President Volodymyr Zelenskyy signed Law No1587-IX On Amendments to Certain Legislative Acts of Ukraine Concerning Improving the Organization of Corporate Governance in Banks and Other Issues of the Functioning of the Banking System, according to representatives of the president.
The law is an important condition for revising the IMF stand-by financing program and receiving the second tranche of $5,5 billion.
- What the law provides:
- Strengthens corporate governance in banks by increasing the responsibility of the board and the board of the financial institution for the decisions taken.
- The list of issues related to the exclusive competence of the bank's council is expanding. Requirements are established for members of the bank's council and board regarding their collective suitability.
- Introduces a three-tier system of internal control of the bank, which should be integrated into the corporate governance system.
- Prescribes a new structure of the bank's capital, including the requirements for the formation of capital buffers. Requirements are established for the adequacy of the internal capital and liquidity of the bank, taking into account possible risks.
- Expands the powers of the National Bank.
- Improves regulations on consolidated supervision of banking groups, approving acquisitions or increasing significant participation in banks, tightens licensing requirements for banks and shareholders.
