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DECISION OF THE NATIONAL COMMISSION ON SECURITIES AND STOCK MARKET OF UKRAINE

of February 21, 2024 No. 208

About approval of Licensed conditions of implementation of professional activity in the markets of the capital activities on trade in financial instruments

According to Item 13 parts one of article 8 of the Law of Ukraine "About state regulation of the capital markets and the organized goods markets", for the purpose of reduction of the regulatory legal act in compliance with requirements of the legislation the National commission on securities and the stock market SOLVED:

1. Approve Licensed conditions of implementation of professional activity in the markets of the capital activities on trade in financial instruments which are applied.

2. Declare invalid the decision of the National commission on securities and the stock market of May 14, 2013 No. 819 "About approval of Licensed conditions of implementation of professional activity in the stock market (security market) - activities for the securities trading" it is registered in the Ministry of Justice of Ukraine on June 01, 2013 No. 857/23389.

3. Investment companies shall:

bring structure of property into accord with requirements of licensed conditions of implementation of professional activity in the markets of the capital activities on trade in financial instruments approved by Item 1 of this decision, within twelve months from the date of, the entry into force of this decision following later and if in structure of property of such person there is foreign legal person(s) and/or physical person(s) - the foreigner(s), or corporate investment fund which is the owner of share (shares) in the authorized capital of the company on asset management which based on the relevant agreement exercises Asset management of such fund - within eighteen months;

file to NKTsBFR official channel of communication documents and information according to requirements of subitems 3-14, 18-20 of Item 1 of the Section III of licensed conditions of implementation of professional activity in the capital markets - activities for trade in financial instruments, approved by Item 1 of this decision, no later than the last number of the twelfth month from the date of following later entries into force of this decision and if in structure of property of such person there is foreign legal person(s) and/or physical person(s) - the foreigner(s), or corporate investment fund who is the owner of share (shares) in the authorized capital of the company on asset management which based on the relevant agreement exercises Asset management of it fund and such structure required reduction in compliance with licensed conditions of implementation of professional activity in the capital markets - activities for trade in financial instruments, approved by Item 1 of this decision, - no later than the last number of the eighteenth month. These documents and information move with the cover letter in which the list of documents and information which are applied is specified.

4. Requirements of Licensed conditions of implementation of professional activity in the capital markets - activities for trade in financial instruments, approved by Item 1 of this decision, rather seed capital are applied only to legal entities who intend to perform activities for trade in financial instruments and submitted to NKTsBFR the application and the relevant documents for receipt of the license.

5. To department of methodology of regulation of professional participants of the security market (Kozlovskaya I.) provide:

submission of this decision on state registration in the Ministry of Justice of Ukraine;

promulgation of this decision on the official website of the National commission on securities and the stock market.

6. This decision becomes effective from the date of its official publication.

7. Control of execution of this decision to assign to the member of the National commission on securities and the stock market of Shlyakhova Ya.

 

It is approved: First Deputy Minister of digital transformation of Ukraine

O. Viskub

Chairman of the Antimonopoly Committee of Ukraine

P. Kirilenko

Chairman of Public service of financial monitoring of Ukraine

I. Cherkassky

Approved by the Decision of the National commission on securities and the stock market of Ukraine of February 21, 2024 No. 208

Licensed conditions of implementation of professional activity in the capital markets - activities for trade in financial instruments

I. General provisions

1. These Licensed conditions establish the requirements obligatory for execution in case of receipt of the license for implementation of professional activity in the markets of the capital activities on trade in financial instruments (further - the license) by its separate types and when implementing these types of activity in the capital markets, the list of documents which are filed by the applicant for licensing, feature of combination of types of activity on trade in financial instruments among themselves and with other types of activity, including professional activity in the capital markets and the organized goods markets, and during implementation of professional activity on trade in financial instruments.

