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Ministry of Justice of Ukraine

April 19, 2021

No. 532/36154

DECISION OF THE NATIONAL COMMISSION ON SECURITIES AND STOCK MARKET OF UKRAINE

of March 11, 2021 No. 176

About approval of the Regulations on implementation of financial monitoring by subjects of primary financial monitoring, state regulation and supervision of whose activities is exercised by the National commission on securities and the stock market,

According to Item 13 of article 8 of the Law of Ukraine "About state regulation of the security market in Ukraine" and to Item 8 of the Section X "Final and transitional provisions" of the Law of Ukraine "About 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" the National commission on securities and the stock market RESHILA:

1. Approve Regulations on implementation of financial monitoring by subjects of primary financial monitoring, state regulation and supervision of whose activities is exercised by the National commission on securities and the stock market which is applied.

2. Declare invalid the decision of the National commission on securities and the stock market of March 17, 2016 No. 309 "About approval of the Regulations on implementation of financial monitoring by professional participants of the security market", registered in the Ministry of Justice of Ukraine on April 13, 2016 for No. 551/28681 (with changes).

3. To department of financial monitoring and conducting inspections () provide Misyur A.:

submission of this decision on state registration in the Ministry of Justice of Ukraine;

promulgation of this decision on the official website of the National commission on securities and the stock market.

4. This decision becomes effective from the date of its official publication.

5. To subjects of primary financial monitoring, state regulation and supervision of which activities is exercised by the National commission on securities and the stock market, to bring internal documents into accord with Regulations on implementation of financial monitoring by subjects of primary financial monitoring, state regulation and supervision of whose activities is exercised by the National commission on the securities and the stock market approved by this decision within two months after its introduction in force.

6. Control over the implementation of this decision to assign to the member of the National commission on securities and the stock market I. Nazarchuk.

Commission chairman

R. Magomedov

 

It is approved:

Chairman of Public service of financial monitoring of Ukraine

 

I.Cherkassky

Acting as Chairman of the National Bank of Ukraine

Yu.Gelety

Deputy minister of digital transformation of Ukraine

A. Bornyakov

Approved by the Decision of the National commission on securities and the stock market of Ukraine of March 11, 2021 No. 176

Regulations on implementation of financial monitoring by subjects of primary financial monitoring, state regulation and supervision of whose activities is exercised by the National commission on securities and the stock market,

I. General provisions

1. This Provision establishes general requirements of the National commission on securities and the stock market on the organization and carrying out primary financial monitoring by commodity and other exchanges which perform financial operations with goods; organizations of accumulative provision of pensions; managers of funds of financing of constructions/funds of real estate transactions; professional participants of the stock market (except banks), including Central Securities Depository (further - subjects of primary financial monitoring).

Action of this Provision extends to subjects of primary financial monitoring and their separate divisions.

Action of this provision does not extend to banks/branches of foreign banks which perform professional activity in the security market (stock market).

2. The company on asset management performs primary financial monitoring concerning non-state pension funds and corporate funds which are her clients.

3. In non-state pension funds the organization and carrying out primary financial monitoring about activities for administration is performed by the administrator of non-state pension fund with whom the contract for administration of non-state pension fund is signed.

4. The terms used in this Provision are applied in the values determined by the Law of Ukraine "About 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" (further - the Law), the resolution of Board of the National Bank of Ukraine of March 17, 2020 No. 32 "About approval of the Regulations on the BankID System of the National Bank of Ukraine".

5. This Provision establishes general requirements in the relation:

1) appointments of the worker responsible for carrying out financial monitoring (further - the ranking officer);

2) rules of financial monitoring and program of its implementation;

3) training of personnel (workers) of the subject of primary financial monitoring on identification of the financial transactions which are subject to financial monitoring;

4) implementation of proper check of clients (representatives of clients);

5) features and reliable sources for implementation of proper check;

6) ensuring identification of the financial transactions which are subject to financial monitoring;

7) risk managements;

8) procedure for freezing of the assets connected with terrorism and its financing, distribution of weapons of mass destruction and its financing;

9) procedure for suspension and renewal of implementation of financial transactions by subjects of primary financial monitoring;

10) carrying out internal checks of activities of the subject of primary financial monitoring regarding compliance with law 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;

11) procedure for representation on request of NKTsBFR of information and/or documents (the conclusions, decisions), copies of documents or statements from documents;

12) procedures of application of adequate measures concerning the states (jurisdictions) which do not carry out or implement inadequate image recommendations of the international, intergovernmental organizations involved in the sphere of fight against legalization (washing) of income gained in the criminal way, either financing of terrorism or financing of distribution of weapons of mass destruction;

13) establishments of business relations with the client without its physical presence (remote establishment of business relations);

14) features of implementation of proper check by the third parties.

