Non-significant investments: holdings below 10% of CET1 are deducted in full, holdings at or above 10% only above the threshold

BBR 4.29(4) applies when, after other regulatory adjustments, the total of the deductions under that rule is less than 10% of the Bank's CET1 capital; the Bank must then deduct the investments in full (4.29(4)(b)-(c)). BBR 4.29(5) applies when the total is 10% or more and deducts only the amount by which it exceeds 10% (the excess). With CET1 of 100, holdings of 9.9 are deducted in full (9.9), holdings of 10 lead to no deduction and holdings of 11 to a deduction of 1. A bank can therefore keep more CET1 by holding more. IBB 4.43 and 4.44 have the same structure. Carried through to the capital ratios: for a bank with CET1 of USD 50 million, other credit risk-weighted assets of USD 450 million, a market risk requirement of USD 4 million and an operational risk requirement of USD 7.5 million, holdings of USD 4.9 million are deducted in full and the bank falls below its capital requirement under 4.9 and the 8% Total Capital ratio (USD 45.1 million against 47.5 million); holdings of USD 5.0 million are not deducted and the bank meets them (USD 50 million against 48.7 million). Line 37 of Form 30 in the Manual for Preparation of Returns deducts only the amount above the 10% threshold.

Proposed correction

Please clarify how much is deducted below and at or above the 10% threshold, so that the deduction does not fall when holdings rise. For example: (a) deduct only the amount above 10% of CET1 and risk-weight the holdings below it, or (b) keep full deduction and apply it at every level.

Jurisdiction

Kazakhstan — AIFC

Act

AIFC Banking Business Prudential Rules (BBR), V6

Place

BBR 4.29(4) heading

Record

Discrepancy

Class

Text of the act

Where it arose

The text of the act

Arxo's conclusion

Confirmed

Official text

Unchanged at last check

Last checked

2026-10-24

Evidence

Reproduced by execution. Quotations are verbatim from the official material; translations are ours and marked.

Non-significant investments—where the Bank does not own more than 10% of issued common

the total of the deductions required to be made under this rule is less than 10% of the Bank’s CET 1 capital.

A Bank must deduct any investments in common shares, or other instruments that qualify as capital, of an entity concerned.

Non-significant investments—aggregate is 10% or more of Bank’s CET 1 capital

A Bank must deduct the amount by which the total of the deductions required to be made under Rule 4.29 (4) exceeds 10% of the Bank’s CET 1 Capital.

the total of the deductions required to be made under this rule is less than 10% of an Islamic Bank’s CET 1 Capital.

An Islamic Bank must deduct any investments in common shares, or other instruments that qualify as capital, of an entity concerned.

How to check it without Arxo's tools

1. Open AIFC Banking Prudential Rules_V6 (with amendments as of 13 April 2025, which commence on 13 October 2025) and find BBR 4.29(4) heading; BBR 4.29(4)(a)(iv); BBR 4.29(4)(b); BBR 4.29(5) heading; BBR 4.29(5)(b). Compare the text with the quotation above. A copy is kept in this register: 6384caa7b1938818-bbr_v6_13.10.2025_ma.pdf (SHA-256 6384caa7b19388180b780ec19044e1261cae3021c63c670f14ceb35285107022, copy of the official file).
2. Open AIFC Islamic Banking Business Prudential Rules and find IBB 4.43(1)(d); IBB 4.43(2). Compare the text with the quotation above. A copy is kept in this register: e8b3c15b1ff574fd-aifc-islamic-banking-business-prudential-rules.pdf (SHA-256 e8b3c15b1ff574fd59504ade7cc9e0488ed5fa6ecfdc7816e3dc603bf4caedeb, copy of the official file).
3. The finding holds if the quoted passages read as shown and the comparison gives the result stated at the top of this page. If it does not, write to us with the record ID.

How this finding was made

AI agents read the official texts, turned the provisions concerned into executable rules and ran the comparison; they also drafted this record. A person at Arxo checked the finding and approved the report before it was sent (2026-10-27).

Responsible institutions

• Astana Financial Services Authority (AFSA) — author of the AIFC Rules

Reported to

Responses

No response recorded.

Documents and reproduction

• AIFC Banking Prudential Rules_V6 (with amendments as of 13 April 2025, which commence on 13 October 2025)
• AIFC Islamic Banking Business Prudential Rules

History

1. 2026-10-24Confirmed by Arxo
2. 2026-10-27Entered in the register
3. 2026-10-27Reported to Astana Financial Services Authority (AFSA) (e-mail)

Cite this record

Arxo Law, Arxo Findings Register, ARXO-2026-0119, https://arxo.io/findings/ARXO-2026-0119/ (status as of 2026-10-24). Data: ARXO-2026-0119.json.