RESOLUTION OF BOARD OF THE NATIONAL BANK OF UKRAINE

of January 19, 2016 No. 15

About approval of Changes in Regulations on procedure for regulation of activities of banking groups

According to Articles 7, of 15, of 55, of 56, 58 Laws of Ukraine "About the National Bank of Ukraine", to Articles 9, of 66, 67 Laws of Ukraine "About banks and banking activity", for the purpose of increase in efficiency and ensuring stable activities of the Board of the National Bank of Ukraine banking groups decide:

1. Approve Changes in the Regulations on procedure for regulation of activities of banking groups approved by the resolution of Board of the National Bank of Ukraine of June 20, 2012 No. 254, registered in the Ministry of Justice of Ukraine on July 12, 2012 for No. 1178/21490 (with changes) (further - No. Provision 254) which are applied.

2. To responsible persons of banking groups:

1) to finish domestic situations, procedures, control systems on transactions with the faces tied with members of banking group for the purpose of ensuring integrity and completeness of process of determination of the faces tied with members of banking group and control of transactions with them;

2) to provide carrying out proper determination of the faces tied with members of banking group according to the Provision No. 254.

3. To department of methodology (Ivanenko N. V.) to bring contents of this resolution to the attention of banks of Ukraine for use in work.

4. To banks which are members of banking groups to bring contents of this resolution to the attention of controllers of banking groups and responsible persons of banking groups.

5. The resolution becomes effective in 31 days from the date of its official publication.

6. To impose control over the implementation of this resolution on the acting as the vice-chairman of the National Bank of Ukraine Rozhkova K. V.

 

Approved by the Resolution of Board of the National Bank of Ukraine of January 19, 2016 No. 15

Changes in Regulations on procedure for regulation of activities of banking groups

1. The fourth - the sixth the subitem "b" of Item 3 of the Section I to state paragraphs in the following edition:

"the maximum extent of credit risk on one connected person (N9k)

the maximum extent of credit risk on transactions with the connected persons (N10k)

the maximum extent of credit risk on transactions with the connected faces which are not financial institutions (H10-1k)".

2. In the Section II:

1) in Chapter 1:

exclude Item 1.2.

With respect thereto Items 1.3 - 1.6 to consider respectively Items 1.2 - 1.5;

in Item 1.2:

to state the paragraph of the seventh in the following edition:

"the amount of investments (the share, shares, shares) members of banking group in the authorized capital of other members of banking group and other financial instruments (additional contributions of shareholders, subordinated debt, etc.), turn on in the regulatory capital of the member of banking group and which are not subtracted when calculating the regulatory capital of subgroups of banking group or members of banking group if there is no relevant subgroup of banking group";

paragraphs the eighth, ninth to exclude;

in Item 1.4:

the second offer of the paragraph of third to state in the following edition: "If there are no such rules, then the regulatory capital of the member of credit and investment subgroup is determined by the data reflected in its financial reporting in the report "Balance (The report on financial condition)" in the amount of the equity reduced by the amount of residual cost of intangible assets";

the fourth to state the paragraph in the following edition:

"When calculating the regulatory capital of credit and investment subgroup from the capital of the member of this subgroup the amount of investments of the authorized capital of other members of this subgroup and other financial instruments which turn on in the regulatory capital of the member of banking group and which were not withdrawn when calculating the regulatory capital of these participants is excluded";

2) in Chapter 2:

exclude Item 2.2.

With respect thereto Items 2.3 - 2.5 to consider respectively Items 2.2 - 2.4;

the first offer of the paragraph of the sixth Item 2.2 to state in the following edition: "To - adjustment which is determined as the necessary size of the regulatory capital which was expected the amount of assets investments (the share, shares, shares) members of banking group in the authorized capital of other members of banking group and other financial instruments which are considered in the regulatory capital of the member of banking group";

in Item 2.3:

in the paragraph the second to replace the letters "SVP" with the letters "SVP — NKR";

add Item with the new paragraph of the following content:

"NKR - the size of uncovered credit risk which is determined according to the procedure, established by Chapter 1 of the Section II of the Instruction No. 368".

3. In the Section IV:

1) in Chapter 1:

the fourth - the sixth Item 1.3 to state paragraphs in the following edition:

"the standard rate of the maximum extent of credit risk on transactions with the connected person (N9k);

the standard rate of the maximum extent of credit risk on transactions with the connected persons (N10k);

the standard rate of the maximum extent of credit risk on transactions with the connected faces which are not financial institutions (H10-1k)";

in Item 1.4:

in the paragraph the second to replace figures "1.8", "1.13" with figures "1.9", "1.10";

third to state the paragraph in the following edition:

"Determination of the faces tied with members of banking group (further - the connected persons) is performed according to article 52 of the Law of Ukraine "About banks and banking activity";

state Item 1.5 in the following edition:

"1.5. The responsible person of banking group shall provide availability of effective policy and procedures of timely identification, calculation, assessment, monitoring, control and credit risk management, including on transactions with the connected persons, and also big credit risks in one partner (group of the connected partners), the connected persons. These policy and procedures shall cover all cycle of crediting which includes issuance of credit, its assessment, and also implementation of management of credit and investment portfolio.

Members of banking group provide availability of the corresponding information systems for identification of active transactions with groups of the connected partners, the connected persons, maintaining the list of the connected persons, scoping of transactions with the connected persons, and also the total volume of transactions of members of banking group with all connected persons for the purpose of their monitoring";

2) in Chapter 2:

state Item 2.2 in the following edition:

"2.2. Norm N7k is determined as ratio of the amount of cumulative requirements of participants of bank group / subgroup of banking group to the partner (group of the connected partners) and all financial liabilities provided by such participants to this partner (group of the connected partners) to the regulatory capital of bank group / subgroup of banking group";

in Item 2.3:

the fourth to state the paragraph in the following edition:

"where Sunday (бг) - the cumulative amount of all requirements of members of banking group to one partner (group of the connected partners) and all financial liabilities provided by such participants to this partner (group of the connected partners) which is calculated by formula";

to state paragraphs of the sixth, seventh in the following edition:

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