On September 12th, the Verkhovna Rada of Ukraine adopted the draft law on Improving Functions in State Regulation of Financial Services Markets (“Split Law”).
The amendments made in the draft law are the result of intensive joint work of financial sector regulators (the National Bank of Ukraine - NBU, the National Securities and Stock Market Committee - NSSMC, and the National Commission for State Regulation of Financial Services Markets) with the support of international donor communities, including the EU Delegation to Ukraine .
‘’The purpose of this law is to reduce the number of regulators and supervisors in the non-banking financial services markets by allocating the functions of the National Commission, which carries out state regulation in the field of financial services between the National Bank and the National Securities and Stock Market Commission. This change will gradually increase the transparency in the regulatory market, make the capital more sustainable and provide new laws related to financial monitoring. In the end, all citizens should have access to better financial services with consumers’ rights guaranteed,’’ remarks Ivelina Dilovska, project director for Human Dynamics .
According to the new law, the NBU will become the regulator in charge of insurance, leasing, financial companies, credit unions, pawnshops and credit bureaus. The NSSMC will regulate nonstate pension funds and construction financing funds.
A transition period is envisaged, during which functions will be transferred from the National Commission for State Regulation of Financial Services Markets to the NBU and NSSMC. It will run until July 1, 2020. The law also gives the NBU and NSSMC the authority to apply measures of influence to legal entities for offenses in the securities market and participants of non-banking financial services markets (except for financial services consumers) in the form of fines.
The FINREG project already started intensive consultations with the NBU and a work plan for legislative assistance from our side is agreed to and the implementation of the Split Law is already in progress.