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RESOLUTION OF BOARD OF THE NATIONAL BANK OF UKRAINE

of February 1, 2021 No. 12

About approval of the Regulations on application of corrective actions by the National Bank of Ukraine in the sphere of state regulation of activities in the markets of non-bank financial services

(as amended on 17-11-2023)

According to Articles 7, 15, 55-1, 56 of the Law of Ukraine "About the National Bank of Ukraine", to Articles 21, 22, 28, 29, 38-1 - 42 Laws of Ukraine "About financial services and state regulation of the markets of financial services", to Articles 2, 37 Laws of Ukraine "About insurance", to Articles 26, 27 Laws of Ukraine "About credit unions", article 26 of the Law of Ukraine "About advertizing", for the purpose of settlement of procedure and conditions of application of corrective actions (sanctions) in the sphere of state regulation of activities in the markets of the non-bank financial services Board of the National Bank of Ukraine DECIDES:

1. Approve Regulations on application of corrective actions by the National Bank of Ukraine in the sphere of state regulation of activities in the markets of non-bank financial services (further - the Provision) which is applied.

2. No. 87 "About ensuring implementation of powers and accomplishment of functions on state regulation and supervision in the sphere of the markets of financial services in questions of application of corrective actions" to exclude item 4 of appendix to the resolution of Board of the National Bank of Ukraine of June 25, 2020.

3. Recognize invalid regulatory legal acts of State commission on regulation of the markets of financial services of Ukraine and the National commission performing state regulation in the sphere of the markets of financial services according to the list which is attached.

3-1. The participant of the market of non-bank financial services, if before the termination of the term established in the decision on application of corrective action, accepted according to provision, the regulatory legal act of State commission on regulation of the markets of financial services of Ukraine or the National commission performing state regulation in the sphere of the markets of financial services which regulation was broken ceased to be valid, in time, determined in such decision provides reduction of the activities in compliance with requirements of the regulatory legal act of National Bank which contains similar regulation.

4. The resolution becomes effective from the date of, its official publication following behind day, except the paragraph of the third subitem 3 of Item 9 of the Section III of Provisions which becomes effective on March 1, 2021.

Chairman

K. Shevchenko

Approved by the Resolution of Board of the National Bank of Ukraine of February 1, 2021 No. 12

Regulations on application of corrective actions by the National Bank of Ukraine in the sphere of state regulation of activities in the markets of non-bank financial services

I. General provisions

1. This Provision is developed according to the Laws of Ukraine "About the National Bank of Ukraine", "About financial services and state regulation of the markets of financial services" (further - the Financial services act), "About insurance", "About credit unions", "About advertizing", "About consumer crediting" (further - the Law on consumer crediting), “About financial mechanisms of stimulation of export activities” (further - the Law on the ESA), other legal acts of Ukraine and regulatory legal acts of the National Bank of Ukraine.

2. This Provision determines procedure and conditions of application by the National Bank of Ukraine (further - National Bank) corrective actions (sanctions) in the sphere of state regulation of activities in the markets of the non-bank financial services and actions provided by Items 1-7 of part eight of article 9 of the Law on the ESA (further - corrective actions) for violation of the laws and other regulatory legal acts regulating activities for provision of non-bank financial services including requirements regarding compliance with law of Ukraine about advertizing in the sphere of financial services (concerning advertizing which is considered unfair advertizing) and requirements of the Law on the ESA (further - the legislation on financial services), violation of the law of Ukraine about consumer protection of financial services, including requirements for interaction with consumers in case of settlement of overdue debt (the requirement of rather ethical behavior) (further - the consumer protection law), violation of requirements concerning structure of property of the supplier of financial services, conditions of implementation of activities for provision of financial services which implementation requires the corresponding license (licensed conditions), committed:

1) participants of the market of non-bank financial services, supervision of which activities is exercised by National Bank (further - participants of the market of non-bank financial services):

non-bank financial institutions, including Export credit agency (further - EKA);

legal entities who are not financial institutions, but have the right to provide separate financial services (further - faces which are not financial institutions);

persons rendering intermediary services in the markets of financial services;

physical persons entrepreneurs who in the cases which are directly provided by the laws of Ukraine provide financial services;

permanent missions in form of branches of foreign insurance companies which obtained in accordance with the established procedure the license for implementation of insurance activity (further - branches of nonresident insurers);

2) non-bank financial groups, supervision on the consolidated basis of which is exercised by National Bank.

3. Requirements of this provision are not applied to the legal relationship connected with:

1) application of corrective actions by National Bank for violation by participants of the market of non-bank financial services of the foreign exchange legislation, the legislation regulating activities in the payment market, consumer protection laws in the payment market and also legislations in the sphere of prevention and counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction;

2) production on cases on administrative offenses and imposing of administrative punishments on officials of non-bank financial institutions, officials of branches of nonresident insurers, officials and legal entities which are not financial institutions, the officials and legal entities rendering intermediary services in the markets of financial services, physical persons entrepreneurs which provide financial and intermediary services in the markets of non-bank financial services.

4. Features of application by National Bank of corrective action in the form of discharge of management from management of financial institution and appointment of temporary administration are regulated by the Financial services act and the regulatory legal act of National Bank.

