Changes in Banking and Finance Law in November-December 2021
| NOVEMBER |
The NBU suggests public discussion of new requirements for providers of accompanying and ancillary services in the financial leasing market
The Regulations on streamlining the provision of ancillary services in the financial leasing market will regulate such issues. Among others, the following requirements will be discussed:
- impeccable business reputation as well as sufficient level of knowledge on financial leasing, legislation on the protection of the rights of consumers of financial services, and personal data protection;
- training of providers of accompanying services and improving their knowledge through training on financial leasing, legislation on the protection of the rights of consumers of financial services, and personal data protection organized by the lessor;
- disclosure of information about providers of accompanying and ancillary services on lessors’ websites;
- definition of ancillary services etc.
The NBU approved changes to the procedure for issuing licenses to legal entities with for provision of collection services to banks
The changes include, in particular:
- the Board of the National Bank authority to issue licenses for provision of collection services to banks, granting approval for cash processing and storage operations;
- the staff of the legal entity acting as an applicant must include a chief accountant complying with the requirements for business reputation and professional suitability;
- requirements for professional suitability and impeccable business reputation of the head of the department for processing and storage of cash;
- the list of infringements that lead to cancellation by the National Bank of the decision to approve processing and storage of cash by the legal entity is expanded.
RESOLUTION #115 | RESOLUTION #120
From November 26, Visa and Mastercard reduced the domestic interbank commission rates in Ukraine to 1.2%
The development became possible due to the Antimonopoly Committee of Ukraine having granted permission on November 11, 2021 to Mastercard and Visa for concerted actions, namely reducing the size of domestic interbank commission rates.
| DECEMBER |
The NBU raises the key policy rate by 0.5% to 9% per annum
The key policy rate is set on the basis of a macroeconomic forecast together with a comprehensive analysis of monetary and financial development prepared by the National Bank. The decision to raise the rate is aimed at leveling the impact of additional pro-inflation risks, improving inflation expectations and ensuring a steady reduction in inflation to 5%.
The NBU has updated its approaches to consolidated supervision of non-banking financial groups (NBFGs)
The novelties include:
- the procedure for identification, recognition, termination of recognition of NBFGs having their predominant activity carried out by financial institutions and being governed and supervised by NBU;
- the requirements to the ownership structure of NBFGs, clear criteria (indicators) of control and conditions of their application are defined, moreover, the process of clarification of the perimeter of NBFGs consolidation at the initiative of the regulator is specified;
- the criteria for determining subgroups in the NBFGs and their types and the classification of groups by volume of assets;
- the requirement for NBFGs officials to calculate the regulatory capital adequacy of the group on the basis of annual consolidated reports and such other reports and additional information according to the updated algorithm;
- an annual submission of information on significant intragroup transactions by NBFGs officials, therefor a “materiality threshold” for such transactions is set and it is provided for the frequency of such information provision depending on the size of the group's assets at the request of the regulator.
The NBU has supplemented the list of capital buffers that banks need to create to increase their ability to withstand risks in times of financial and economic instability: conservation, countercyclical and systemic importance includes a systemic risk buffer to mitigate non-cyclical systemic risks.
To control the formation of capital buffers by banks in the established amount, the term “combined capital buffer” has been introduced, which will be defined as the total amount of capital buffers set for the bank.
Clear criteria for recognizing a person as a qualified investor has been established
New acts on investment attraction simplification and introduction of new financial instruments have been developed by the National Securities and Stock Market Commission. They entered into force on December 10, 2021.
Thus, 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 recognizing transactions with respect to financial instruments concluded during the last four quarters to recognize a person as a qualified investor;
- the method of calculating own funds for the purposes of recognizing a person as a qualified investor, etc.
The Commission has also developed rules for conducting sounding in capital markets, which provide for:
- the procedure for obtaining consent to the transfer of insider information to a potential investor;
- responsibilities of the person being sounded;
- the procedure for transmitting information on sounding in the capital markets and record keeping;
- the amount of information disclosed etc.
The Regulation on the procedure for conducting monetary settlements on transactions in securities and other financial instruments concluded in organized capital markets and outside organized capital markets in compliance with the “delivery versus payment” principle (DVP) has been approved by the NBU of Ukraine
The Regulation sets forth:
- requirements for entities providing cash settlements for transactions in securities and other financial instruments markets in compliance with the DVP;
- the procedure for conducting cash settlements in compliance with DVP through the reflection in the accounting system of the person conducting clearing activities, of the changes in the rights and obligations as for funds with reflection of the transfer of claims, including termination of obligations with a view to netting results;
- the procedure for conducting cash settlements on transactions in securities and other financial instruments in compliance with the DVP using the technologies of the Electronic Payment System of the National Bank (EPS);
the procedure for providing the Central Securities Depository with access to the technology of servicing settlements using special EPS media.
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