Regulator confirms reliability of Freedom Broker

The authorized agency has confirmed that it has no problems with Freedom Broker / Shutterstock

The Agency for the Regulation and Development of the Financial Market (ARDFM) has confirmed the reliability and steadiness of Freedom Holding Corp. and its subsidiaries in Kazakhstan, including Freedom Broker and Freedom Bank, according to the agency’s website.

As the agency noted, the international holding of Freedom Holding Corp. is represented in Kazakhstan by its 100% subsidiary Freedom Finance (working under the Freedom Broker brand), which in turn owns Freedom Finance Bank, Freedom Finance Insurance and Freedom Finance Life. Freedom Finance has the status of a banking conglomerate and insurance holding.

As of July 1, Freedom Broker controlled assets of $689 million and owned equity capital of $289 million. The company’s capital adequacy ratio (K1) is 9.03 (the standard is not less than 1). The quick assets ratio for four different categories is 1.3 (standard not less than 1, 0.9, 0.8 and 0.5).

«This means that the broker meets all the prudential standards and is financially stable,» the ARDFM said in a statement.

Freedom Broker accounts for 41% of all assets on the market and is ranked first among all Kazakhstani brokers. The company also accounts for 16% of all transactions on the Kazakhstan Stock Exchange (KASE). As a result, the agency is implementing strict control over the broker’s activities.

Moreover, Freedom Broker meets all the regulator’s requirements in terms of accounting for client’s assets and keeping them safe. Moreover, the company separately keeps books for its own assets and those of its clients. The ARDFM also reported that Freedom Broker and Freedom Bank follow strict compliance and do not open accounts for those individuals and entities who have been targeted with sanctions. At the same time, all transborder transactions are subject to more rigorous examination necessary to avoid the situation when the bank can be used as a tool to make payments for sanctioned goods and dual-use materials.

If Freedom Broker and Freedom Bank come to know that one of their clients is on the sanction list, they would freeze his assets and cease any business relations with such a client.

In addition, the ARDFM noted that Freеdom Securities Trading Inc. (former FIN Brokerage Services Inc.) registered in Belize isn’t part of Freedom Holding Corp and its activities are regulated by the International Financial Services Commission of Belize, an authorized agency in this Central American country.

In the middle of August, Hindenburg Research, which specializes in short selling published a short report in which it accused Freedom Holding Corp. of breaching anti-Russian sanctions and misleading financial reports. In an interview with Kursiv, Timur Turlov, founder of the holding, denied any wrongdoing. He said that Freedom Holding Corp. meets the legal requirements in all countries it works, while the source for the Hindenburg Research report was the holding’s former employee.

Kursiv already wrote why actions by short sellers behind Hindenburg Research would likely cause a short squeeze and increase in the holding’s price share on NASDAQ. Since the moment of the report’s publication, Freedom Holding Corp. share price has broken a historic record on the stock exchange.