5. The terms used in this Provision are used in such values:

1) the document in which violations or the specified signs of implementation of risk activities are fixed, - the document constituted by results of inspection check, permanent supervision / hearing of cases about violation of the rights of consumers of financial services, supervision of compliance with law of Ukraine About consumer protection of financial services and control of compliance with law of Ukraine About advertizing of financial services or by results of control of observance of requirements concerning structure of property of the supplier of financial services, conditions of implementation of activities for provision of financial services including activities of EKA which implementation requires the corresponding license (licensed conditions) (further - the document in which violations are fixed);

2) the license - license for activities on provision of financial services, including the license for activities the EKA/license for trade in currency values granted by National Bank (except the banking license), or the license for implementation of economic activity on provision of financial services (except professional activity in the security market) granted by National Bank, State commission on regulation of the markets of financial services of Ukraine or the National commission performing state regulation in the sphere of the markets of financial services;

3) the actions plan for violation elimination - the document which is constituted by the participant of the market of non-bank financial services and contains terms of accomplishment and the list of measures which such participant for elimination of violations and/or elimination of the reasons promoting making of violations of the law of Ukraine shall accept;

4) systematic violation of the law of Ukraine - making by the participant of the market of non-bank financial services / non-bank financial group of two or more violations of the same regulation of the legislation on financial services / consumer protection laws (further - similar violation), within year after application to such participant (group) of corrective action for similar violation;

5) the continuing violation - violation in case of which the participant of the market of non-bank financial services / the non-bank financial group after making of violation does not stop to perform it or did not accept measures for violation elimination;

6) authorized officer of National Bank - The chairman of National Bank, vice-chairmen of National Bank, heads of structural divisions of National Bank to whose functions implementation of supervision of activities in the markets of non-bank financial services belongs (further - structural divisions of supervision), the head of the structural unit of National Bank to which functions implementation of licensing of non-bank financial institutions and other faces which are not financial institutions belongs, but have the right to provide separate financial services (further - structural division on licensing), the head of the structural unit of National Bank to which functions supervision of compliance with law of Ukraine about consumer protection of financial services and about advertizing in the sphere of financial services belongs (further - structural division on consumer protection), deputy managers of structural divisions on supervision, the deputy manager of structural division on licensing, the deputy manager of structural division on consumer protection, heads of managements as a part of structural divisions on supervision, heads of managements as a part of structural divisions on licensing or persons fulfilling them duties;

7) organization - the collection company - the non-bank financial organization which according to the laws of Ukraine has the right to provide means in loan, including on the terms of financial loan and/or service of factoring, included in the register of the collection companies which for the benefit of the loan provider (the initial creditor) and/or the new creditor (in case of replacement of the initial creditor) according to the contract with such creditor and/or the new creditor has the right to perform settlement of overdue debt;

8) organization loan provider - the non-bank financial organization which according to the laws of Ukraine has the right to grant consumer loans;

9) organization - the new creditor - non-bank financial institution which in the procedure established by the legislation of Ukraine acquired under the civil agreement or on other bases of replacement of the creditor in the obligation right to claim under the agreement on consumer loan or other agreements provided by part two of article 3 of the Law on consumer crediting.

Other terms used in this Provision are used in the values determined in the Laws of Ukraine "About the National Bank of Ukraine", "About insurance", "About credit unions", the Law on EKA, the Financial services actthe Law on consumer crediting and other regulatory legal acts.

II. The corrective actions applied by National Bank

6. The National Bank during decision making about application of corrective actions in case of violation of the law about financial services / consumer protection laws within the powers applies to:

1) to insurers (except EKA) - the corrective actions provided by Items 1 - 7-1 parts one of Article 40 of the Financial services act, including the penalties established by part one of Article 41 of the Financial services act and also the penalties established by part two of Article 41-1 of the Financial services act;

1-1) credit unions - the corrective actions provided by Items 1, of 2, 5 parts one of article 28 of the Law on consumer crediting (in case of making of the violations provided by this Article), Items 1 - 7-1 parts one of Article 40 of the Financial services act, including the penalties established by part one of Article 41 of the Financial services act and also the penalties established by part two of Article 41-1 of the Financial services act;

2) to non-bank financial institutions, others, than the insurers EKA, credit unions, organizations creditors, organizations - new creditors, the organizations - the collection companies, - the corrective actions provided by Items 1 - 4, 7, 7-1 parts one of Article 40 of the Financial services act, including the penalties established by part one of Article 41 of the Financial services act and also the penalties established by part two of Article 41-1 of the Financial services act;

3) to non-bank financial groups - corrective action, stipulated in Item 8 parts one of Article 40 of the Financial services act;

4) to faces which are not financial institutions, - the corrective actions determined by Items 1, of 3, of 4, of 7, of 7-1 part one of Article 40 of the Financial services act including the penalties established by part one of Article 41 of the Financial services act and also the penalties established by part two of Article 41-1 of the Financial services act;

5) to persons rendering intermediary services in the markets of financial services - the corrective actions determined by Items 1, 3 parts one of Article 40 of the Financial services act including the penalties established by part one of Article 41 of the Financial services act and also the penalties established by Article 41-1 part two - the Financial services act;

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