6. The state control and supervision of observance by subjects of primary financial monitoring of requirements of this provision is exercised by NKTsBFR within powers in the procedure established by the legislation.

II. Proper organization and carrying out primary financial monitoring

1. The subject of primary financial monitoring shall provide the proper organization and carrying out primary financial monitoring.

The subject of primary financial monitoring for the purpose of the proper organization and carrying out primary financial monitoring takes, in particular, the following measures:

1) appoints the ranking officer according to requirements of the legislation of Ukraine 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 at the level of management of the subject of primary financial monitoring;

2) is provided by functioning of risk management system of legalization (washing) of income gained in the criminal way, financings of terrorism and/or financing of distribution of weapons of mass destruction;

Develops 3) and approves internal documents concerning financial monitoring in the amount necessary for effective functioning of internal system 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 and understanding by workers of the subject of primary financial monitoring of the obligations and powers in the sphere of prevention and counteraction;

4) provides sufficient resources for functioning of internal system 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;

5) the risk profile of the subject of primary financial monitoring risks of legalization (washing) of income gained in the criminal way, financings of terrorism and/or financing of distribution of weapons of mass destruction provides sufficient knowledge and awareness of management of the subject of primary financial monitoring concerning their obligations in the sphere of prevention and counteraction, and also about inherent;

6) the understanding provides with such workers of the responsibility for failure in duty and/or failure to act proper awareness and execution by employees of the subject of primary financial monitoring of the obligations determined by it in the sphere of prevention and counteraction;

Develops 7) and constantly enhances system of internal audit (control) concerning prevention and counteraction and/or involves independent auditors, including provides timely identification with internal audit (control) and/or substantive audit of problematic issues and signs of inadequate risk management system of legalization (washing) of income gained in the criminal way, financings of terrorism and/or financing of distribution of weapons of mass destruction;

8) provides on permanent basis holding training events for workers of the subject of primary financial monitoring and agents (their workers) for the purpose of understanding with them the obligations assigned to them and operations procedure;

9) provides verification of presence of faultless goodwill at all workers of the subject of primary financial monitoring involved to carrying out primary financial monitoring;

10) is provided timely and in full by fulfillment of duties of the subject of primary financial monitoring (in particular, identification of the financial transactions which are subject to financial monitoring, freezing of the assets connected with terrorism and its financing, distribution of weapons of mass destruction and its financing, impossibility of implementation of transactions by persons from the list of faces tied with implementation of terrorist activities);

11) is provided by timely identification of the financial transactions which are subject to financial monitoring and proper information exchange with specially authorized body;

Develops 12) and performs measures for proper check of the client for the purpose of understanding of essence of activities of the client, the purpose and the expected nature of business relations with it that allows to be sure that financial transactions of the client correspond to information on him which is available for the subject of primary financial monitoring, its business, risk profile, including, in case of need, sources of origin of its means / income, to establishment of the final beneficial owner for operational identification of unusual behavior and suspicious financial transactions (activities);

Properly documents 13) and fixes the events concerning fulfillment of duties of the subject of primary financial monitoring;

14) stores all documents, data, information (including the corresponding reports, orders, files) concerning fulfillment of duties of the subject of primary financial monitoring during the terms determined by the legislation of Ukraine;

15) timely and in full is provided on requests of the National commission on securities and the stock market necessary documents / by the information/explanation which are properly confirming accomplishment by the subject of primary financial monitoring of requirements of the legislation of Ukraine concerning prevention and counteraction;

16) takes measures for continuous improvement of internal system 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. The subject of primary financial monitoring can make the decision on independent carrying out by its separate divisions which are separate legal entities, registration of financial transactions and other information connected with carrying out financial transactions and submission of information on them to Gosfinmonitoring.

Such decision is drawn up by the administrative document of the subject of primary financial monitoring which is signed by the head of the subject of primary financial monitoring or person fulfilling its duties.

Separate divisions of the subject of primary financial monitoring which are separate legal entities and which subject of primary financial monitoring permission independent is provided to carry out registration of financial transactions and other information connected with carrying out financial transactions and to submit information connected with carrying out financial monitoring to Gosfinmonitoring, get registered in Gosfinmonitoring as subjects of primary financial monitoring according to the procedure, determined by the Cabinet of Ministers of Ukraine.

III. Appointment of the worker responsible for carrying out financial monitoring

1. For the purpose of ensuring proper carrying out primary financial monitoring subjects of primary financial monitoring appoint the worker responsible for carrying out financial monitoring.

2. The ranking officer heads and coordinates internal system 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 of the subject of primary financial monitoring.

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