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RESOLUTION OF BOARD OF THE NATIONAL BANK OF UKRAINE

of October 16, 2018 No. 107

About approval of the Regulations on procedure for forming and storage by banks of Ukraine and branches of foreign banks in Ukraine of reserves according to forward and futures contracts with delivery or without delivery of underlying asset which variable is the currency rate or the price of bank metal

According to Articles 6, of 7, of 15, 25 and 56 Laws of Ukraine "About the National Bank of Ukraine", for the purpose of risk minimization of accumulating of currency imbalances owing to the conclusion by participants of the market of forward and futures contracts of banks with delivery or without delivery of underlying asset which variable is the currency rate or the price of bank metal the Board of the National Bank of Ukraine DECIDES:

1. Approve Regulations on procedure for forming and storage by banks of Ukraine and branches of foreign banks in Ukraine of reserves according to forward and futures contracts with delivery or without delivery of underlying asset which variable is the currency rate or the price of bank metal which is applied.

2. To department of the public markets (Ponomarenko S. V.) after official publication to inform banks information on adoption of this resolution.

3. To impose control over the implementation of this resolution on the vice-chairman of the National Bank of Ukraine Chury A. E.

4. The resolution becomes effective from the date of, its official publication following behind day.

Acting as Chairman

K. V. Rozhkova

The Resolution of Board of the National Bank of Ukraine of October 16, 2018 is approved No. 107

Regulations on procedure for forming and storage by banks of Ukraine and branches of foreign banks in Ukraine of reserves according to forward and futures contracts with delivery or without delivery of underlying asset which variable is the currency rate or the price of bank metal

I. General provisions

1. This Provision is developed according to the Laws of Ukraine "About the National Bank of Ukraine", "About banks and banking activity" and to regulatory legal acts of the National Bank of Ukraine (further - National Bank).

2. The National Bank uses reservation of forward and futures contracts with delivery or without delivery of underlying asset which variable is the currency rate or the price of bank metal (further - currency derivatives) as one of instruments of indirect regulation of export and capital import for the purpose of prevention to expansion of systemic risks which can arise owing to the conclusion participants of the market of such contracts.

Requirements of this provision do not extend on currency forwards who are the second part of currency swaps.

3. In this Provision terms are used in such value:

1) underlying asset - asset (foreign currency or bank metal) which is basis of the derivative which is bought/is on sale for national currency in accordance with the terms of the currency derivative;

2) the currency derivative - the forward or futures contract with delivery or without delivery of underlying asset which variable is the currency rate or the price of bank metal;

3) the standard rate of reservation on currency derivatives (further - the standard rate of reservation) - the reserve size established by National Bank in percentage value on currency derivatives to subject to reservation;

4) subject to reservation on currency derivatives (further - subject to reservation) - the amount of assets (requirements) and/or liabilities (obligations) on currency derivatives of banks according to balance and off-balance sheet accounts;

5) the period of determination of base which is subject to reservation (further - the determination period) - certain term during which the base for reservation of currency derivatives is calculated;

6) the period of content of reserves on currency derivatives (further - the abstention period) - certain term during which money is reserved and stored on correspondent account in National Bank according to the established standard rates;

7) reserve on currency derivatives - the arithmetic-mean amount of means on currency derivatives which is stored by bank on correspondent account in National Bank during content;

8) the reserve base on currency derivatives - the arithmetic-mean amount of means which is calculated for the period determinations according to the established standard rates of reservation and is subject to reservation and storage during content.

Other terms and concepts used in this Provision are applied in the values determined by the legislation of Ukraine and regulatory legal acts of National Bank.

4. The National Bank establishes identical requirements to banks on forming and storage of reserves on currency derivatives.

5. The standard rate of reservation is effective concerning those currency derivatives which are concluded after entry into force of the decision of National Bank on establishment of requirements of reservation.

The standard rate of reservation is applied in the amount of, acting on the date of the conclusion of the currency derivative, and is invariable during all effective period of the currency derivative (about day of final settlement on it or its termination).

6. Banks create reserves on currency derivatives in monetary unit of Ukraine on correspondent account in National Bank (further - correspondent account) more than an amount of forming of the required reserves calculated according to normative and legal and administrative acts of National Bank concerning procedure for forming and storage of required reserves (further - required reserves).

7. Requirements concerning observance by bank of procedure for forming and storage of reserves for currency derivatives and required reserves are executed if the arithmetic-mean amount of means on correspondent account during content is equal or exceeds the total amount of reserve bases on currency derivatives and required reserves.

8. The amount nedorezerviruyemy is determined by bank of means on currency derivatives and required reserves as negative difference between the actual arithmetic-mean amount of remaining balance of means on correspondent account of bank for the period of content and the total amount of the calculated reserve bases by currency derivatives and required reserves for the period of determination.

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