As of June 01, 2023, over 1,870,000 accounts were registered in the Central Securities Depository's nominal holding system, of which 684,000 accounts were segregated investor subaccounts opened with the Central Securities Depository, the remaining 1,186,000 accounts were brokerage accounts of investors, whose assets are subject to recording through aggregated omnibus accounts. A spike in the number of brokerage accounts recorded through omnibus accounts is explained by the fact that the Central Securities Depository introduced a new service for its participants for the batch transfer of securities recorded in segregated accounts to an aggregated omnibus account.
With batch transfer, participants were able to transfer financial instruments from segregated accounts opened in the name of each individual investor to an aggregated omnibus account by submitting a single order in XML format. The Central Securities Depository has fully automated the procedure for sending and processing the XML file from the participant to the Central Securities Depository and from the Central Securities Depository to KASE.
It is expected that the batch securities transfer services will be in demand not only during the transition to omnibus accounts, but also as part of other volume transfers of financial instruments between accounts, for example, during delisting of securities from the official list of KASE.
The attractiveness of omnibus accounts among Kazakh participants is due to the fact that the cost of maintaining omnibus accounts for brokers and banks is lower than the cost of maintaining a separate subaccount for each client at the Central Securities Depository. All transactions within the omnibus account are displayed under the name of the broker, and no details of investors making transactions through this account are disclosed. All this simplifies the procedure of transaction registration and securities record, as well as increases the speed of transactions and reduces the cost of securities record.
"Omnibus account is an international practice, and we adapted it for the local market, taking into account the requirements of the regulator to preserve the transparency of the ownership structure of securities owners. This system is designed in such a way that the regulator can always get access through the Central Securities Depository and state databases to data on omnibus accounts and information on securities holders, while the Central Securities Depository itself has limited access to this information", - said the Chairman of the Central Securities Depository’s Management Board, Adil Mukhamejanov.
The first omnibus accounts began trading in January 2022, and in a year and a half, the number of brokerage accounts accounted for in omnibus accounts has surpassed one million. Most participants used the opportunity to open and maintain records through omnibus accounts and are in the process of reconfiguring internal information systems for omnibus accounts. Prior to the full transition from segregated subaccounts, accounts of some participants’ clients are partially duplicated in both the aggregate and segregated accounts, so we expect the number of segregated subaccounts to decrease in the next few months.
Investor Portrait
The Kazakhstani investor is portrayed on the basis of data on investors, to whom subaccounts are opened in the Central Securities Depository's recordkeeping system. Retail investors account for 681,000 of 684,000 subaccounts.
More than 99% of security holders in the recordkeeping system of the Central Securities Depository are Kazakhstani investors. The share of non-residents is only 0.7% of the total number of retail investors.
The portrait of Kazakhstani investor remains young. As of June 1, 2023, the group of retail investors aged 25 to 34 accounted for 31% of the total number of retail investors, and 18 to 24 - 18.2%, but the figure for the age group under 18 is insignificant for several months, but is only 0.04% compared to 0.06% at the beginning of this year.
The most numerous group is still in the age range of 35 to 54 years - 36.6%. The share of investors older than 55 years old maintains a downward trend, amounting to 14.2%. This group is back to November 2022 figures. Let us remind you that it was systematically reduced throughout the year 2022.
Regarding the gender breakdown, we note that the growth trend of female investors has continued through 2022-2023 and currently female retail investors account for 49.8% and male investors for 50.2%.
Regionally, as before, Almaty (19.9%) and Astana (11.3%) retain their leading positions. Turkestan region is in the third place (9.4%). The smallest number of security holders is still in the North-Kazakhstan region (1.7%).