This legislative move, encapsulated in the law "On Amendments to the Law of Ukraine 'On State Regulation of Capital Markets and Organized Commodity Markets' and some other legislative acts of Ukraine on regulation and supervision of capital markets and organized commodity markets" (bill No. 5865), was adopted by the Verkhovna Rada and is a pivotal step towards meeting the requirements for a $1.5 billion development loan from the World Bank.
Yaroslav Zheleznyak, deputy head of the specialized committee of the Council, indicated that the World Bank's decision regarding the $1.5 billion Development Policy Loan (DPL) to Ukraine is anticipated for March 26. Following the signing of this law, a favorable outcome is now expected.
The law was not without its controversies, particularly concerning amendments related to salary adjustments within regulatory bodies through staff optimization while maintaining the 2022 budget level, and provisions regarding conflict of interest and employment of regulator employees' relatives in the market. Despite these debates, the law includes measures to mitigate real or potential conflicts of interest among employees of the National Commission for State Regulation of Financial Services Markets (NCSCFR), with a Procedure for the prevention, informing, management, and settlement of conflicts of interest to be established by the Commission's employee Code of Ethics.
This legislative development is crucial for enhancing transparency, efficiency, and supervision within Ukraine's financial markets, aligning with international standards and expectations. It also solidifies Ukraine's commitment to regulatory reform and financial stability as part of its broader economic development and integration into global financial systems.
