Regulation on Corporate Governance in Commercial Banks of the Kyrgyz Republic

		Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 17, 2017 No. 19/12

REGULATION on corporate governance in commercial banks of the Kyrgyz Republic

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 20, 2018 No. 2018-P-12/24-1, September 15, 2021 No. 2021-P-12/51-1-(NPA) )

Chapter 1. General Provisions

1. The Regulation "On Corporate Governance in Commercial Banks of the Kyrgyz Republic" (hereinafter - the Regulation) applies to all commercial banks (hereinafter - banks), as well as to the State Development Bank of the Kyrgyz Republic, taking into account the features provided for by the Law of the Kyrgyz Republic "On the State Development Bank of the Kyrgyz Republic".

Effective corporate governance in banks is one of the most important conditions for ensuring the stable development of banks and the banking system as a whole.

2. Corporate governance is understood as a system of relations between shareholders, the Board of Directors, and the Management Board of the bank regarding:

• defining the strategic goals of the bank's activities, the ways to achieve them, and control over the achievement of these goals;

• creating incentives for labor activity that ensure the performance by the management bodies and employees of the bank of all actions necessary to achieve the strategic goals of the bank's activities;

• achieving a balance of interests of the bank's shareholders, its creditors, including depositors, and the stable development of the bank;

• ensuring compliance with the legislation of the Kyrgyz Republic, as well as the internal documents of the bank.

3. The main components of effective corporate governance in banks are:

• distribution of powers, competence issues, and accountability among the bank's management bodies, organization of effective activities of the Board of Directors and the Management Board of the bank;

• definition and approval of the bank's development strategy and control over its implementation;

• prevention of conflict of interest;

• definition and compliance with standards of professional ethics;

• ensuring transparency of the bank's activities.

The methodological basis for effective corporate governance in banks and banking groups is the recommendations of the Basel Committee on Banking Supervision, which are posted on the website of the Bank for International Settlements (Switzerland) www.bis.org, as well as the OECD principles of corporate governance, posted on the website www.oecd.org.

4. Internal documents aimed at implementing effective corporate governance and not contradicting this Regulation may be developed in the bank.

Chapter 2. General Meeting of Shareholders

5. The highest management body of the bank is the General Meeting of Shareholders.

6. Issues assigned to the exclusive competence of the General Meeting of Shareholders of the bank are defined by the laws of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic, Banks and Banking Activity" and "On Joint Stock Companies".

7. Issues assigned to the exclusive competence of the General Meeting of Shareholders cannot be transferred to other management bodies.

8. In accordance with the Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic, Banks and Banking Activity" (hereinafter - the Law), shareholders of the bank must not take actions that harm the interests of the bank's clients.

9. The powers of the General Meeting of Shareholders of the bank during the period of the Temporary Administration are exercised in accordance with the normative legal acts of the National Bank of the Kyrgyz Republic (hereinafter - the National Bank).

Chapter 3. Board of Directors of the Bank

10. The Board of Directors of the bank is a management body of the bank that carries out general management of the bank during the periods between General Meetings of Shareholders, in accordance with the internal regulation on the Board of Directors of the bank.

11. Issues assigned to the exclusive competence and responsibility of the Board of Directors are defined by the Law and include the definition of the bank's strategies and policies.

12. In order to ensure effective corporate governance, the Board of Directors is required to:

• establish clear levels of authority, responsibility, and accountability within the bank's organizational structure;

• form an effective internal control system and ensure its proper functioning, adequacy to the size, complexity of activities, structure, and risk profile of the bank. In this regard, the risk profile is a combination of the bank's risk indicators based on collected, analyzed, and systematized information that characterizes the bank's exposure to risks in activity areas taking into account established priorities;

• ensure a proper risk management system corresponding to the requirements established by the National Bank;

• take measures to bring information about the bank's strategic goals to all levels of the organizational structure of the bank;

• periodically (no less than once a year) assess the bank's development strategy, the bank's business plans, and policies for all main types of activities in order to determine their adequacy to current activities, the bank's financial condition, and external economic conditions;

• periodically (no less than once a quarter) assess current banking activities and financial results in terms of achieving the bank's strategic goals and forecast indicators of the bank's business plans;

• ensure the bank's activities and its management bodies comply with the legislation of the Kyrgyz Republic, normative legal acts, and requirements of the National Bank;

• consider the results and take measures based on the outcomes of external, internal audits, and banking supervision authorities;

• to make objective and competent decisions, possess sufficient and reliable information and ensure that recommendations and proposals from the Management Board, other management bodies, and officials of the bank are justified and meet the interests of the bank;

• periodically assess their own activities, identifying weaknesses and taking appropriate corrective actions;

• ensure that the rules and procedures for paying remuneration correspond to the bank's corporate culture, control environment, as well as the long-term tasks and strategy of the bank.

