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LAW OF UKRAINE

of October 30, 1996 No. 448/96-BP

About state regulation of the capital markets and the organized goods markets

(as amended on 30-06-2021)

This Law determines the legal basis of implementation of state regulation of the capital markets and the organized goods markets and the state control of issue (issue) and turnover, the conclusion and accomplishment of financial instruments in Ukraine.

Article 1. Determination of terms

For the purposes of this Law the stated below terms are used in the following value:

state regulation of the capital markets and the organized goods markets - implementation by the state on behalf of the National commission on securities and the stock market of complex actions for streamlining, control, supervision of the capital markets, regulation of rules of functioning of the organized goods markets and implementation of clearing activities concerning the transactions made in such markets and also actions for prevention and counteraction to abuses and violations in the capital markets and the organized goods markets;

derivative securities - securities, the mechanism of release and which addresses it is connected with the right to acquisition or sale during the term determined by the agreement (contract), securities, other financial and/or commodity resources;

professional participants of the security market - persons who perform professional activity in the security market;

determination of credit rating (rating) is the activities for rendering professional services in the security market directed to determination of creditworthness of subject to rating which can be carried out by rating agency;

the credit rating is conditional expression of creditworthness of subject to rating in general and/or its separate debt obligation on national scale of credit ratings;

the national rating scale (further - the National scale) the scale divided into certain groups of levels and levels each of which characterizes the borrower's capability timely and in full to pay interests and the main amount on the debt obligations, and also its solvency. The national scale is used for assessment of credit risk of the borrower - local government body, the subject of managing and separate debt instruments - bonds, mortgage securities, loans;

rating assessment of the issuer - characterizes the level of capability of the issuer of securities timely and in full to pay interests and the main amount on debt obligations of rather debt obligations of other borrowers;

rating securities valuation of the issuer - characterizes the level of capability of the borrower (issuer) timely and in full to serve obligations on securities;

corporate management - system of the relations which determines rules and procedures of decision making concerning activities of economic society and control, and also distribution of the rights and obligations between bodies of society and its participants concerning management of society;

system of depositary accounting of securities - set of records about securities (type, nominal cost and quantity, nature of the registered restrictions in the address or realization of the rights on securities), their issuers, owners of the personalized securities authorized by them persons, managers, pawnbrokers, other persons given the appropriate rights concerning the securities containing information which gives the chance to identify the called persons, and also other stipulated by the legislation information;

system of the register of owners of personalized securities (system of the register) - the data set providing identification of the owners registered in this system, nominee holders and the issuer and also the personalized securities registered on their name, accounting of all changes of information of rather above-stated persons and securities, obtaining and provision of information to these persons and creation of the register of owners of personalized securities.

The terms "the administrator on bond issue", "asset admitted to trading in the organized market", "derivative contract", "meeting of bondholders", "investor in financial instruments", "operator of the organized market", "person responsible for holding meeting of bondholders", "person performing managerial functions", "official channel of communication", "securities prospectus", "professional participant of the capital markets", "professional participant of the organized goods markets", "capital markets", "systemically important professional participant of the capital markets and organized goods markets", "members of the capital markets", "financial instruments" are used in this Law in the value given in the Law of Ukraine "About the capital markets and the organized goods markets".

The terms "nominee holder", "system of depositary accounting" are used in this Law in the value given in the Law of Ukraine "About depositary system of Ukraine".

The term "consumer of financial services" is used in this Law in the value given in the Law of Ukraine "About financial services and state regulation of the markets of financial services

The terms "subjects of system of accumulative provision of pensions", "investors", "participants" are used in the value given in article 3 of the Law of Ukraine "About obligatory national pension insurance".

Article 2. Purpose of state regulation of the capital markets and organized goods markets

State regulation of the capital markets and the organized goods markets is performed on purpose:

realization of single state policy in the sphere of issue (issue) and security circulation, the conclusion and execution of derivative contracts, transactions concerning other financial instruments, and also the organization of activities of professional participants of the organized goods markets;

creations of conditions for effective mobilization and placement by members of the capital markets of financial resources taking into account interests of society;

ensuring transparency of functioning of the capital markets, their participants and organized goods markets;

providing equal opportunities for access for persons having intention to perform professional activity in the capital markets and the organized goods markets, issuers and investors to the capital markets and the organized goods markets;

guaranteeing property rights to securities; protection of the rights of members of the capital markets (including consumers of financial services) rather financial services which are provided by persons who perform professional activity in the capital market; integration into the European and world capital markets;

observance by members of the capital markets and organized goods markets of requirements of acts of the legislation;

prevention of monopolization and creation of conditions of development of fair competition in the capital markets and the organized goods markets;

control of transparency and openness of the security market.

Article 3. Forms of state regulation of the capital markets and organized goods markets

State regulation of the capital markets and the organized goods markets is performed in cases and in the limits set by the law in the following forms:

adoption of acts of the legislation concerning activities of members of the capital markets and the organized goods markets;

supervision implementation, implementation of regulation and control on realization of the rights and accomplishment of obligations by members of the capital markets and the organized goods markets;

regulation of issue (issue), the address, redemption and the securities redemption, the conclusion and execution of derivative contracts and making and execution of transactions concerning other financial instruments;

issue of licenses for implementation of the corresponding type of activity within professional activity in the capital markets and the organized goods markets, and also ensuring control of such activities;

prohibition of implementation of professional activity in the capital markets and the organized goods markets in case of lack of the license for the related activity or suspension of such activities for certain term (up to one year) according to the legislation, and also accountability for abuse of regulations of implementation of such activities according to the law;

registration of issues of securities, reports on results of issue of securities and approval of securities prospectuses;

control of observance by issuers of order of registration of issue of securities, report on results of issue of securities and approval of the securities prospectus;

creation of system of protection of the rights of investors in financial instruments and control of observance of these rights by the issuers of securities and persons performing professional activity in the capital markets;

control of reliability and completeness of disclosure of information by the issuers and persons performing professional activity in the capital markets and the organized goods markets;

establishment of rules and standards of implementation of transactions in the capital markets and the organized goods markets, and also control of observance of such rules and standards;

prudential supervision of professional participants of the capital markets and the organized goods markets within the activities performed by such participants based on the issued National commission on securities and the stock market of the license;

registration of specifications of derivative contracts which are signed in the organized market of derivative contracts;

control of activities of persons performing the activities connected with the capital markets and the organized goods markets;

holding other actions according to the law.

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