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NBU allowed local authorities to place their bonds on the stock exchange

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The regulator believes that innovation will facilitate the access of local authorities to the borrowed funds

The national Bank will enable local councils to place their bonds at stock exchanges on a par with government bonds. The corresponding solution is fixed by the NBU resolution No. 70 and shall come into force on 26 June 2018.

In a statement posted on the regulator”s website notes that this decision will facilitate the access of local authorities for borrowing. To empower the regional and city councils, the national Bank has prescribed the procedures of the NBU Depositary, the stock exchange and of the Issuer.

And made changes in the plan of balance sheet accounts to reflect in the system of Depository accounting placed on the exchange of paper.

It is noted that local authorities will have the opportunity to place the bonds on the stock exchange, using calculations according to the principle “delivery of securities without payment”.

Meanwhile, it should be noted that bonding is not the most popular source of borrowed funds for the Ukrainian regions. Moreover, recently, the regional councils are increasingly placing unused budget funds on deposits in state banks. Because it is unclear, do take advantage of the regions a new tool from the NBU.

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