13. The activities of internal and external auditors, corresponding to the legislation of the Kyrgyz Republic, normative legal acts of the National Bank, and international audit standards, are necessary to achieve effective corporate governance in the bank. Audit functions may be strengthened by:

• recognition at all levels of the organizational structure of the necessity and importance of auditors' work for the stability of the financial condition and achievement of the bank's strategic goals;

• taking measures strengthening the independence and adequacy of internal audit;

• increased attention from the Board of Directors to the reports and recommendations of external and internal auditors for the purpose of independent assessment of the bank's activities;

• taking timely corrective measures regarding problems identified by auditors.

14. When choosing an external auditor to present to the General Meeting of Shareholders, the Board of Directors should take into account the balance between the costs of conducting the audit and the need to ensure proper quality of external audit.

15. To strengthen their control functions, it is advisable for the Board of Directors to hold regular discussions with the external auditor (no less than once a year) and the internal auditor (no less than once a quarter).

16. The Board of Directors has the right to engage auditors to check the activities of structural subdivisions, committees created, and officials of the bank.

17. The Board of Directors must create the following committees:

1. Risk Management Committee, ensuring control over the Management Board's activities in risk management issues that the bank assumes;

2. Audit Committee;

3. Appointments and Remuneration Committee.

The bank may also create a New Products Committee, a Compliance Control Committee, and other committees.

The activities of the Board of Directors' committees must comply with the requirements of the National Bank and the bank's internal documents.

18. The bank must create other committees to strengthen corporate governance in the bank, in particular:

• Credit Committee, making decisions on all issues related to the issuance of loans, guarantees, obligations, sureties, other assets and liabilities that are essentially credit operations and carry the risk of credit loss. The activities of the Credit Committee are regulated in accordance with the legislation of the Kyrgyz Republic and the internal regulation on the Committee, which is approved by the Board of Directors.

• Asset and Liability Management Committee of the bank, carrying out control over the overall structure of the bank's balance sheet, monitoring the structure of assets and liabilities, and ensuring compliance with the asset and liability management policy established by the Board of Directors. The activities of the Asset and Liability Management Committee are regulated in accordance with the legislation of the Kyrgyz Republic and the internal regulation on the Committee, which is approved by the Board of Directors.

All committees in the bank are headed by the chairmen of the respective committees.

19. In the internal documents of the bank regulating the activities of all committees created in the bank, the following must be defined at a minimum:

• the purpose of creation and activities of the committee;

• the powers of the committee;

• the procedure for appointing the chairman of the committee;

• the procedure for holding meetings, which may be in person (with the presence of committee members) or in absentia (without the presence of committee members, for example, via video, audio conference, etc.), including the voting procedure of committee members;

• the reporting procedure;

• the responsibility of each committee member for decisions made and signed by them.

Also, in these documents, the following requirements must be established for each committee member participating in the meeting and making decisions:

• to be aware of the essence of the issue under consideration;

• to understand the impact of their decisions on the bank's activities;

• to assess the possibility of arising risks and consequences of their decisions.

The opinion of a committee member who has remarks and proposals on the issue under consideration and disagrees with the adopted decision must be expressed during voting and reflected in the minutes. The minutes must be signed by all committee members present at the meeting and the committee secretary. Committee members who did not participate in the meeting must be familiarized with the minutes and adopted decisions under signature.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 20, 2018 No. 2018-P-12/24-1 )

20. A high level of responsibility and a wide range of powers of the Board of Directors implies that members of the Board of Directors possess sufficient knowledge of the main types of the bank's activities and the ability to express an opinion independent of the opinion of management bodies and officials of the bank. When making decisions, each member of the Board of Directors must be objective and guided by the interests of the bank, not personal interests or the interests of individual shareholders, officials of the bank, or third parties. The opinion of a member of the Board of Directors who has remarks and proposals on the issue under consideration and disagrees with the adopted decision must be expressed during voting and reflected in the minutes. The minutes and the stenographic report (detailed written text of participants' speeches) of the Board of Directors meeting must be signed by the presiding officer and the Corporate Secretary, after coordination (visoring) with the members of the Board of Directors present at the meeting. Members of the Board of Directors who did not participate in the meeting must be familiarized with the minutes and adopted decisions under signature.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 15, 2021 No. 2021-P-12/51-1-(NPA) )