2. These Licensed conditions establish requirements for receipt of the license and implementation of activities for trade in financial instruments by its following types:

subbroker activities;

broker activities;

dealer activities;

activities for portfolio management of financial instruments;

investment consulting;

underwriting and/or activities for placement with provision of a guarantee;

activities for placement without provision of a guarantee.

3. In these Licensed conditions terms are used in the following values:

the separate division of the applicant / лицензиата-филиал, other division of the legal entity located out of its location is not included into internal organizational structure and performs everything or part of its functions on implementation of activities for trade in financial instruments and/or other professional activity in the capital markets and the organized goods markets (in case of combination of activities for trade in financial instruments to other types of professional activity in the capital markets and the organized goods markets);

providing going concern - availability at the applicant/licensee of the reserve information and communication systems or other effective remedies providing implementation of its professional activity without failures;

the applicant - the legal entity created by the legislation of Ukraine which intends to perform activities for trade in financial instruments also submitted to NKTsBFR the application and documents for receipt of the corresponding license;

failure is unplanned business disruption of the licensee which leads to interruption in provision by such licensee of services, including violation of implementation of the functions transferred on outsourcing, and/or violation of functioning or delay in work of information and communication system of the licensee (including transferred to outsourcing) is caused by unavailability of software and hardware complexes, personnel, rooms, service providers or data-processing centers, damage or loss of crucial information or documents, etc.;

investment product - the offer (offer) on provision of certain service (certain services) on certain financial tool / set of financial instruments standardized within separate type of activity on trade in financial instruments on the corresponding signs (conditions) offered uncertain circle of clients / prospective clients;

the leading officials are persons performing executive functions, and the faces performing supervising functions;

the head of the applicant/licensee - person performing function of sole executive body or the chairman of collegiate executive body of the legal entity;

the licensee - the legal entity created by the legislation of Ukraine, having the license obtained in the procedure established by the legislation;

the mediated essential participation ownership in the applicant/licensee which comes if person or group of persons directly or indirectly owns share (shares) in the authorized capital of one or several legal entities in structure of property of the legal entity of the applicant/licensee in such size which provides opportunity to control through this person (these persons) of 10 and more percent of the authorized capital of the applicant/licensee;

persons performing supervising functions - the chairman and members of the supervisory board (or other body responsible for implementation of supervision of the legal entity), other persons having powers on determination of strategy, the purposes and general activity of the legal entity watch process of acceptance of management decisions and control this process;

officials of the applicant / лицензиата-физические persons chairmen and members of the supervisory board or other body responsible for supervision implementation, the chairman and members of collegiate executive body (person performing powers of sole executive body and his deputies), the corporate secretary, the chief accountant, the chairman and members of other bodies of the applicant/licensee, education and which competence are provided by its charter;

permanency of provision of services providing by the licensee of opportunity to interact with the client in the licensee or via any means of communication defined by the relevant agreement signed with the client on permanent basis according to the working schedule of investment firm;

the direct owner of the applicant/licensee - person who is the owner of share (shares) in the authorized capital of the applicant/licensee;

the room part of unobstructed capacity of the building, limited to construction elements, with possibility of entrance and exit which is used by the licensee (including its isolated and/or specialized structural divisions) when implementing activities for trade in financial instruments;

the public company is:

public joint stock company;

the foreign legal entity who is the issuer of the shares admitted to trading on at least one of the following controlled markets:

New York Stock Exchange (NYSE);

Hong Kong Exchanges and Clearing;

London Stock Exchange (LSE);

