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LAW OF UKRAINE

of December 28, 2014 No. 78-VIII

About the measures directed to assistance of capitalization and restructuring of banks

(as amended on 24-12-2015)

This Law is directed to protection of economic safety of the state, the rights, freedoms and legitimate interests of citizens, creation of conditions for ensuring stable activities of banks of Ukraine, strengthening of financial capability of bank system of Ukraine and minimization of negative impact of difficult economic situation, in particular, owing to temporary occupation of the territory Ukraine and conducting anti-terrorist operation.

Article 1

1. The bank which by results of the diagnostic examination conducted at own expense with attraction of one of the auditing firms determined by the National Bank of Ukraine upon the demand of the National Bank of Ukraine by the technique determined by the National Bank of Ukraine needs additional capitalization (further - bank) shall perform capitalization of bank and/or restructuring, reorganization of bank for the purpose of ensuring compliance with indicator of capital adequacy of the first level by bank in the amount of at least 7 percent taking into account need of observance of the standard rate of sufficiency (adequacy) of the regulatory capital in the amount of at least 10 percent and indicator of capital adequacy of the first level in the amount of at least 4,5 of percent calculated according to basic and pessimistic macroeconomic scenarios respectively for 2014-2016. Capitalization and/or restructuring, reorganization of bank shall be carried out in time, determined by the National Bank of Ukraine taking into account the features established by this Law.

2. The bank in time established by the National Bank of Ukraine and according to its requirements shall submit for approval to the National Bank of Ukraine the program of capitalization of bank or the restructuring plan of bank.

3. If the bank did not provide the program the capitalization/restructuring plan of bank which meets the requirements of the National Bank of Ukraine, or members of bank are not capable to provide the capitalization level provided by part one of this Article, the National Bank of Ukraine makes the decision about:

1) provision to the Cabinet of Ministers of Ukraine offers on ensuring capitalization of bank by the state; or

2) reference of bank to category insolvent using the procedures provided by the Law of Ukraine "About system of guaranteeing household deposits" taking into account features, established by Articles 2, 5 and 7 these Laws; or

3) reference of bank to category insolvent using the procedures provided by the Law of Ukraine "About system of guaranteeing household deposits".

The offer on ensuring capitalization of bank by the state can be provided by the National Bank of Ukraine only on bank which corresponds to the criteria and conditions approved by Expert and analytical council on questions of participation of the state in the authorized capital of banks formed by the Cabinet of Ministers of Ukraine (further - criteria of participation of the state). Capitalization of bank is provided with the state taking into account requirements of this Law.

Article 2

1. Capitalization, reorganization of bank is performed according to the simplified procedure which provides that:

1) the message on holding general meeting of members of bank for decision making, necessary for carrying out capitalization, including about increase or reduction of the authorized capital of bank, reorganization of bank according to this Law, is published in official publication according to requirements of the legislation of Ukraine about joint-stock companies at least in five working days prior to date of general meeting;

2) members of bank and investors who intend to acquire/increase essential participation in bank are exempted from obligation previously to notify the National Bank of Ukraine on the intentions;

3) members of bank are granted the privilege to share acquisition of additional issue;

4) agreements with members of bank and investors on purchase and sale of shares consist till two working days after acceptance by general meeting of members of bank of the decision on increase or reduction of the authorized capital of bank. Participants and investors shall perform complete payment of shares in accordance with the terms of placement till five working days from the date of the conclusion of sale and purchase agreements of shares. Participants and investors shall conform to requirements of the National Bank of Ukraine of rather faultless goodwill;

5) date of filing of application, the decision on capitalization of bank, including on increase or reduction of the authorized capital of bank, changes in the charter of bank and the charter of bank legal successor, the prospectus of the issue in the National commission on securities and the stock market is considered registration date of share issue and the prospectus of the issue;

6) date of giving of changes in the charter of bank, the charter of bank legal successor on coordination to the National Bank of Ukraine and on registration to the state registrar is considered respectively a date of their coordination by the National Bank of Ukraine and registration date the state registrar;

7) date of submission of documents for registration of share issue of bank in the National commission on securities and the stock market is considered registration date of the report on securities placement;

8) The Antimonopoly Committee of Ukraine draws the conclusion and/or permission to concentration no later than two working days from the date of submission of the relevant documents by bank;

9) the National Bank of Ukraine approves candidacies of heads of bank in which capitalization the state, no later than two working days from the date of submission by the Ministry of Finance of Ukraine of the relevant documents meeting the requirements of the National Bank of Ukraine takes part;

10) cannot be the Head of bank which is capitalized/will be reorganized with participation of the state:

a) person holding executive position in this bank within one year before decision making about capitalization/reorganization;

b) person holding position in governing bodies of other banks within one year before introduction in them temporary administration and/or liquidation of bank (the specified requirement is effective within the next three years from the date of approach of event) and does not conform to other requirements of faultless goodwill according to the legislation;

11) the National Bank of Ukraine provides preliminary permission and approves the plan of reorganization of bank for the decision of owners no later than two working days from the date of representation by bank of the relevant documents meeting the requirements of the National Bank of Ukraine;

12) the National Bank of Ukraine makes the decision on the provision of the banking license, the general license for implementation of currency transactions of bank created as a result of merge on condition of compliance to its requirements of the National Bank of Ukraine, within two weeks from the date of giving by bank of the relevant documents meeting the requirements of the National Bank of Ukraine;

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