REFORM IN THE SECURITIES CLEARING AND SETTLEMENT SYSTEM REGULATION IN UKRAINE
AbstractRecent developments in the regulation of securities clearing and settlement system in Ukraine aimed at harmonization of Ukrainian securities legislation with the European and international regulatory standards are discussed in this article. Attention is focused on the key provisions of the Law of Ukraine “On Depository System of Ukraine” which has become one of the cornerstones of the legislative framework for the securities market regulation. These provisions are compared with the rules of UNIDROIT Convention on Substantive Rules for Intermediated Securities and the level of harmonization of the Ukrainian securities legislation with the international standards is evaluated. Particular attention is paid to the concepts of intermediated securities and intermediaries, the issues of transfer and exercise of the rights in securities and rights attached to securities under the specified Law are explored, as well as the insolvency of intermediaries and its effect on their relations with the securities account holders is scrutinized. Attention is also devoted to the regulation of netting in Ukraine and major innovation introduced in legislation in this respect. The outcomes of the author’s analysis are summarized and general comments are provided as to the degree of finality of harmonization process in the Ukrainian securities regulation and regulation of clearing and settlement systems.
Law of Ukraine “On Depository System of Ukraine” dated 6 July 2012 No. 5178-VI (as amended). The official text in Ukrainian is available at: http://zakon5.rada.gov.ua/laws/main/5178-17.
Law of Ukraine “On National Depository System and Specific Features of Electronic Circulation of Securities in Ukraine” dated 10 December 1997 No. 710/97-BP. The official text in Ukrainian is available at: http://zakon5.rada.gov.ua/laws/show/710/97-%D0%B2%D1%80.
Law of Ukraine “On Joint Stock Companies” dated 17 September 2008 No. 514-VI (as amended). The official text in Ukrainian is available at: http://zakon5.rada.gov.ua/laws/main/514-17.
UNIDROIT Convention on Substantive Rules for Intermediated Securities, adopted at Geneva on 9 October 2009. The official text is available at: http://www.unidroit.org/English/conventions/2009intermediatedsecurities/conference/conferencedocuments2009/conf11-2-042-e.pdf.
Aigbekaen E. K. The Challenges of Establishing an Efficient Securities Settlement System in an Emerging Market // Uniform Law Review/Revue de Droit Uniforme. – 2010 – Vol.XV. – P. 649.
Mooney Ch. W., Kanda H. Core Issues under the UNIDROIT (Geneva) Convention on Intermediated Securities: Views from the United States and Japan / Intermediated Securities: Legal Problems and Practical Issues. – Oxford: Hart Publishing, 2010.
Law of Ukraine “On Restoration of the Solvency of a Debtor or its Recognition as Bankrupt” dated 14 May 1992 No. 2343-XII (as amended). The official text in Ukrainian is available at http://zakon2.rada.gov.ua/laws/show/2343-12.
Bossu W. Securities Holding Regimes and Bank Resolution Law: Cold War, Peaceful Co-Existence or Friendly Alliance? // Uniform Law Review/Revue de Droit Uniforme. – 2010. – Vol. XV. – P. 669.
Wood Ph. R. Set-Off and Netting, Derivatives, Clearing Systems. – London: Sweet & Maxwell, 2007.
Ruling of the Supreme Court of Ukraine dated 11 April 2006 No.4/797-7/73. The text in Ukrainian is available at: http://zakon2.rada.gov.ua/laws/show/v7_73700-06.
Civil Code of Ukraine dated 16 January 2003 (as amended). The official text in Ukrainian is available at: http://zakon2.rada.gov.ua/laws/main/435-15.
Law of Ukraine “On Securities and Stock Market” dated 23 February 2006 No. 3480-IV (as amended). The official text in Ukrainian is available at: http://zakon4.rada.gov.ua/laws/show/3480-15/print1364651995612721.