21. Members of the Board of Directors must meet the minimum qualification requirements established by the National Bank.

22. In order to ensure competence, objectivity, and independence, independent members of the Board of Directors possessing recognized reputation and professional experience in economic, financial, monetary, and legal issues must be elected to the Board of Directors. At least one member of the Board of Directors of the bank must be a citizen of the Kyrgyz Republic who knows the state and/or official language.

At least one-third of the composition of the Board of Directors of the bank must consist of independent members of the Board of Directors.

23. The Board of Directors of the bank must take all necessary measures to identify and prevent conflict of interest at all levels of the bank's activities.

24. The Board of Directors of the bank must act in good faith and reasonably in the best interests of the bank, which implies compliance with the following fiduciary duties:

1. action within their powers in compliance with the requirements of banking legislation of the Kyrgyz Republic and the bank's charter;

2. use of powers provided to them for the purpose of performing tasks and functions for which they were elected;

3. make balanced decisions based on their own qualifications and experience after taking all exhaustive measures/all possible efforts to obtain necessary and available information within a reasonable time;

4. comply with requirements to prevent conflict of interest;

5. comply with the principle of equality regarding shareholders, not favoring the interests of one shareholder over others;

6. have an impeccable business reputation in accordance with the legislation of the Kyrgyz Republic;

7. organize an effective control system in the bank to prevent the bank from making transactions and conducting operations (transactions) of clients that do not have an obvious economic sense, legal purpose, and/or which may subsequently harm the interests of the bank.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 15, 2021 No. 2021-P-12/51-1-(NPA) )

25. The Board of Directors has the right to engage advisors (specialists, consultants, experts, etc.) to prepare analytical, reference, informational materials and recommendations on issues within their competence according to their assigned duties.

The activities of advisors must be carried out within the framework of job descriptions/service agreements.

Advisors are not officials of the bank and cannot be involved in the implementation of the bank's operational activities. The conclusions of advisors are of a recommendatory nature; the specified bodies bear responsibility for all decisions made by the Board of Directors and the Management Board of the bank.

Chapter 4. Management Board of the Bank

26. The Management Board carries out management of the current activities of the bank based on the legislation of the Kyrgyz Republic, the internal regulation on the Management Board, and is accountable to the Board of Directors.

27. Issues assigned to the competence and responsibility of the Management Board are defined by the Law and include the implementation of strategies and policies defined by the Board of Directors.

28. In order to ensure effective corporate governance, the Management Board is required to:

• ensure a clear distribution of responsibility, authority, and accountability among structural subdivisions, officials, and employees of the bank;

• establish effective systems for monitoring compliance with policies approved by the Board of Directors, procedures, and job descriptions at all executive levels of the organizational structure and periodically assess the adequacy of these systems;

• establish reliable information systems that ensure proper preparation and timely presentation of information (financial, analysis of events and market conditions, etc.) necessary for making management decisions;

• provide the Board of Directors with timely, substantive, and reliable reports on current activities, containing actual results of financial and operational activities, allowing for the assessment of the fulfillment of forecast indicators of the business plan and the bank's development strategy;

• provide (no less than once a year) the Board of Directors with a detailed assessment of the adequacy of the bank's internal control system, including on issues of countering the legalization (laundering) of criminal proceeds and financing of terrorist or extremist activities, as well as provide recommendations for improving the internal control system;

• periodically provide the Board of Directors with reports and recommendations on risk management, which will ensure the effectiveness and adequacy of the continuous risk management process;

• immediately inform the Board of Directors about any deterioration in the bank's economic situation or the threat of such a situation arising;

• inform the Board of Directors about all identified violations of legislation, normative acts of the National Bank, and internal policies approved by the Board of Directors.

