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NSSMC change the infrastructure of capital markets in Ukraine

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The securities Commission presented a reform concept

The national Commission on securities and stock market (NKTSBFR) introduced the concept of legislative changes regarding the functioning of capital markets in Ukraine. This reports the press service of NSSMC.

It is noted that the Concept was developed with the support of the EBRD working group composed of specialists from the securities Commission, national Bank, National Depository of Ukraine the Settlement center for servicing contracts in financial markets.

The state of development of infrastructure of the capital markets in Ukraine is characterized by high level of fragmentation. In Ukraine there are 8 stock exchanges, a significant number of brokers, dealers, Depository institutions and other professional participants of the securities market. Clearing carried clearing center (the only company having a license for clearing activities in Ukraine) and the stock exchange (with respect to the derivatives are transacted on the relevant stock exchange, without additional licensing), as well as the NBU. The activities of the Central Depository for securities actually exercised by two institutions, the NDU and the NBU.

The concept proposes the following amendments to the legislation on clearing and settlement and Depository operations:

  • consolidation of the functions of the Central Depository the National Depository of Ukraine;
  • clearing Central counterparty clearing should be carried out by institutions licensed by the regulator, abolished the legal monopoly of the clearing centre to conduct monetary settlements on transactions with securities;
  • requirements for the activities of the Central counterparty and the Central Depository shall be established in accordance with EMIR and CSDR, given the real potential for their implementation in the future – the market access of foreign Central counterparties;
  • must be assured fair and open access to Central counterparties and exchanges to exchanges with Central counterparties (subject to appropriate operational and technical requirements);
  • introduces “hybrid” model of clearing, that is, taking into account the liquidity of the financial instruments;
  • require separation (segregation) of assets belonging to different clearing members, or in various Depository institutions and assets Depository and clearing institutions from the assets of their clients;
  • the client has the right to choose between individual (individual client segregation) and a generalized segregation (omnibus client segregation)
  • the construction of a system of cash payments should include the tolerance of the Central counterparty to the System of electronic payments of the NBU;
  • increases the level of the corporate governance requirements of the Central counterparty and the Central Depository, irrespective of their legal form.

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