Another step to attract investment: MPs passed a law

The Verkhovna Rada of Ukraine adopted Law №2284 "On Amendments to Certain Legislative Acts of Ukraine Concerning Simplification of Attracting Investments and Introduction of New Financial Instruments".

285 people's deputies voted for the decision. It is noted that the document is aimed at introducing international practice in the capital markets of Ukraine, including the latest legislative changes in the European Union

The law provides for a comprehensive settlement of issues:

  • functioning of derivative financial instruments markets;
  • functioning of capital markets and organized commodity markets, as well as the development of their infrastructure;
  • regulation of relations arising in the markets of derivative securities and derivative contracts;
  • establishing common approaches to regulating the activities of trade organizers;
  • establishing guarantees for the performance of derivative contracts, including the concepts of finality of settlements and liquidation netting generally accepted in developed economies;
  • ensuring the protection of the rights of bondholders, in particular, by providing for the institution of a meeting of bondholders and a collective representative of corporate bondholders, in accordance with world best practices.

To this aim, the law restates the laws of Ukraine "On Commodity Exchange" and "On Securities and Stock Market", changing the name of the latter to the Law of Ukraine "On Capital Markets and Organized Commodity Markets", as well as making appropriate changes to the Civil, Commercial and Criminal Codes, the Bankruptcy Procedure Code of Ukraine, the laws of Ukraine "On State Regulation of the Securities Market in Ukraine", "On Financial Services and State Regulation of Financial Services Markets", "On Joint Stock Companies" and a large number of other legislative acts of Ukraine.

In particular, the new version of the Law on the Securities proposes to expand the list of financial instruments by classifying money market instruments as financial instruments, as well as introducing a new type of securities - bank certificates of deposit, green bonds, option certificates, depository receipts, etc.

According to the authors of the bill, the domestic securities market is underdeveloped. In particular, due to the fact that Ukraine does not use world-famous financial instruments, including derivatives. There are about 600 commodity exchanges in Ukraine, but there is no single commodity index, ie an objective price for a commodity that would be used in the country. The adopted law should resolve this situation.

Note that according to the State Statistics Service - in the first quarter of 2020, investment in Ukraine's economy fell by 35%. At the same time, the World Bank said that the situation in China, where the coronavirus epidemic broke out, could reduce the inflow of investment into Ukraine.

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