Publication date: 29.05.2024
I am studying in the third year of the State University of Economics and Technology.I specialize in contractual, economic and corporate law, in particular, I provide consultations and write articles.
Derivatives are financial instruments whose value is determined based on the value of another asset, called the underlying asset or basis. The basic idea behind derivatives is that their price is derived from the performance of the underlying asset, such as share price, interest rate, exchange rate, commodity price, etc. Derivative securities certify the right of the owner to demand from the issuer to purchase or sell the underlying assets or to realize them in a certain way, or to make a payment depending on the value of the underlying indicator.
Optional certificates:
Option certificates are one of the types of derivatives that give their owners the right, but not the obligation, to buy or sell a certain asset at a fixed price (strike price) on a certain date in the future. Option certificates can be issued by banks, investment companies or other financial institutions. Option certificates can be useful for investors both for hedging risks and for speculation in the market. However, before investing in option certificates, it is important to carefully assess the risks and understand the terms of the contract. Optional certificates can be issued only in electronic form. Circulation of certificates is carried out only after the registration of the report on the emission in the NCCPFR and the issuance of the corresponding certificate.
Stock warrants:
Stock warrants are a financial instrument that gives the owner the right, but not the obligation, to buy shares, bonds, stock warrants at a fixed price (strike price) on a certain date in the future.Stock warrants are traded on an exchange and can be useful tools for investors who want to protect their positions in the stock market or profit from price fluctuations. However, it is important to carefully understand the risks and potential income associated with using options. In turn, redemption of stock warrants can be carried out by transferring ownership of securities (shares, bonds) of the issuer, or by paying their value. Stock warrants can exist exclusively in electronic form. Circulation of stock warrants, as in the case of option certificates, is carried out only after the registration of the report on the issue in the NKCPFR and the issuance of a corresponding certificate.
Credit notes:
A debt note is an emission derivative security. It is a financial instrument that certifies the issuer's obligation to pay interest income to the owner of the credit note in a specified amount and within a specified period. Credit notes may be issued by financial institutions such as banks or finance companies. A credit note may contain different payment terms. For example, it may guarantee the payment of a fixed interest income over a certain period or the payment of a certain amount in the event of default by the issuer (such as a company or country). In the event that a certain event occurs that is related to the solvency of the third party mentioned in the prospectus, the owner will lose the right to receive payments, and the issuer, in turn, is obligated to redeem the credit note at that price. which is defined by the prospectus. Such events can include: bankruptcy of a third party, a financial restructuring procedure, non-payment or late payment by a third party of mandatory payments under a contractual obligation (loan, credit, etc.). Credit notes are created only in electronic form.
Depository receipts:
A depository receipt is a registered derivative security. This means that it is issued to a specific owner who has the right to own or trade it. This security certifies the owner's right to receive a depositary receipt of the income that the issuer will receive for a certain number of securities of a foreign issuer. The holder of the depository receipt does not have direct ownership of these shares, but has the right to their value and other benefits related to them. In this case, a foreign issuer's securities that provide the same rights to their owner under such securities will serve as the basic act. the issuer itself is limited in the right to dispose of the underlying asset during the term of circulation of the depository receipt.
State derivative:
A government derivative is a financial instrument issued by the state (in this case, Ukraine) on international capital markets. This derivative security confirms the obligation of Ukraine, in accordance with the conditions of its placement, to make payments to the owner of this security in the event of the achievement of certain indicators of the gross domestic product (GDP) of Ukraine, as well as other payments. This type of financial instrument can have various purposes, including attracting financial resources to finance development or infrastructure projects, as well as reducing risk for investors by linking payments to economic indicators.
Lawyer consultation in the issue of securities:
Since the emission procedure includes a fairly large number of legal subtleties, the lawyer services are extremely important in this process. The lawyer will determine the necessary securities, conduct a legal analysis of the situation and the requirements of the legislation, and help in submitting the issue to the NKCPFR. A lawyer help will ensure compliance of each step in the securities issuance process with the requirements of current legislation.
