Company: FRHC
Filing Date: 2025-07-29
Form Type: ARS
Source: 0000924805-25-000027
Chunk: 27

Company: Freedom Holding Corp.
Filing Date: 2025-07-29
Form: ARS
Chunk 27
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, including: • minimum net capital and capital adequacy requirements; • the use and safekeeping of customers' funds and securities; • recordkeeping and reporting requirements; • customer identification, clearance and monitoring to identify and prevent money laundering and funding of terrorism, U.S. Department of Treasury's Office of Foreign Assets Control ("OFAC") and other non-U.S. sanctions violations, to follow FATF recommendations; • tax reporting obligations under QI, FATCA and CRS regulations; • supervisory and organizational procedures intended to monitor and assure compliance with relevant laws and regulations and to prevent improper trading practices; • employee-related matters, including qualification and certification of personnel and senior management; • provision of investment and ancillary services, clearance, and settlement procedures; • maximum loan and bank guarantees concentration issued to shareholders and group of borrowers; • credit risk requirements; • liquidity risk requirements; • acquisitions; • investment limitations; • competition; • IT, information security and personal data protection; • risk detection, management, and correction; and • various shareholders' requirements required for obtaining regulatory status (banking holding, major shareholder, insurance holding, etc.). The regulatory authorities in each jurisdiction where we are regulated establish minimum net capital and capital adequacy requirements, which as of March 31, 2025 range from approximately $0.3 million to approximately $175.4 million in local currency equivalents and fluctuate depending on various factors. As of March 31, 2025, the Table of Contents 20

aggregate net capital requirements of our subsidiaries was approximately $441.1 million. As of March 31, 2025, aggregate excess regulatory capital for all of the operating subsidiaries was $1,182.8 million. Our regulated insurance subsidiaries are subject to regulations and standards in Kazakhstan, which require these subsidiaries to maintain specified levels of statutory capital, as defined by Kazakhstan law, and restrict the timing and amount of dividends and other distributions which may be paid to their parent company. For the years ended March 31, 2025 and March 31, 2024, our insurance subsidiaries did not pay dividends to their parent company. In the event one or more of our subsidiaries fails to maintain minimum/adequate net capital, we may be subject to fines and penalties, suspension of operations, and disqualification of our management from working in the relevant industry. Our subsidiaries are also subject to rules and regulations regarding liquidity ratios. Compliance with minimum capital requirements could limit our expansion into activities and operations that require significant capital. Minimum capital requirements could also restrict the