OREANDA-NEWS. The Board of the National Bank of Ukraine has adopted a number of resolutions to fulfill the requirements of the Law of Ukraine On the Depository System of Ukraine (effective on 12 October 2013), which provides for an establishment of new stock market infrastructures and defines that the settlement of transactions in securities is governed by the principle “the delivery of securities against payment” and carried out through the Settlement Center for Servicing Financial Market Agreements.

Thus, Resolution of the National Bank of Ukraine Board No.387 dated 25 September 2013 On the Establishment of the Details of the Settlement of Transactions in Securities and Approval of the Regulation on Depository and Clearing Activities of the National Bank of Ukraine (registered with the Ministry of Justice of Ukraine under No. 1727/24259 on 9 October 2013) specifies the details of the settlement of transactions in securities and defines depository and clearing activities performed by the National Bank of Ukraine, as prescribed by the above-mentioned law.

The Regulation on Depository and Clearing Activities of the National Bank of Ukraine establishes a legal framework governing activities of the National Bank of Ukraine as a securities depository and a depository institution, and brings the powers exercised by the National Bank of Ukraine on the stock market in line with the provisions of the Law of Ukraine On the Depository System of Ukraine. The above-mentioned Regulation, inter alia, sets out the principles for liaison between the National Bank of Ukraine Depository and other institutions, establishes the procedure for concluding and executing agreements by the National Bank of Ukraine Depository, and the procedure for servicing transactions in securities by the National Bank of Ukraine Depository under these agreements.

By virtue of Resolution of the National Bank of Ukraine Board No. 386 of 25 September 2013 (registered with the Ministry of Justice of Ukraine under No. 1726/24258 on 9 October 2013), the National Bank of Ukraine approved the Procedure for Transfer of Municipal Bonds Issues to the National Bank of Ukraine, which aims to meet the requirements of the Law of Ukraine On the Depository System of Ukraine and envisages that on 12 October 2013 all issues of book-entry municipal bonds shall be transferred to the National Bank of Ukraine where they will be held in custody on accounts opened for respective issuers and depository institutions.

On 30 September 2013, the National Bank of Ukraine approved Resolution No. 394 (registered with the Ministry of Justice of Ukraine under No. 1728/24260 on 9 October 2013), whereby the Regulation on Regulation of Ukrainian Banks' Liquidity by the National Bank of Ukraine was amended to include the provisions that clarify the process of confirming the availability of municipal bonds held by the bank when these securities are used as collateral for refinancing loans (based upon records of municipal bonds on the books of the depository).

Putting the above-mentioned resolutions into practice will foster centralization of depository record-keeping and settlement functions, facilitate the introduction of clear and transparent securities settlement mechanisms in accordance with global practices, international standards and recommendations on depository record-keeping of securities and applicable laws.