Japan Exchange Group;

the controlled markets entering into Nasdaq, Inc.;

the controlled markets of the country entering the European Union;

controlled markets of Switzerland;

the specialized structural division of the applicant/licensee - division which is integral part of internal organizational structure of the applicant/licensee or its separate division and has other location, than the licensee or its separate division;

length of service on executive positions - length of service as the leading official and/or as deputy of the leading official of the professional participant of the capital markets, and/or as head and/or deputy manager of the isolated, specialized structural and/or functional division of the professional participant of the capital markets and/or as in associations (associations) of persons performing professional activity in the capital markets which received the status of self-regulatory organization and/or to positions of public service categories "B" in State commission on securities and the stock market are not lower than the head and/or the deputy manager (further - GKTsBFR) and/or NKTsBFR, and/or as the chairman or the member of such commission;

length of service in the capital markets and the organized goods markets is the general length of service of physical person including:

length of service on executive positions and/or as the specialist in the professional participant of the capital markets and the organized goods markets;

and/or length of service on executive positions and/or as the specialist in associations (associations) of persons performing professional activity in the capital markets and the organized goods markets;

and/or as public service in NKTsBFR (GKTsBFR) and/or as the Chairman or the member of NKTsBFR (GKTsBFR);

participation in the authorized capital - the direct and/or mediated ownership of one person independently or together with other persons of shares (shares) in the authorized capital of the legal entity;

the specialist - the worker of the applicant/licensee having the sufficient level of knowledge and skills for implementation of actions (transactions) connected with direct implementation of activities for trade in financial instruments.

Terms "underwriting", "algorithmic trade", "outsourcing", "close relations", "broker activities", "high-frequency trade", "dealer activities", "goodwill", "activities for portfolio management of financial instruments", "activities for placement without provision of a guarantee", "activities for placement with provision of a guarantee", "investment firm", "investment consulting", "organized market of the capital", "person performing executive functions", "person performing managerial functions", "official channel of communication", "officials of the professional participant of the capital markets and organized goods markets", "seed capital", "proksimiti-hosting", "professional activity in the organized goods markets", "professional activity in the capital markets", "professional participants of the capital markets and organized goods markets", "controlled market", "systemically important professional participant of the capital markets and the organized goods markets", "subbroker activities", "trading floor", "trade repository" are used in the values determined by the Law of Ukraine "About the capital markets and the organized goods markets".

The terms "essential participation", "controller", "control" are used in the values determined by the Law of Ukraine "About financial services and finance companies".

The terms "associated person", "key participant in structure of property of the legal entity", "chain of ownership of corporate laws of the legal entity", "structure of property of the legal entity" are used in the values determined by the Law of Ukraine "About banks and banking activity".

The terms "final beneficial owner" and "trust" are used in the values determined by the Law of Ukraine "About prevention and counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction".

The term "force majeur circumstances" is used in the value determined by the Law of Ukraine "About Chambers of Commerce and Industry in Ukraine".

The term "the armed aggression" is used in the value determined by the Law of Ukraine "About defense of Ukraine".

The term "the companies which are of public interest" is used in the value determined by the Law of Ukraine "About financial accounting and the financial reporting in Ukraine".

The term "unique number of entry in the register" (further - UNZR) is used in the value determined by the Law of Ukraine "About the Unified state demographic register and documents confirming citizenship of Ukraine, proving the identity or her special status".

The term "information and communication system" is used in the value determined by the Law of Ukraine "About information security in information and communication systems".

The term "program and technical complex" is used in the value given in requirements (rules) for implementation of activities for the securities trading: the broker activities, dealer activities, underwriting, management of securities approved by the decision of the National commission on securities and the stock market of November 03, 2020 No. 640, registered in the Ministry of Justice of Ukraine on January 14, 2021 No. 62/35684 (dalee-Trebovaniya implementation of activities for trade financial tools).

The terms "licensing" and "location of the legal entity" are used in the value given according to the procedure of issue, suspension of action and cancellation of the license for implementation of professional activity on the capital markets, approved by the decision of the National commission on securities and the stock market of October 21, 2021 No. 982, No. 1563/37185 registered in the Ministry of Justice of Ukraine on December 03, 2021.

