Investor Protection in Ukraine

by Olha Povaliaieva
Friday, December 3, 2021
Investor Protection in Ukraine

The Ministry of justice has registered two new documents developed and approved by the National Securities and Stock Market Commission

According to the National Commission on Securities and Stock Market, this is a decision to establish criteria for recognizing a person as a qualified investor and a regulation on probing capital markets. The regulator has developed both documents to introduce the norms of the law regarding the simplification of attracting investments and the introduction of new financial instruments. They come into effect on December 10, 2021.

These documents disclose at the regulatory level and explain the mechanisms of operation of new concepts in capital markets laid down in the current legislation. We tried to develop the most understandable mechanisms for market participants, which in one way or another will contribute to an increase in the level of protection of investors' rights in the Ukrainian capital market,” said Maxym Lybanov, representative of the National Securities and Stock Market Commission.

The Commission has established clear criteria for recognizing a person as a qualified investor, namely:

  • criteria for foreign financial institutions to be recognized as qualified investors;
  • criteria for recognition of transactions in financial instruments that were concluded within the last four quarters, for recognition of a person as a qualified investor;
  • methodology for calculating own funds to recognize a person as a qualified investor, etc.

The Commission also developed rules for conducting soundings in capital markets, which provide for:

  • the procedure for obtaining consent to transfer insider information to a potential investor;
  • duties of the person in respect of whom the sounding is carried out;
  • the procedure for transferring information about sounding in the capital markets and keeping records of documents;
  • the amount of information disclosed, etc.
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