Bill on enhancing Securities, Stock Market Commission, participants' fees submitted to Rada

KYIV. Aug 30 (Interfax-Ukraine) – MPs from the ruling Servant of the People faction, including head of the Committee on Finance, Taxation and Customs Policy Danylo Hetmantsev, propose to expand the regulatory functions of the National Securities and Stock Market Commission, as well as to increase its funding at the expense of contributions from market players and paid provision of administrative services.

Relevant bill No. 5865 on amendments to the law regarding state regulation of capital markets and organized commodity markets and to certain legislative acts regarding regulation and supervision of capital markets and organized commodity markets was registered at the parliament on August 26 and published on its website.

The authors of the bill said in an explanatory note that in connection with the adoption in 2020 of the laws on capital markets, organized commodity markets and on commodity exchanges, the regulator needs to strengthen the regulatory consistency, as well as expand the powers and introduce appropriate mechanisms for the implementation of these powers.

The document also states that the National Securities and Stock Market Commission has been a member of the International Organization of Securities Commissions (IOSCO) since 1996, but has not yet joined the IOSCO Multilateral Memorandum and has not received full membership in this organization, in particular due to insufficient legislative support for a high level of institutional capacity.

The bill also provides for the consolidation of guarantees of independence of the National Securities and Stock Market Commission and gives it additional powers in terms of law enforcement and investigation of violations. Separate provisions are devoted to the protection of the regulator’s employees from any illicit influence, pressure, interference, as well as to the specifics of financing and material and technical support for the activities of the National Commission.

In terms of strengthening the financial independence of the National Securities and Stock Market Commission, annual regulatory fees were proposed to be charged from existing professional market players: traders in financial instruments, custodians, asset management companies – 15 living wages (in the case of a combination of types, the largest fee is paid), trade organizers, clearing organizations – 75 living wages (living wage – UAH 2,379).

According to the draft law, the fee for registration of the issue may be 25 living wages, for admission of foreign securities – five living wages, for the approval of candidacies for the heads of professional participants – 27 living wages.

As reported, earlier attempts were also made to pass a similar law at the Verkhovna Rada, but to no avail. Ukraine even pledged to pass a similar law to strengthen the independence and institutional capacity of the National Securities and Stock Market Commission as part of a memorandum with the IMF in June 2020.