES OF TRANSACTIONS OF SECURITIZATION

      1. Right of demand, being the objects of securitization shall be homogeneous.
      2. Special financial company shall use receipts on allocated assets exclusively to the execution of obligations on bonds, issued by it and payment for services within one of transaction of securitization, as well as in the cases, provided by this Law, to the investment in the financial instruments.
      Footnote. Article 7 as amended by the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 8. Allocatedassets

      Footnote. Article 8 is excluded by the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 9. An agreement of assignment of right of demand upon securitization

      1. By agreement of assignment of right of demand upon securitization, originator shall assign or shall be obliged to assign their future or existing rights of demand to the debtors, derive from relations of originator with debtors, and special financial company shall implement their purchase by transfer of money, ensured by these rights of demand, to the originator.
      2. Originator shall effect collecting of payments on assigned rights of demand with debtors, unless otherwise established by agreement.
      3. Rights of demand, being a subject of assignment on transaction of securitization, shall be determined in the agreement between originator and special financial company so that it is possible to establish existing monetary claim at the time of conclusion of agreement, and future demand, not later than at the time of its occurrence.
      4. An agreement of assignment of right of demand upon securitization shall be concluded in a written form with compliance with the requirements, established by Article 346 of the Civil Code.
      Nonobservance of written form of agreement of assignment of right of demand upon securitization shall entail its invalidity.
      5. In consequence of assignment of right of demand upon securitization, special financial company shall acquire a right to all receipts on rights of demand from the debtors in execution of demands.
      Originator shall not bear responsibility before the special financial company for the fact that realized earnings on rights of demand less than the amount, paid to the originator for acquisition of these rights by the special financial company.

Article 10. Management of allocated assets

      Footnote. Article 10 is excluded by the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 11. Assignment of right of demand upon securitization

      1. Existing right of demand shall be considered as transferred to the special financial company upon availability of concluded agreement from the date of the state registration of issue of bonds.
      2. Upon assignment of future right of demand, it shall be considered as transferred to the special financial company upon availability of condition, provided by paragraph 1 of this Article, after that the right to receive money, which is the subject of assignment of demand, provided by agreement, is occurred. Additional formulation in the subsequent assignment of future right of demand upon occurrence of this right is not required. If the assignment of monetary claim is conditioned by the definite event, it shall enter into force after occurrence of this event.

Article 12. Registration and storage of allocate assets

      Footnote. Article 12 is excluded by the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 13. Registration and accounting on transaction of securitization

      1. Special financial company shall keep accounting records and represent financial accountability separately on own funds and allocated assets, bonds (as well as accrued coupon on them) of special financial company according to the procedure, established by the legislation of the Republic of Kazakhstan.
      2. Allocated assets, which shall be securing obligations on bonds, remaining after approval of account on results of cancelation of these bonds by the authorized body, shall be related to the expenses (losses) of special financial company.
      3. Procedure of carrying out of accounting and preparation of financial statements of special financial company shall be established by the regulatory legal acts of the authorized body.
      4. Peculiarities of asset recognition of custodian bank of special financial company, as well as transactions with bonds shall be established by the legislation of the Republic of Kazakhstan.
      Footnote. Article 13 as amended by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V(shall be enforced upon expiry of ten calendar days after its first official publication).

Article 14. Peculiarities of issue of bonds of special financial company upon securitization

      Footnote. The title as amended by the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

      1. Besides of requirements of the legislation of the Republic of Kazakhstan on security market, prospectus of issue of bonds (bonded program) of special financial company shall contain the following details:
      1) name and location of originator, custodian bank, manager of investment portfolio, special financial company and person, effecting collection of payments on assigned rights of demand;
      2) object of activity, right and obligation of originator in the transaction of securitization;
      3) characteristic of rights of demand, condition, procedure and terms of cash proceeds on rights of demands, entering into composition of allocated assets, and procedure of carrying out of control of their execution;
      4) procedure of investment of temporary free entries on allocated assets;
      5) expenses, related with payment for services on transaction of securitization, and conditions, according of which the special financial company shall have a right to deduct these expenditures from allocated assets;
      6) affiliation of transaction parties of securitization;
      7) availability of experience of application of securitization by the originator and persons, participating in transaction of securitization;
      8) amount, composition and prediction analysis of growth of allocated assets, ensuring transaction of securitization;
      9) on additional security;
      10) conditions and procedure of early repayment of issue of bonds;
      11) test of homogeneity of rights of demand;
      12) redemption priority of bonds of different issues, issued within this bonded program;
      13) Is excluded by the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).
      2. An integral part of prospectus of issue of bonds of special financial company shall be an audit report of originator for the last year, an agreement of assignment of right of demand on this transaction of securitization, concluded between originator and special financial company.
      3. Accounts, reflecting transaction of securitization and issue of bonds of special financial company shall be additionally represented for consideration and approval of reports on the results of placement and redemption of bonds of special financial company according to the procedure and form, which are established by the authorized body.
      4. Representative of bond holder of special financial company shall not be affiliated person of originator.
      Footnote. Article 14 as amended by the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 4. FINAL PROVISIONS

Article 15. Responsibility for violation of the legislation of the Republic of Kazakhstan on project financing and securitization

      1. Violation of the Legislation of the Republic of Kazakhstan on project financing and securitization shall entail responsibility in accordance with the Laws of the Republic of Kazakhstan.
      2. In the cases of detection of violations of requirements of the legislation of the Republic of Kazakhstan by the authorized body on issues, regulation of which is fall within its competence, an authorized body shall apply to the special financial company one of the following limited enforcement measures:
      1) give the binding instruction in written form on elimination of identified deficiencieswithin the established time limit;
      2) require letter of commitment;
      3) compose a written agreement with special financial company.
      3. Written instruction shall be instruction of special financial company on adoption of binding remedial measures, directed to the elimination of identified deficiencieswithin the established time limit;
      Appeal of written instruction of the authorized body in a court shall not suspend its execution.
      4. Letter of commitment of special financial company shall contain the fact of recognition of existing deficiencies and guarantee of administration of special financial company on their elimination in strictly specified period with specification of the list of planned measures.
      5. An agreement in writing shall be concluded between the special financial company and authorized body on necessity of immediateelimination of identified deficiencies and on approval of high priority measuresin this regard.
      6. Special financial company shall be obliged to inform an authorized body on execution of written instruction, letter of commitment or written consent within the time periods established therein.
      7. Procedure of application of limited enforcement measures shall be established by the regulatory legal acts of the authorized body.
      Footnote. Article 15 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V(shall be enforced upon expiry of ten calendar days after its first official publication).

Article 16. Procedure of enforcement of this Law

      This Law shall be enforced from the date of its official publication.

      The President
      of the Republic of Kazakhstan