Legislative news digest: LEGAL HOTLINE 16.05.2019

National Bank of Ukraine releases security market participants from the requirement to obtain exchange transaction licenses

Resolution of the Board of National Bank of Ukraine (hereinafter “NBU”) dated May 7, 2019 No. 65 “On Approval of Amendments to the Regulations on the Procedure for Issuing Exchange Transaction Licenses to Non-Banking Financial Institutions, Postal Operators” (hereinafter the “Resolution”) stated that the security market participants trading in securities and providing payments settlement under the contracts are no longer obliged to obtain exchange transaction licenses from the Regulator. This applies in particular to the cases of securities ownership transfer from a resident to a non-resident and vice versa.

Purchase and sale of securities are not exchange transactions and all settlements will be conducted through banks which have banking licenses and exercise foreign exchange supervision, in particular over transactions of security market participants among others. Therefore, NBU cancelled the necessity for security market participants to obtain exchange transaction licenses, and revoked licenses previously issued to security market participants and to PJSC National Depository of Ukraine.

The Resolution came into force on May 9, 2019.

National Bank of Ukraine raises limit for dividend repatriation

National Bank of Ukraine (hereinafter “NBU”) raised the limit for dividend repatriation from 7 million Euro to 12 million Euro per month. This easement will not be critical to preserving macrofinancial stability, meanwhile it will contribute to improvement of the investment climate.

Relative amendments for raising the dividend repatriation limit were approved by Resolution of Board of National Bank of Ukraine No. 66 dated May 7, 2019 “On Introduction of Amendments to Regulation on Safeguard Measures and Definition of Procedure for Certain Transactions in Foreign Currency”.

The Resolution came into force on May 8, 2019.

New procedure of settlements under life insurance policy is established

Resolution of the National Commission for State Regulation of Financial Services Markets No 379 dated 19 March 2019 introduced amendments to Additional Requirements to Life Insurance Policies.

The document specifies that when the monetary obligations under life insurance policies are denominated in foreign currency the following amounts have to be stated in the same currency:

• Insurance coverage;
• Insurance payments (premiums);
• Insurance benefits;
• Surrender value.

The settlements are performed at the official rate of NBU at the date of insurance payment (premium payment) unless otherwise provided by the life insurance policy.

Essential points are defined when monetary obligations of the parties are denominated in settlement values differing from the national currency and from foreign currency.

Time limits for granting the address of a construction facility and of real property object were reduced

Resolution of the Cabinet of Ministers of Ukraine No. 367 dated March 27, 2019 “Certain Issues of Business Deregulation” which became effective on April 28, 2019, defines the procedure which allows obtaining the address of a construction facility and of the real property object within 5 days instead of 30 days as currently envisaged.

The resolution mentioned approved Temporary Procedure of Implementation of Experimental Project for attributing the addresses to the construction facility and real estate objects which comes into force on July 1, 2019.

From the validity date, attribution of addresses to the construction facilities and real property objects will be executed solely in accordance with the Temporary Procedure.

Supervisions over cash transactions to be strengthened

Resolution of the Board of National Bank of Ukraine (hereinafter “NBU”) No.62 dated April 18, 2019 introducing amendments to Instruction on Conduct of Cash Transactions by Banks in Ukraine, will come into force on June 3, 2019.

Strengthening the supervision over cash settlements and conduct of cash transactions by banks is caused by numerous facts of performing risky (schematic) transactions by financial institutions involving cash revealed by National Bank of Ukraine as a result of supervision in the sphere of financial monitoring.

The document envisages that employee of a bank (affiliate, branch) which is entitled to sign cash documents, is obliged to apply qualified electronic seal.

It also envisages the possibilities for the bank to use a qualified electronic seal or an advanced electronic seal.