Allocation of the 10% excess across tiers uses the bank's OWN capital as numerator and holdings as denominator; shares do not sum to 1

BBR 4.29(5)(c) allocates the excess over 10% to each tier of capital by the formula Excess x A/B, where A is "the amount of CET 1 capital, additional tier 1 capital or tier 2 capital of the Bank" and B is "the total capital holdings of the Bank". Read literally, A is the bank's own capital in a tier, while B is its holdings in other entities, so the three shares do not add up to 1. For example, with own CET1, AT1 and T2 of 100, 10 and 20, holdings of 12 (CET1) and 3 (T2) and an excess of 5, the literal formula deducts 43.3 in total instead of 5. Under 4.29(1)(b) deductions are made from the tier for which the held capital would qualify, which points to A being the bank's holdings in that tier. "Capital holdings" is not defined. IBB 4.44(3) has the same wording. With holdings of USD 15 million, all in CET1 instruments, and own CET1 of USD 100 million, the literal formula deducts USD 33.3 million instead of 5 million; with holdings of USD 150 million it deducts USD 93.3 million instead of 140 million. For a bank with other credit risk-weighted assets of USD 900 million, a market risk requirement of USD 10 million and an operational risk requirement of USD 15 million (capital requirement USD 99.4 million), Total Capital after the allocation is USD 86.7 million under the literal formula and USD 125 million if A is the holdings of each tier.

Proposed correction

Please define A as the Bank's holdings of CET1, AT1 or T2 instruments of the entities concerned (as the case may be) and B as the total of those holdings, in BBR 4.29(5)(c) and IBB 4.44(3).

Jurisdiction

Kazakhstan — AIFC

Act

AIFC Banking Business Prudential Rules (BBR), V6

Place

BBR 4.29(5)(c), p.29

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.

A is the amount of CET 1 capital, additional tier 1 capital or tier 2 capital of the Bank, as the case may be;

B is the total capital holdings of the Bank.

A is the amount of CET 1 Capital, additional Tier 1 Capital or Tier 2 Capital of the Islamic bank, as the case requires.

Deductions must be made from the same Tier for which the capital would qualify if it were issued by the Bank itself

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(5)(c), p.29; BBR 4.29(5)(c); BBR 4.29(1)(b), p.27. 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 4.44(3). 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-2026-0124, https://arxo.io/findings/ARXO-2026-0124/ (status as of 2026-10-24). Data: ARXO-2026-0124.json.