The terms "committee of the body responsible for implementation of supervision, applicant/licensee", "body responsible for supervision implementation", "governing body", "officials of internal control system", "risk management", "managerial functions", "functional division of the professional participant" and "legal risks" are used in the values determined by standards of corporate management in professional participants of the capital markets and the organized goods markets established by decisions of the National commission on securities and the stock market of December 30, 2021 No. 1288 "About approval of the standard No. 1 "Corporate management in professional participants of the capital markets and the organized goods markets. The basic concepts and terms", No. 261/37597, registered in the Ministry of Justice of Ukraine on February 28, 2022 of December 30, 2021 No. 1289 "About approval of the Standard No. 2 "Corporate management in professional participants of the capital markets and the organized goods markets. The organization and functioning of internal control system in professional participants who are the companies which are of public interest and who are not banks", No. 258/37594, registered in the Ministry of Justice of Ukraine on February 28, 2022 of December 30, 2021 No. 1290 "About approval of the standard No. 3 "Corporate management in professional participants of the capital markets and the organized goods markets. The organization and functioning of internal control system in professional participants who are systemically important professional participants and who are not banks", No. 267/37603, registered in the Ministry of Justice of Ukraine on February 28, 2022 of December 30, 2021 No. 1291 "About approval of the standard No. 4 "Corporate management in professional participants of the capital markets and the organized goods markets. The organization and functioning of internal control system in the professional participants who are not belonging to the companies which are of public interest and in systemically important professional participants", registered in the Ministry of Justice of Ukraine on February 28, 2022 No. 263/37599 (further - standards of corporate management).

The term "disorder terms of trade" is used in the value determined by Licensed conditions of implementation of professional activity on the organization of trade in financial instruments in the controlled market and on the organization of trade in the financial instruments on multilateral trading floor approved by the decision of the National commission on securities and the stock market of April 29, 2022 No. 321, registered in the Ministry of Justice of Ukraine on June 14, 2022 No. 638/37974.

For the purposes of these Licensed conditions it is necessary to understand the level which provides or shall provide goal achievement certain with the business strategy of the applicant/licensee (considering its organizational structure), continuity of provision of services and observance of requirements of the legislation when implementing by the licensee of professional activity on trade in financial instruments as the sufficient level (sufficiency). Level is considered sufficient if other is not established by NKTsBFR or other public authority in case of accomplishment of the powers determined by the legislation.

For the purposes of these licensed conditions it is necessary to understand the level of its knowledge and skills which provides implementation to them actions (transactions) connected with direct implementation by the licensee of activities for trade in financial instruments according to requirements of the legislation, non-admission of harming clients of the licensee or creation of threat to investments, and prevention of acceptance by the licensee of risks which realization creates threat of integrity of the capital markets and stability of their functioning as the sufficient level of knowledge and skills of the specialist.

Other terms which are used in these Licensed conditions are used in the values determined by the laws and regulatory legal acts NKTsBFR.

4. To the requirements established by these Licensed conditions for implementation of the corresponding type of activity on trade in financial instruments shall satisfy:

the applicant and owners of essential participation in the applicant, including final beneficial owners of the applicant, as of date of filing of application about licensing and the documents determined by these Licensed conditions and during the term of their consideration;

the licensee, owners of essential participation in the licensee, including final beneficial owners of the licensee, during the whole time when they keep the status or have essential participation in the licensee.

The licensee shall fulfill the requirements established by these Licensed conditions throughout all term of activities for trade in financial instruments.

5. The licensee which is bank will organize the professional activity on trade in financial instruments according to the Provision on the organization of activities of banks and their separate divisions when implementing of professional activity by them in the stock market approved by the decision of the National commission on securities and the stock market of December 16, 2014 No. 1708, No. 1650/26427 registered in the Ministry of Justice of Ukraine on December 29, 2014 (dalee-Polozheniye on the organization of activities of banks).

II. Requirements to which there shall correspond applicant for receipt of the license and the licensee when implementing activities for trade in financial instruments

1. General terms

1. The legal entities registered in the form of joint-stock company, limited liability company or additional liability company can obtain the license.

The legal entity if its structure of property is not transparent cannot be the applicant/licensee.

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info