29. Members of the Management Board must meet the minimum qualification requirements established by the National Bank.

30. In carrying out their activities, members of the Management Board should be objective and guided primarily by the interests of the bank, not personal interests or the interests of individual shareholders, officials of the bank, or third parties, making every effort to ensure healthy and safe banking practices. The opinion of a member of the Management Board who has remarks and proposals on the issue under consideration and disagrees with the adopted decision must be expressed during voting and reflected in the minutes. The minutes and the stenographic report (detailed written text of participants' speeches) of the Management Board meeting must be signed by the presiding officer and the secretary of the Management Board of the bank, after coordination (visoring) with the members of the Management Board of the bank present at the meeting. Members of the Management Board who did not participate in the meeting must be familiarized with the minutes and adopted decisions under signature.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 15, 2021 No. 2021-P-12/51-1-(NPA) )

31. In managerial practice, the following cases should not be allowed:

• members of the Management Board participating in decision-making who do not have the corresponding powers according to the functional distribution of duties, except in cases where the decision is made collegially;

• members of the Management Board who do not have the corresponding qualifications, necessary skills, and knowledge on issues within their competence;

• members of the Management Board who are unable to control the work of key employees of the bank, the results of whose activities are of great importance to the bank (in terms of generated income, implementation of new banking products, etc.).

32. Members of the Management Board of the bank are obliged to act in good faith and reasonably in the best interests of the bank, which implies compliance with the following fiduciary duties:

• perform duties within their powers in compliance with the requirements of banking legislation of the Kyrgyz Republic, the bank's charter, decisions (adopted by the General Meeting of Shareholders and the Board of Directors of the bank), including the implementation of strategies and policies;

• use of powers provided to them for the purpose of performing tasks and functions for which they were appointed for the term established by Law;

• make balanced decisions based on their own qualifications and experience after taking all exhaustive measures/all possible efforts to obtain necessary and available information within a reasonable time;

• comply with requirements to prevent conflict of interest;

• comply with the principle of equality regarding shareholders, the Board of Directors, and officials of the bank;

• have an impeccable business reputation in accordance with the legislation of the Kyrgyz Republic;

• take exhaustive measures to prevent the bank from making transactions and conducting operations (transactions) of clients that do not have an obvious economic sense, legal purpose, and/or which may subsequently harm the interests of the bank.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 15, 2021 No. 2021-P-12/51-1-(NPA) )

Chapter 5. Basic Requirements for the Appointments and Remuneration Committee

33. The Appointments and Remuneration Committee is created in the bank regardless of the types of activities carried out to increase the efficiency of the work of the Board of Directors of the bank and optimize the decisions made by it.

The activities of the Committee must be aimed at strengthening control over the appointments and remuneration of members of the Management Board, heads and employees of internal audit, risk management, and compliance control services, as well as key employees defined by the bank.

34. The Appointments and Remuneration Committee determines the level of remuneration paid by the bank, which must be sufficient to attract, motivate, and retain persons possessing the competence and qualifications necessary for the bank, while the level of remuneration paid by the bank must not lead to unprofitable activities.

35. The activities of the Committee are regulated by the requirements of the legislation of the Kyrgyz Republic and the internal regulation on the Committee, which is approved by the Board of Directors of the bank.

36. The Committee must consist of no fewer than three members of the Board of Directors appointed by the General Meeting of Shareholders of the bank, one of whom must be independent.

37. The Committee provides recommendations to the Board of Directors on candidates for inclusion in the composition of the Management Board, heads and employees of internal audit, risk management, and compliance control services, as well as key employees defined by the bank, taking into account the requirements established by the National Bank.

38. The Committee considers candidates for the position of Corporate Secretary, assesses the compliance of candidates with established requirements, and provides its recommendations to the Board of Directors.

39. The payment of remuneration to members of the Board of Directors, the Management Board, heads of internal audit, risk management, compliance control services, as well as key employees defined by the bank, must be carried out in accordance with the internal normative act on remuneration adopted in the bank.

The internal normative act on remuneration must be developed by the Remuneration Committee and approved by the Board of Directors of the bank. The Board of Directors, with the support of the Remuneration Committee, must ensure control over the implementation and realization in the bank of the internal normative act on remuneration, and if necessary, review and make corrections.

40. The level of remuneration provided by the bank to members of the Board of Directors, the Management Board, heads of internal audit, risk management, compliance control services, and key employees defined by the bank must create sufficient motivation for their effective work, allowing the bank to attract and retain competent and qualified specialists.

