Banking & Financial Services Committee Meeting



On September 21, the Chamber Banking & Financial Services Committee meeting took place and was moderated by Mr. Ihor Olekhov, Partner, Baker & McKenzie, Committee Co-Chair. 

The agenda of the meeting comprised the following issues: 

1.  Draft Law #2302a "On Amendments to Some Legislative Acts of Ukraine to Improve Corporate Governance in Joint Stock Companies" registered in the VRU on July 7. 

Special guest of the meeting was Mr. Maxym Libanov, Director of the Analysis, Strategy and Legislation Development Department of the National Commission for Securities and Stock Market of Ukraine. 

Draft Law #2302a , in particular, includes the need to create the conditions for consolidation of all shares of the company by the controlling shareholder (owner of more than 95% of shares) of public joint stock companies through introduction of public demands of majority shareholders to purchase shares of minority shareholders (squeeze-out). 

In addition, the Draft Law aims at the implementation of Directive 2004/25 / EC of the European Parliament on acquisition proposals in the framework of the Association Agreement between Ukraine and the European Union. That Directive settled the issue of the rights of minority shareholders to require shareholder - the owner of 95% compulsory acquisition of shares at a fair price of shares belonging to such minorities (sell-out) and the right shareholder - the owner of 95% of shares from minority shareholders to require mandatory sale of their shares (squeeze-out). 

Mr. Libanv also emphasize that the Draft Law aims to protect the assets of majority shareholders and minority shareholders, specifically the right to receive the fair price for stocks. 

According to the Draft Law, the fair value of share buy majority shareholders - is the highest price of:

  • the stock exchange price (continuously for the last 3 months);
  • the highest price of stock purchase by the majority shareholders;
  • the price stated in the public offer. 

Action: The Committee agreed to support the Draft Law, but also to alert some of the concern which needs to be resolved before the first reading of Draft Law in VRU:

  1. Do not include and develop separate procedure for Joint Stock Companies which were established before the adoption and enforcement of the respective Law;
  2. Introduce the mechanism (based on the best international experience) to prevent the manipulations with the stocks’ price on the market;
  3. Consider to include Holding Companies to the object of governance by this law;
  4. Consider this Draft Law as the mechanism to clean-up the Joint Stock Companies from the “dead soul” (non-active shareholders).

The Committee will address the VRU Committee, NCSSM with the support letter including mentioned Chamber proposals.

2.  Chamber Draft Law and Draft Comparative Table “On Amendments of Some of the Legislative Acts regarding Financial Pledge” and respective Draft Explanatory Note, by Ms. Ulyana Shtybel, Chamber Policy Officer (Banking & Financial Services).

Proposals were developed by experts of the Chamber Member Company Gide Loyrette Nouel. Proposals state that in Ukraine, the financial pledge, including pledge of securities is a popular financial tool, but the possibility of such collateral differs from the requirements of the EU Directive. Unlike the current Ukrainian legislation, which regulate the financial pledge the provisions of EU law requiring minimize formalities of financial pledge contract, granting validity of the mortgage foreclosure on collateral and actual transfer of ownership of collateral mortgagee. According to the agreement with the EU, the legislation of Ukraine should give opportunity to replace the collateral in case of alienation of the pledge, allow not only the pledge of deposit, but also the current account, opportunity to use the collateral by mortgagee, ability to transfer claims, and non-use of the mechanism of financial collateral moratorium in terms of bankruptcy if the penalties were applied or encumbrance parallel insolvency proceedings of the pledger.

Additionally, in the current regulations, there is still controversy about what exactly is the subject of the contract of bank account and, according, the pledge agreement - own funds for credit or related property claims to the bank. To ensure the uniform application of law and the avoidance of conflicts the question should be clearly regulated by the adoption of the proposed amendments to the legislation and aligning regulations Cabinet of Minister of Ukraine and National Bank of Ukraine. Designated changes were positively assessed by the response letter of the National Bank of Ukraine.

Action: Committee agreed on the context of the Draft Law and to submit it to VRU and Regulators. Moreover Mr. Libanov agreed that this Draft Law will be partially incorporated to the Draft Law “On Derivatives” or “Financial Infrastructure” which are developed by the experts of NCSSM.

3.  Draft Law #2449 “On Amendments to Article 8 of the Law of Ukraine "On Measures to Promote the Capitalization and Restructuring of Banks” registered in the VRU on March 20, by Mr. Vyacheslav Lysenko, Assistant of the Coordinator of the Committee for the for Regulatory Policy and Supervision, NABU.

Please click here to view the Presentation (in Ukrainian). 

Action: The Committee agreed to continue the examination of the Draft Law, because this bill creates risks of default of the banks. Accordingly, the Draft Law shouldn’t go against the unconditional fulfillment of all schedule of banks capitalization accordingly to the NBU Resolution #260.

4.  Draft Law #2506а “On Authorities and Persons Engaged in the Enforcement of Judgments and Decisions of Other Authorities” and Draft Law #2507а “On Enforcement Proceedings” registered in the VRU on August 14, by Mr. Ihor Olekhov, Partner, Baker & McKenzie, Committee Co-Chair.

Action: The Committee strongly supports respective Draft Laws and Chamber Legal Committee Position Paper revised in accordance to the Chamber Position (with Annex), sent to the Presidential Administration regarding the Draft Laws, concerning system of execution of judgments and prepare Chamber letter on Draft Laws #2506a and #2507a.

5.  Draft Comparative Table and Draft Law of Ukraine "On Amendments to Some Legislative Acts on Obligatory Insurance of Civil Liability of Vehicle Owners", by Mr. Andrey Peretyazkho, Vice-President AXA-Insurance, Committee Co-Chair.

Please click here to view the Presentations (in Ukrainian). 

Action: Considering the importance of the Draft Law and joint position of the insurance association, the Chamber agreed with the concept and will provide supporting letter addressing the VRU Committee and responsible authorities.

6.  Draft CMU Resolution “On Some Questions on Cashless Payments” (regarding Legal Requirement to Have the POS-Terminal at Selling Points of Goods and Services), by Mr. Alexander Karpov, Director of Ukrainian Interbank Payment Systems Member Association "EMA",  Chairman of the Commission on Payments in the NBUPublic Council.

Please click here to view the Presentations (in Ukrainian). 

Action: The Committee supports the initiative of the Cabinet of Ministers of Ukraine in order to adopt the legislation in line with requirements of the law on the cash register. The Chamber drew attention to the practical implementation of the legislation and need to clarify with the NBU that the non-cash payments are considered as payment terminals, allowing businesses not to use the cash register.

We encourage all interested Chamber Members to provide feedback to the abovementioned draft document by Friday, October 2, COB.