Santiago Principles Self-Assessment

JSC National Investment Corporation of the National Bank of Kazakhstan

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  • Pillar 1: Legal
  • Pillar 2: Institutional
  • Pillar 3: Investment
Principle 1

1. The legal framework for the SWF should be sound and support its effective operation and the achievement of its stated objective(s).

1.1. The legal framework for the SWF should ensure legal soundness of the SWF and its transactions.

1.2. The key features of the SWF’s legal basis and structure, as well as the legal relationship between the SWF and other state bodies, should be publicly disclosed.

The legal status of the Company is written in the Charter and states the following:

  1. The Company is a legal entity under the legislation of Kazakhstan and the Charter;
  2. The Company is a profit organisation;
  3. The Company has a separate balance sheet, bank accounts and a stamp with the full corporate name in the state and Russian languages;
  4. The period of activity of the Company is not limited.

The Company adheres to the regulations and the standards laid out in the internal documentation. These documents including, but not limited to the Charter, the Investment Strategy on the management of alternative instruments portfolio of foreign exchange reserves (hereinafter - The Investment Strategy), the Development Strategy provide the legal basis for the Company to implement its activity to full extent.

According to the rights and liabilities are written in the Charter,  the Company:

  • keeps accounting, taxation and statistical records;
  • prepares and submits financial reports as well as other reports covering all of the activities of the Company to the Shareholder and the authorised governmental bodies within the specified timeframe.

The Company is responsible for the completeness and adequacy of information submitted to the Shareholder.

The legal documentation of the Company (such as the Certificate of State Registration, the Charter, the License for implementing the activities on the securities market, the Organisational structure) are all publicly disclosed and available on the Company’s website at

In relation to any undertaken activity, the Company acts in accordance with the legislation of Kazakhstan.

Principle 6

6. The governance framework for the SWF should be sound and establish a clear and effective division of roles and responsibilities in order to facilitate accountability and operational independence in the management of the SWF to pursue its objectives.

The Company maintains the clear and effective division of roles and responsibilities of each member of the Management Board which is regulated by the Order on the distribution of duties among the members.

The Company believes in facilitating the high degree of accountability and operational independence as the part of its management process.

Principle 18

18. The SWF’s investment policy should be clear and consistent with its defined objectives, risk tolerance, and investment strategy, as set by the owner or the governing body(ies), and be based on sound portfolio management principles.

18.1. The investment policy should guide the SWF’s financial risk exposures and the possible use of leverage.

18.2. The investment policy should address the extent to which internal and/or external investment managers are used, the range of their activities and authority, and the process by which they are selected and their performance monitored.

18.3. A description of the investment policy of the SWF should be publicly disclosed.

The Company’s primary goal is to improve asset management efficiency as well as to increase assets yield in the long-term by maximising risk–adjusted returns through assets diversification in a manner consistent with the Investment Strategy.

To achieve its goal, the Company invests in traditional and alternative assets in the international financial markets with the investment horizon of 10-20 years, and other types of activities involving trust asset management.

The Company realises to a full extent the risks it is exposed to in the investment process. The risk management procedures are clearly identified in the Investment Strategy. Specifically, to manage risk, the Company introduces the limits, with an aim to regulate the level of risks. According to the Investment Strategy, the limits are imposed on:

  • Types of financial instruments
  • Asset allocation
  • Geographic allocation
  • Currency
  • Value at risk
  • Strategies
  • Investment structure

In terms of the leverage level, it is important to note, that the Company assigns its level to each asset class and manager individually.

The Company actively implements risk management by monitoring possible risks, including credit risk, market risk, liquidity risk and operational risk.

The current allocation and the asset classes the Company invests in are described in the Investment strategy.

The Company conducts a tender process in order to select the alternative investment and active equity managers. The manager selection process is described below:

  • the Company publishes the tender announcement on its website, Bloomberg and through the distribution of formal notifications to potential managers from the Company’s contacts list;
  • the potential managers, who fit the minimum criteria described by the type of mandate,  compete in the tender by providing the information defined in the request for proposal (hereinafter - RFP);
  • the Company analyses the proposals based on the predefined evaluation criteria and forms the long list of potential managers;
  • investment due diligence and operational due diligence are held on the long list of potential managers prior to recommending the list to the Investment Committee. The Investment Committee selects the most competitive managers and defines the short list;
  • the short list is presented to the Board of Directors of the Company who defines the final list of managers. Finally, the managers are approved by the Executive Board of NBK.

The agreements are signed with each of the selected managers, where all terms and conditions, as well as the responsibilities (including reporting procedures) of the manager, are identified.

The Company monitors the performance on a constant basis.

Disclosure of the Investment strategy is subject to the NBK’s decision and can be provided upon request (given the NBK’s agreement to do so).