The amount of additional remuneration to members of the Board of Directors must be established by the decision of the General Meeting of Shareholders taking into account the results of the bank's work, the results of the financial year, and the effective participation of a member of the Board of Directors in the activities of the Board of Directors.

41. The remuneration system must correspond to the business strategy, risk management strategy, goals, values, and long-term interests of the bank, and must also provide for measures to prevent conflicts of interest. Incentive programs should promote the implementation of the adopted risk management culture, within which decision-making practices correspond to established criteria and encourage employees to act in the interests of the bank (taking into account the interests of clients), and not only in their personal interests or in the interests of their subdivision. In particular, bonuses (bonuses) provided for by the incentive program should not contribute to employees taking excessive risks.

42. The amount of remuneration should depend directly on the ratio of risk to result. Methods of paying remuneration in advance of future income, the term and probability of receipt of which are uncertain, must be carefully weighed based on accepted qualitative and quantitative indicators. The remuneration system must provide for the possibility of changing the size of paid bonuses (bonuses) taking into account all risks, including violations of risk appetite limits, internal procedures, or regulatory requirements.

43. The internal regulatory act on remuneration must include the following:

• the procedure and period for payment of bonuses (bonuses);

• a system of criteria for payment of bonuses (bonuses), which must take into account the results of risk management in perspective for the purpose of long-term motivation;

• the size of bonuses (bonuses);

• if necessary, conditions for deferring payment of a significant portion of bonuses (bonuses) until the moment of receiving the result from taking a specific risk, taking into account risk reduction measures ("unreliability/loss");

• conditions for reducing or canceling bonuses (bonuses), based on received results or taking measures before their payment;

• conditions for compliance and execution of work plans/approved bank budget;

• bank profitability.

Chapter 6. Basic Requirements for the New Products Committee

44. A New Products Committee may be established in a bank to make decisions on the necessity of developing new banking products, introducing new products to the banking services market, as well as to control the process of the bank entering the market for new products developed by the bank in accordance with the requirements of antimonopoly regulation legislation.

45. The Committee is authorized to make decisions regarding new banking products to ensure an effective, targeted, and controlled process of initial assessment, subsequent development, testing, and implementation of banking products or services within existing resource constraints.

46. The Committee may determine the degree of involvement of certain subdivisions of the bank in the process of developing new banking products.

47. In the development and implementation of new banking products, the Committee must conduct an assessment of risks for new banking products and ways to reduce (minimize) them.

48. The activities of the Committee are regulated by the legislation of the Kyrgyz Republic and the Regulation "On the Committee", which is approved by the Board of Directors of the bank.

49. The Committee may consist of members of the Board of Directors and/or members of the Management Board of the bank.

50. The Committee, when making decisions on the development and implementation of new banking products, must comply within its powers with the requirements of the legislation of the Kyrgyz Republic and regulatory acts.

Chapter 7. Corporate Secretary of the Bank

51. The Corporate Secretary of the bank ensures and organizes the work (meetings and document management) of the General Meeting of Shareholders and the Board of Directors of the bank.

52. The Corporate Secretary is an official of the bank, appointed and dismissed from office by decision of the Board of Directors of the bank.

53. The Corporate Secretary carries out his activities in accordance with the Law, regulatory legal acts of the National Bank, the charter of the bank and internal regulatory acts of the bank, as well as decisions of the General Meeting of Shareholders and the Board of Directors of the bank.

54. Combining the independent position of the corporate secretary of the bank with the performance of other duties in the bank is allowed only with the consent of the Board of Directors of the bank.

55. The functional duties of the corporate secretary are developed by the bank independently in accordance with the legislation of the Kyrgyz Republic and internal regulatory acts of the bank.

56. The Corporate Secretary of the bank is obliged to act in good faith and reasonably in the best interests of the bank, which implies compliance with the following fiduciary duties:

1. perform his powers in compliance with the requirements of banking legislation of the Kyrgyz Republic, the charter of the bank and internal regulatory acts of the bank;

2. use the powers provided to him;

3. observe the principle of equality in relation to shareholders and members of the board of directors;

4. comply with the requirements of impeccable business reputation in accordance with the legislation of the Kyrgyz Republic.

57. The Corporate Secretary is obliged to keep a stenographic protocol (detailed written text of participants' speeches) of the meetings of the Board of Directors of the bank and to prepare protocols based on the results, including voting by written survey and using communication means.

