National Bank of Ukraine Suggests Allowing Banks to Transform into Private Joint Stock Companies

Presently, pursuant to the  Law of Ukraine On Banks and Banking, banks shall operate only in the form of a public joint stock company or a cooperative bank. All banks operating in Ukraine are public joint stock companies.

The move by the NBU has been prompted by the need to upgrade the banking legislation and laws on securities.  The regulator believes that it is inappropriate to demand from banks that are unable to raise capital at the stock exchange to exist in the form of a public joint-stock company and deems it necessary to grant them the option to transform into private joint stock companies.

This move by the regulator is in line with recent amendments to the Law of Ukraine On Joint-Stock Companies, revised requirements governing the operation of stock exchanges and new legislative initiatives on the development of the stock market. The NBU backs the National Securities and Stock Market Commission’s  policies aimed at ensuring the development of the Ukrainian stock market   enabling the circulation of securities floated only by the issuers listed on stock exchanges that are qualified to meet the standards for listing on stock exchanges.

At the same time, the NBU underlines that regardless of the type of joint stock company, a bank has to disclose information and ensure strict compliance with corporate governance requirements.

The NBU suggests amending the Law of Ukraine On Banks and Banking  and the Economic Code of Ukraine, and aligning the provisions of the Laws of Ukraine On Joint-Stock Companies and On Securities and Stock Market with banking legislation.

The NBU also initiates legislative amendments intended to simplify the registration procedures for banks that opt for the transformation of a public joint-stock company into a  private joint-stock companies and lift registration fees.