Significant and non-significant investments: the definition in 4.27, the heading of 4.29(4) and the conditions of 4.29(4)(a) and 4.29(6)(a) classify a holding of AT1 or T2 instruments differently

BBR 4.27 defines a significant investment as an investment of 10% or more in the common shares, or other instruments that qualify as capital, of the entity concerned. The heading of Rule 4.29(4), which is part of the Rules under section 24(1)(a) of the AIFC Regulations on AIFC Acts, describes non-significant investments as those "where the Bank does not own more than 10% of issued common equity of the entity". Rule 4.29(4) then applies where the Bank makes a non-significant investment and does not own more than 10% of the common shares, and Rule 4.29(6) where the Bank makes a significant investment and owns 10% or more of the common shares. A holding of 10% or more of an issue of AT1 or T2 instruments of another bank or insurer, with less than 10% of its common shares, is non-significant by the heading and significant by 4.27, and under the conditions of the two rules it is outside both of them. Take an unconsolidated issuer whose only instrument other than common shares is a T2 issue of USD 300 million, with no reciprocal holding and no pledge: for a bank with CET1 of USD 100 million, a holding of USD 30 million (10% of the issue) with no common shares is not deducted under the conditions of 4.29, while the heading and line 37 of Form 30 lead to a deduction of the excess of USD 20 million; a holding of USD 29.7 million (9.9%) leads to a deduction of USD 19.7 million. The heading also uses "not more than 10%" where 4.27 uses "10% or more".

Proposed correction

Please consider either testing significance in 4.27 by the holding of common shares only, as the heading of 4.29(4) and line 37 of Form 30 do, and aligning the 10% boundary, or replacing the common-share conditions in the heading and in 4.29(4)(a)(iii) and 4.29(6)(a)(iii) with a reference to a non-significant and a significant investment as defined, so that 4.29(6)(b) applies to such holdings (a full deduction, stricter than testing significance by common shares only).

Jurisdiction

Kazakhstan — AIFC

Act

AIFC Banking Business Prudential Rules (BBR), V6

Place

BBR 4.27, p.26

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

2026-10-25

Evidence

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

significant investment, by a Bank in an entity concerned, means an investment of 10% or more in the common shares, or other instruments that qualify as capital, of the entity concerned.

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

a Bank makes a non-significant investment in an entity concerned;

the Bank does not own more than 10% of the common shares of the entity concerned;

the Bank owns 10% or more of the common shares of the entity concerned.

A Bank must deduct the total amount of investments in the entity concerned (other than investments in common shares, or other instruments that qualify as CET 1 capital, of the entity).

a heading to a provision; and

A definition in an AIFC Act applies except so far as the contrary intention appears.

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 4.27, p.26; BBR 4.29(4) heading, p.28; BBR 4.29(4)(a)(i), p.28; BBR 4.29(4)(a)(iii), p.28; BBR 4.29(6)(a)(iii), p.29; BBR 4.29(6)(b), p.29. 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 Regulations on AIFC Acts, as amended on 11 January 2019 and find AIFC Regulations on AIFC Acts s.24(1)(a); AIFC Regulations on AIFC Acts s.28(3). Compare the text with the quotation above. A copy is kept in this register: 4f25a8539468e034-regulations-on-aifc-acts-2019.pdf (SHA-256 4f25a8539468e034bf728e88a7af90f9c2bcb8c1bc72c22dd126f7edab2486bc, 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 Regulations on AIFC Acts, as amended on 11 January 2019

Related records

• ARXO-2026-0119 — Non-significant investments: holdings below 10% of CET1 are deducted in full, holdings at or above 10% only above the threshold
• ARXO-2026-0148 — Islamic banks — significant and non-significant investments: an investment that is significant under 4.29 through Additional Tier 1 or Tier 2 instruments, with less than 10% of the common shares, is not covered by 4.43 or 4.45

History

1. 2026-10-25Confirmed 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-2026-0144, https://arxo.io/findings/ARXO-2026-0144/ (status as of 2026-10-25). Data: ARXO-2026-0144.json.