The Corporate Secretary is obliged to familiarize all members of the Board of Directors with the signed protocol, including by using communication means.

Chapter 8. Professional Ethics and Prevention of Conflicts of Interest

58. An important factor in achieving the strategic goals of the bank is the activity of the Board of Directors and Management Board aimed at establishing standards of professional ethics, which define the importance of the following aspects of corporate governance:

• ensuring an effective internal control system, including on issues of countering the legalization (laundering) of criminal proceeds and financing terrorist or extremist activities, at all levels of the organizational structure of the bank;

• conducting healthy and safe banking practices;

• protecting the interests of the bank from improper or illegal actions of shareholders, bank officials, and other persons who have the ability to influence the activities of the bank;

• compliance with the legislation of the Kyrgyz Republic, regulatory legal acts of the National Bank and internal documents of the bank;

• prevention of conflicts of interest and identification of situations and areas of activity where conflicts of interest may arise;

• establishment of remuneration, rewards and incentives for employees (including the Board of Directors and Management Board), taking into account not only the results of the bank's activities, but also compliance with strategic goals and adherence to the bank's standards of professional ethics;

• compliance with safety and reliability requirements of the bank when lending to employees and officials of the bank;

• the presence of mechanisms providing employees with the opportunity to express concern about illegal, unethical or questionable actions of management and ensuring protection from possible negative reactions from management.

59. Standards of professional ethics, in order to ensure their positive influence on the level of corporate governance of the bank, must be brought to all employees and observed at all levels of the organizational structure of the bank, including the Board of Directors and Management Board.

60. The bank must develop mechanisms ensuring compliance with legislation and regulatory legal acts of the National Bank on preventing conflicts of interest and regulating transactions with affiliated and related persons of the bank, with members of the Management Board, Board of Directors, other officials, significant participants, as well as with any other natural persons associated with the specified persons by common interests.

For the purpose of identification and prevention of conflict of interest, the bank must have at least the following:

• develop procedures for informing the Board of Directors and Management Board of the bank about potential threats in the activities of the bank associated with conflict of interest;

• bank officials and employees before appointment (election) to office are obliged to provide the bank with a list of close relatives;

• in the event of a conflict of interest, a bank official or employee is obliged to immediately notify the Management Board and/or the Board of Directors of the bank;

• the bank must maintain a database of conflicts of interest that have occurred;

• untimely disclosure of a conflict of interest entails liability in accordance with the banking legislation of the Kyrgyz Republic.

61. In the field of personnel policy, corporate governance implies the presence in the bank of a Committee on Appointments and Remuneration, as well as the presence and compliance with internal documents that must ensure compliance with internal documents concerning:

• hiring and dismissal of employees (including bank management);

• personnel transfers and career growth;

• remuneration, rewards and incentives, provision of social payments and benefits, including the Board of Directors and Management Board of the bank;

• training of employees (including the Board of Directors and Management Board);

• a system of measures to retain qualified and competent personnel (including management);

• application of measures for inadequate performance by employees of the bank (including the Board of Directors and Management Board) of their duties, for violation of professional ethics standards adopted by the bank.

Chapter 9. Transparency of Bank Management

62. Transparency of bank management allows shareholders, depositors, and other creditors of the bank to monitor the activities of management bodies, as well as supports the reputation of the bank as an entity carrying out effective corporate governance. This will contribute to the attraction of new clients, investors, and business partners.

63. In addition to the requirements established by the legislation of the Kyrgyz Republic on disclosure of information about the activities of the bank, effective corporate governance provides for the disclosure of information, which also includes:

• the structure of the bank's management bodies (composition, qualifications and experience, powers, duties, supervised areas, work regulations and membership in committees, including information on the number of committee meetings held, etc.);

• the ownership structure of the bank (significant shareholders of the bank, the share of foreign investors in the bank's share capital, voting rights, etc.);

• the organizational structure of the bank and, if available, the structure of the banking group;

• types, terms and volumes of transactions with affiliated and related persons, members of the Management Board, Board of Directors, other officials, significant participants, as well as with any other natural persons associated with the specified persons by common interests;

• standards of professional ethics;

• information on issues of conflict of interest, remuneration and risk management.

64. Information characterizing the corporate governance of the bank, including that provided for in paragraph 63 of this Regulation, may be placed on the bank's website and published in its annual and periodic reports.