Publication date: 08.07.2024
Legal regulation of the securities market in Ukraine
Introduction
The securities market is an integral part of the financial system of any country. It ensures the efficient redistribution of financial resources, helps to attract investments and increase economic activity. In Ukraine, the legal regulation of the securities market is of great importance for ensuring stability, transparency and fairness in this area.
Key regulations
The legal regulation of the securities market in Ukraine is based on a number of regulations, including the following key ones:
TheLaw of Ukraine "On Securities and Stock Market". This law establishes the legal framework for the issuance, circulation and redemption of securities, and defines the rights and obligations of securities market participants.
Law of Ukraine "On State Regulation of the Securities Market in Ukraine". The Law defines the legal framework for the activities of state bodies that regulate and supervise the securities market.
TheLaw of Ukraine "On Joint Stock Companies". This law regulates the activities of joint-stock companies, the procedure for their establishment, operation and liquidation, and the rights and obligations of shareholders.
TheLaw of Ukraine "On Joint Investment Institutions (Mutual and Corporate Investment Funds)". The Law regulates the activities of collective investment institutions and sets requirements for their establishment and operation.
TheLaw of Ukraine "On Licensing of Economic Activities". Defines the procedure for licensing the activities of professional securities market participants.
State regulatory authorities
The main state authorities that regulate and supervise the securities market in Ukraine are:
TheNational Securities and Stock Market Commission (NSSMC). It is a central executive body with a special status that carries out state regulation and supervision of the securities market. The main functions of the NSSMC include:
- Development of regulations governing securities market activities.
- Licensing of professional securities market participants.
- Supervision of compliance with the securities market legislation.
- Protection of investors' rights.
- Detecting and investigating violations of the securities market legislation.
National Bank of Ukraine (NBU). The NBU supervises the activities of banking institutions in the securities market and regulates monetary policy that affects the functioning of the securities market.
Main types of securities
Various types of securities are traded in the Ukrainian securities market, each of which has its own characteristics and is regulated by the relevant regulations. The main types of securities include:
Shares. These are securities that confirm their holder's participation in the authorized capital of a joint-stock company, entitle them to receive a share of profits in the form of dividends and participate in the company's management.
Bonds. These are securities that certify the issuer's obligation to repay the bondholder the nominal value of the bond within a specified period of time and pay interest.
Investment certificates. These are securities issued by collective investment institutions that certify the right of their holder to a share in the fund's assets.
Options and futures. These are derivatives that give their holders the right or obligation to buy or sell an underlying asset under specified conditions in the future.
Licensing of professional securities market participants
To carry out professional activities in the Ukrainian securities market, it is necessary to obtain a license. Professional participants of the securities market are:
Brokers. They carry out intermediary activities on the purchase and sale of securities on behalf of clients.
Dealers. They buy and sell securities on their own behalf and at their own expense for profit.
Depositories. They keep records of securities ownership and service transactions with them.
Registrars. They maintain a register of registered securities owners.
Management companies. Manage the assets of collective investment institutions.
Disclosure of information in the securities market
Information disclosure is an important element of legal regulation of the securities market, as it ensures transparency and investor confidence. In Ukraine, disclosure requirements are set out in the Securities and Stock Market Law and other regulations. The main disclosure requirements include:
Regular disclosure of information. Issuers of securities are required to regularly disclose information about their business, financial condition, results of operations and other important events.
Special information. Issuers must immediately disclose information about events that may affect the value of securities or investors' decisions, including changes in management, significant transactions, dividend payments, etc.
Financial statements. Issuers are required to provide financial statements that must be confirmed by an independent auditor.
Information on owners of significant shareholdings. Issuers must disclose information on the owners of shareholdings exceeding a certain threshold established by law.
Protection of investors' rights
Protection of investors' rights is one of the main objectives of legal regulation of the securities market. Ukrainian legislation provides for a number of mechanisms to protect investors' rights:
Theright to receive information. Investors have the right to receive timely and complete information about the activities of issuers and the status of their investments.
Theright to participate in management. Shareholders have the right to participate in general meetings of shareholders and to make decisions on key issues of the company's activities.
Theright to dividends. Shareholders have the right to receive a share of the company's profits in the form of dividends.
Theright to protection against unfair practices. Investors have the right to protection against fraud, market manipulation and other unfair practices by issuers and other securities market participants.
Sanctions for violations of securities market legislation
Administrative, civil and criminal sanctions are provided for violations of securities market legislation. The main types of violations and liability include:
Violation ofdisclosure requirements. Fines and other administrative sanctions may be imposed for this violation.
Market manipulation. This violation may result in fines and criminal liability.
Securities fraud. Securities fraud is subject to criminal liability, including imprisonment.
Failure to complywith license terms. Violation of license conditions may result in license revocation and a ban on operations.
Conclusion.
Legal regulation of the securities market in Ukraine is an important tool for ensuring its stable and efficient functioning. It includes the legal framework, activities of state regulatory authorities, licensing of professional participants, information disclosure requirements and investor protection mechanisms. Compliance with the securities market legislation contributes to the development of the country's financial system, attracting investments and increasing investor confidence.
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