REGISTRATION OF PAWNSHOP
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A pawnshop is a financial institution, the exclusive activity of which is the provision of financial loans to individuals at its own risk using its own or borrowed funds, secured by property for a specified period and at interest and the provision of related services of a pawnshop.
A financial loan from a pawnshop is the provision by a pawnshop of funds in a loan, secured by a pledge, for a specified period and at interest.
Registration of a pawnshop is a laborious process that requires the fulfillment of a number of conditions for creating a pawnshop.
Registration of a pawnshop
The pawnshop provides financial services related to financial. Financial services are provided by a pawnshop after it is entered into the Register of Financial Institutions, obtaining a Certificate and after obtaining an appropriate license for a pawnshop for financial services.
The procedure for registering a pawnshop, creating a pawnshop:
- Registration of a pawnshop as a legal entity in the form of a Full Company, the participants of which are at least 2 business entities
- Financial institution compliance
- Entry into the register of financial companies – registration of a pawnshop
- Obtaining a license for a pawnshop
In order to register a pawnshop - an institution, by the time of submission of documents to the Commission, must meet all the conditions of pawnshop activity.
Pawnshop registration period:
- Registration of a pawnshop as a business company – up to 10 days
- Deadline for entry into the Register of Financial Institutions – up to 30 days
- The term for obtaining a license for a pawnshop is up to 30 days
Setting up a pawnshop from scratch usually takes about 2 months.
The registration of a pawnshop as a financial institution is carried out by the National Commission for the Regulation of Financial Services.
Ломбард предоставляет следующие услуги:
- Pawnshop financial services
- Pawnshop related services
The financial services of a pawnshop include:
- Provision of financial loans from own funds
- Providing financial loans at the expense of borrowed funds
The related services of a pawnshop, unless otherwise provided by law, include:
- Assessment of the pledged property in accordance with applicable law and / or the terms of the contract.
- Provision of intermediary services for the insurance of the pledged item on the basis of an agency agreement with an insurance company.
- Realization of the pledged property in accordance with the current legislation and / or the terms of the contract.
- Activities on the provision of financial loans at the expense of attracted funds are subject to obtaining a license for a pawnshop.
Conditions for creating a pawnshop
Conditions for creating a pawnshop for the purpose of providing financial services:
- Have equity capital of at least UAH 500,000, and if the pawnshop has separate subdivisions – at least UAH 1,000,000.
- Availability of premises (on the basis of ownership or use rights) with an area of at least 5 square meters, intended for the provision of financial services and related services of a pawnshop and a special place for storing mortgaged property.
- Creation of a pawnshop in the form of a full company, the participants of which are at least two business entities – a prerequisite
- The activity of a pawnshop must comply with the requirements of the legislation on financial services.
- In order to create a pawnshop, a pawnshop must have a separate non-residential premises (on the basis of ownership or use rights), intended for the provision of financial services and related services of a pawnshop and a special place of storage of the pledged property
- The pawnshop must be entered in the State Register of Financial Institutions.
- Have a pawnshop license to provide certain types of financial services.
- Have internal rules or regulations governing the provision of financial and related services by the pawnshop, approved in the prescribed manner.
- The constituent documents of a pawnshop must comply with the conditions for the creation of pawnshops, legislation and contain an exhaustive list of types of financial services and related services that the pawnshop provides.
- The full name of a pawnshop must contain the word “pawnshop”. It is forbidden to use the name identical to the existing name of pawnshops, both full and abbreviated, and trademarks of other pawnshops registered in accordance with the procedure established by law, in the absence of a legal basis, as well as derivatives from names, trademarks, if such use is misleading consumers of financial services and others.
- The condition for the creation of a pawnshop is the provision of financial services, it is prohibited to carry out any other entrepreneurial activity, except for the entrepreneurial activity provided for by legislation for pawnshops.
- Have your own accounting and registration systems that meet the requirements of these Regulations. The data of the accounting and registration systems of the pawnshop for any date must correspond to the accounting data.
- In their activities, comply with the conditions for the creation of a pawnshop, the current legislation, in particular, on the protection of consumer rights.
- A pawnshop is obliged to form a reserve fund in accordance with Article 14 of the Law of Ukraine “About Business Companies” and to form a corresponding reserve due to depreciation (depreciation) of assets in accordance with the requirements of international financial reporting standards, taking into account the requirements of the Tax Code of Ukraine.
A special place of storage of pledged property is a separate room, a separate territory, a place with limited access, which must meet the requirements established by law, be located at the location of the pawnshop or its separate subdivision or at another address and be equipped with the necessary means that must ensure the safety of the pledged items and the maintenance of pledged items in good condition.
When carrying out activities for the provision of financial loans to a pawnshop, it is prohibited to attract funds from individuals, with the exception of funds received on a repayable basis from individuals - members of the pawnshop.
It is prohibited to place the pawnshop premises in small architectural forms, temporary or non-capital structures.
The provision of financial services can be carried out at the location of the pawnshop and / or its separate divisions.
A license for a pawnshop is a document that gives a pawnshop the right to lend funds, including on the terms of a financial loan secured.
The provision of funds on a loan, including on the terms of a financial loan, is a financial service, if such a service is provided on the basis of a loan agreement or other agreement, has all the features of a loan agreement.
As of the date of filing an application for a license, a pawnshop must be entered in the State Register of Financial Institutions, maintained by the National Financial Services Commission (except for another legal entity providing financial services).
To obtain a license, a pawnshop must meet the requirements for the provision of lending services.
