Zelensky enacts law to facilitate investment in Ukraine

Ukrainian President Volodymyr Zelensky has signed a bill into law to simplify the procedure for investment and introduce new financial tools.

This was reported on the president's website. 

What will change

The law is designed to remove a number of obstacles that did not let the local capital market develop. It provides for the new wording of the Law on Securities and the Stock Market (the new name is the Law on Capital Markets and Organized Commodity Markets) and the Law on the Commodity Exchange (the new name is the Law on Commodity Exchanges). It also introduces amendments to the Civil, Commercial and Criminal Codes, the Code of Ukraine on Bankruptcy Procedures, and other legislative acts.

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The law comprehensively regulates the functioning of markets for derivative financial instruments (derivatives), capital markets, and organized commodity markets, as well as the development of their infrastructure.

Protecting bondholders' rights

"This law introduces a single approach to organizing asset trading on commodity markets in order to ensure transparency of prices that are formed in such markets and prevent manipulation in them. The document expands the list of financial tools by regarding money market instruments as financial tools, as well as introducing new types of securities – bank deposit certificates, green bonds, options certificates, depositary receipts. The law provides for the regulation of relations arising from the placement and circulation of securities, the conclusion and execution of derivative contracts and transactions with them," the President's Office explained.

Also, it foresees safeguards for bondholders and the protection of their rights, including by introducing such institutions as bondholders' meeting and a collective representative of corporate bondholders.

Obligations to clients

In addition, the document contains a list and descriptions of types of professional activities on the capital markets and organized commodity markets, a description of requirements set for professional participants and their activities, in particular obligations to clients.

Background

• Ukraine undertook to adopt this law by the end of June within the framework of a memorandum with the International Monetary Fund on the current Stand-By Arrangement.
• The Verkhovna Rada, Ukraine's parliament, passed the respective bill on June 19, and its chairman signed it on July 27.
• Earlier, on October 17, 2019, draft law No. 2284 was registered in parliament to introduce amendments to some legislative acts of Ukraine regarding the simplification of attracting investments and the introduction of new financial instruments.
• On December 19, 2019, the Rada approved the bill that facilitates investment in Ukraine.