Legal news for your attention:
The National Bank of Ukraine Eases Foreign Loans Registration
The National Bank has changed conditions for registration, amendment and de-registration of loan agreements with a foreign element. In particular, by Decision of the National Bank of Ukraine No. 83, dated 20 July, commencing from 17 August the authorized banks cease submitting paper-based documents for registering foreign loan agreements to the NBU, and instead automatically submit such information to the regulator by sending a relevant notification using special software. These changes are aimed at a more efficient and effective way of exchanging information with the regulator, which should improve customer service in banking.
New Rules and Terms for Bank Audits
The National Bank of Ukraine introduced new rules and terms for bank audits. From now on, auditors and audit firms engaged in mandatory annual audit of a bank’s financial performance will be selected by a bank through transparent tendering. Based on selection results, a decision to engage a particular audit company is adopted by the audit committee or the supervisory board of a bank, followed by an audit services agreement signed with such company. The agreement shall include: the subject, scope of audit services, size and procedure of payment, responsibilities of the parties, deadline for submitting audit report to the bank, and other terms and conditions as prescribed by Ukrainian legislation and the Standards. By 1 November of the reporting year each bank must submit a copy of signed agreement to the NBU, which may demand from the bank to amend the agreement in order to extend coverage of the financial audit. Special requirements for audit firms include continuous rotation of auditors involved in audit report preparation and setting a limit for banks to conclude agreement with the same audit firm to 7 consequent years. Upon financial audit, Independent Auditor’s Report is considered and approved by the General Meeting of Shareholders and submitted to the NBU no later than 30 April of the year following the reporting year. The Supervisory Board of a Bank, subject to availability of sufficient substantiated evidence of the audit firm violating audit legislation, may withhold such audit firm from the assignment and must submit to the NBU a copy of agreement with a new audit firm.
Extending List of Information Required for Disclosure by the Securities Issuers
To harmonize its regulatory acts with the new legislation, the National Securities and Stock Market Commission (hereinafter the “Commission”) has extended the list of special and interim information disclosed by the securities issuers. Also, the amount of information to be disclosed about general meetings has been changed. Relevant amendments to Provision on Disclosure of Information by Securities Issuers were introduced by Decision No. 243, dated 19 April, 2018, which came into force on 5 August, 2018. Now, securities issuer’s special information includes, in particular, information about: adopted decision on distribution of securities for the amount exceeding 25 % of the authorized capital (previously 10 %); availability, duration of and parties to the shareholders agreement; facts of inclusion /exclusion of securities to/from the stock exchange register, and so on. The issuers must also disclose interim information by placing it in the publicly accessible information database of the Commission, posting it on their own websites and submitting to the Commission, in particular, interim financial statements and the conclusion of interim financial statements review prepared by the auditor (audit firm). At the same time, such statements and the conclusion should be drawn up in accordance with International Standards on Auditing.
Insurance Companies Solvency Requirements have been Increased
In accordance with Decree of the National Financial Services Commission dated 7 July 2018 on approval of “Regulation on Mandatory Criteria and Standards for Capital Adequacy and Solvency, Liquidity, Profitability, Quality of Assets and Risk of Operations of the Insurer”, new rules and requirements are established, that will determine acceptable assets of insurance companies to be placed based on the safety, profitability, and liquidity principles. Also, solvency and capital adequacy standards are defined by such new rules. In particular, free assets of an insurance company engaged or planning to be engaged in insurance other than life insurance shall amount to at least UAH 30 million, and for an insurance company engaged or planning to be engaged in life insurance activities shall amount to at least UAH 45 million. The National Financial Services Commission set for insurance companies a two-year transitional period to bring their required solvency and capital adequacy into sync with new requirements.
Facilitated Import of Software Development Equipment
Import requirements for radio electronic devices (RED) and radiating devices have been changed on 5 August. The relevant Procedure for Importing from Abroad and Selling in Ukraine of Radio Electronic Devices and Radiating Devices was approved by Decision of the National Commission on State Regulation in the Field of Communication and Informatization No. 78 dated 13 February 2018. The amendments promise much simpler import to Ukraine of personal computers and other electrical home appliances containing RED (including testing and development equipment and accessories) to undertake special studies in Ukraine (medical, scientific tests, software development, etc.). Import of such products will not require declaration of compliance with the requirements of the Technical Regulations of Radio Equipment and/or registration of relevant information about RED with the General Register of RED.