Quarterly report pursuant to Section 13 or 15(d)

STATUTORY CAPITAL REQUIREMENTS

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STATUTORY CAPITAL REQUIREMENTS
 3 Months Ended
Jun. 30, 2024
Broker-Dealer [Abstract]  
STATUTORY CAPITAL REQUIREMENTS STATUTORY CAPITAL REQUIREMENTS
The Company has two insurance subsidiaries operating in Kazakhstan: Freedom Life (a regulated life insurer) and Freedom Insurance (a regulated property and casualty insurance entity). The Law of the Republic of Kazakhstan No. 126-II "On Insurance Activities" (the "Insurance Law") is the main law regulating the insurance sector in Kazakhstan. It establishes a framework for insurance activities, registration and licensing of insurance companies and regulation of insurance activities by the Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market (“ARDFM”).
Freedom Life and Freedom Insurance are required to notify and receive verbal approval from the ARDFM of any proposals to declare or pay a dividend on its share capital. The amount of dividends these subsidiaries are permitted to declare is limited to the relevant subsidiary’s realized retained earnings and dividends can only be paid to the extent they will not cause a breach to the minimum solvency and capital requirements of the relevant subsidiary. As of June 30, 2024 and March 31, 2024, Freedom Life and Freedom Insurance were in compliance with the ARDFM dividend, minimum solvency and minimum capital requirements. Freedom KZ in its capacity of an insurance holding is also limited in declaration and payment of dividends if such payment leads to breach of capital ratios applicable to insurance companies Freedom Life and Freedom Insurance.
There are no significant differences between the statutory accounting practices and statements prepared in accordance with U.S. GAAP for the insurance subsidiaries.
In addition, our subsidiaries operate under various securities brokerage, banking and financial services regulations and must maintain such licenses in order to conduct their operations. As of June 30, 2024 and March 31, 2024, we, through our subsidiaries, held: (a) brokerage licenses (i) in Kazakhstan issued by ARDFM and the Astana Financial Services Authority (the "AFSA"), (ii) in Cyprus issued by the Cyprus Securities and Exchange Commission ("CySEC"), (iii) in the United States issued by FINRA, (iv) in Armenia issued by the Central Bank of Armenia, and (v) in Uzbekistan issued by the Ministry of Finance of the Republic of Uzbekistan; (b) a banking license for foreign currency operations license in Kazakhstan issued by the ARDFM; (c) a banking license for corporate and retail banking services in Kazakhstan issued by the ARDFM (including for currency exchange operations); and (d) payment service provider in Kazakhstan is specially registered in such capacity with National Bank of the Republic of Kazakhstan, payment services providers in Uzbekistan and Kyrgyzstan hold licenses from the National Bank of the Kyrgyz Republic and the Central Bank of Uzbekistan, respectively.
The table below presents net capital/eligible equity, required minimum capital, excess regulatory capital and retained earnings as of June 30, 2024 for each of the regulated entities that is material for our condensed consolidated financial statements.
(amounts in thousands) Regulated activities Net Capital/Eligible Equity Required Minimum capital/solvency Excess regulatory capital Retained earnings
Freedom KZ Brokerage $ 98,663  $ 392  $ 98,271  $ 119,274 
Freedom Bank KZ
 Bank 287,384  180,584  106,800  158,915 
Freedom Life Life Insurance 42,612  11,746  30,866  65,887 
Freedom EU Brokerage 269,057  10,971  258,086  567,393 
Freedom Insurance Property and Casual Insurance 31,981  11,746  20,235  23,447 
Freedom Global Brokerage 133,246  22,597  110,649  161,302 
Freedom Armenia ("Freedom AR") Brokerage 13,055  775  12,280  12,791 
Other regulated operating subsidiaries Other 9,304  154 9,150  (17,652)
$ 885,302  $ 238,965  $ 646,337  $ 1,091,357 
According to the requirements of National Bank of Republic of Kazakhstan, the regulator of Freedom KZ and Freedom Life, capital is adjusted through subtraction of non-liquid assets. Consequently, it may result that net capital for regulatory purposes may be lower than retained earnings balances. As per capital requirements Freedom EU regulated by The Cyprus Securities and Exchange Commission and Freedom Global regulated by Astana Financial Services Authority, current year profit is not included within net capital for regulatory purposes, as profits can only be included in net capital after a statutory audit is completed.
The table below presents net capital/eligible equity, required minimum capital, excess regulatory capital and retained earnings as of March 31, 2024 for each of the regulated entities that is material for our condensed consolidated financial statements.
(amounts in thousands) Regulated activities Net Capital/Eligible Equity Required Minimum capital/solvency Excess regulatory capital Retained earnings
Freedom KZ Brokerage $ 107,064  $ 413  $ 106,651  $ 122,416 
Freedom Bank KZ
 Bank 329,738  196,594  133,144  193,376 
Freedom Life Life Insurance 50,757  12,395  38,362  57,085 
Freedom EU Brokerage 269,424  10,868  258,556  319,484 
Freedom Insurance Property and Casual Insurance 30,011  12,395  17,616  19,773 
Freedom Global Brokerage 16,428  12,352  4,076  117,468 
Freedom Armenia ("Freedom AR") Brokerage 7,317  763  6,554  6,447 
Other regulated operating subsidiaries Other 8,533  155 8,378  (11,665)
$ 819,272  $ 245,935  $ 573,337  $ 824,384