At the pawnshop, on the date of submission of documents for obtaining a lending license, there must be no unfulfilled measures of influence (regardless of whether the deadline for their implementation has come).
Opening of a separate pawnshop subdivision
- Information about the separate subdivisions of the pawnshop must be entered into the State Register of Financial Institutions.
- The presence in the Unified State Register of Legal Entities, Individuals – Entrepreneurs and Public Formations of an entry on the state registration of the creation of a separate pawnshop subdivision.
- The activities of separate divisions must comply with the conditions for opening a pawnshop, legislation on financial services.
- Have an accounting and registration system that meets the conditions for opening a pawnshop.
- The regulations on separate divisions should contain an exhaustive list of types of financial services and related services that these divisions can provide.
- In its activities, comply with the requirements of the legislation, in particular, on the protection of consumer rights.
Separate subdivisions of a pawnshop for the provision of financial services must meet the following conditions:
A pawnshop agreement on the provision of a financial loan by a pawnshop must comply with the conditions for the creation of pawnshops, the legislation on financial services.
The pawnshop agreement must contain:
- Name, location and details – for a pawnshop, last name, first name, patronymic of an individual, passport data (number, series, date of issue, issuing authority) or other identity document, and data on the place of residence – for individuals
- Subject of the contract
- Rights and obligations of the parties
- Financial loan amount
- The date of the financial loan
- Financial loan term
- The date of repayment of the financial loan
- Responsibility of the parties
- Grounds for prolongation, termination and termination of the contract
- Signatures of the parties
In addition, the pawnshop agreement must indicate:
- Interest for using a financial loan from a pawnshop;
- Link to the pledge agreement securing the obligations under the financial loan agreement;
- Link to the insurance contract of the pledged item, if any;
- A mark on the familiarization of the borrower with the internal rules or regulations on the provision of financial services by a pawnshop.
A pawnshop agreement on the provision of financial loans to a pawnshop may contain other conditions, by agreement of the parties.
A pawnshop agreement on the provision of a financial loan and a pledge agreement securing obligations under a financial loan agreement can be drawn up as one document.
The pawnshop determines the interest rates on loans and fees for related services provided by the pawnshop.
A person who is a member of the governing body or an employee of a pawnshop can conclude agreements with this pawnshop to provide such a person with a financial loan on terms that do not differ from the usual ones.
The borrower has the right to early repay the amount of the loan provided, while interest on the use of the financial loan is charged in accordance with the term of the actual use of the financial loan.
The collateral is insured by mutual agreement of the parties. Refusal to insure the collateral by the borrower cannot be the basis for refusal to provide a financial loan.
Accounting and registration system of a pawnshop
The accounting and registration system of the pawnshop is maintained in electronic form by using the appropriate software, provides accounting of consumers of pawnshop services and registers their operations.
The technical support of the pawnshop should ensure the functioning of the accounting and registration systems of the pawnshop and be created on the basis of computer systems that can ensure the performance of technological operations for keeping records in these systems.
The composition and structure of technical support are determined by the pawnshop independently, based on its ability to constantly comply with the requirements for the accounting and registering systems established by the National Commission that carries out state regulation in the field of financial services markets, protection from unauthorized access.
The pawnshop must ensure the protection of information in the accounting and recording systems in order to prevent any changes in the data recorded after the operations by means of software.
The database backup procedure should be performed daily. Backups should be stored on a separate storage medium or on a separate dedicated network hardware.
Access to the software of the data of the pawnshop's accounting and recording systems should be limited and allowed only to certain personnel.
To protect against unauthorized access to databases of accounting and registration systems, a pawnshop must develop a procedure for establishing appropriate passwords.
Creation of a pawnshop is a time consuming process that requires knowledge and work of professionals.
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REGULATORY ACTS REGULATORY ACTIVITIES
Legal and regulatory framework
01. Law of Ukraine: On Financial Services and State Regulation of Financial Services Markets
02. Regulation: On the State Register of Financial Institutions
03. Regulation: On the procedure for the provision of financial services by pawnshops
PROCEDURE FOR ESTABLISHING A FINANCIAL COMPANY
Stages of creating a financial company
01. Registration of a financial company
Preparation of statutory documents, approval of the position of director, registration of a legal entity
02. Bringing to standards
Formation of authorized capital, personnel training, audit, development of rules and regulations
03. Entry into the Register
Preparation of a package of documents, submission to the Commission, consideration of documents, entry into the Register
04. Obtaining a license
Development of rules and contracts, audit, preparation of documents for a license, submission to the commission, issuance of a license for financial services
WHAT CONDITIONS MUST BE FULFILLED
Requirements for setting up a Financial Company
ORGANIZATIONAL AND LEGAL FINANCIAL COMPANY
Special rules are created for: Pawnshops – in the form of a complete society; Credit unions – a legal entity whose members are at least 50 individuals; Insurance companies – in the form of a joint stock company or an additional liability company; Banks – in the form of a joint stock company and others …
Statutory documents must comply with the requirements of financial companies.
SIZE OF AUTHORIZED CAPITAL OF THE FINANCIAL COMPANY
For pawnshops – at least UAH 500 thousand or at least 1 million – if branches are opened.
For a financial company – at least UAH 3 million.
For a financial company combining several types of activities – at least UAH 5 million.
For the provision of certain types of financial services, separate requirements may be set.
The financial company must have a transparent ownership structure in which the ultimate beneficiaries and owners can be identified. The ultimate beneficiaries, owners must have confirmation of the origin of the funds.
FINANCIAL COMPANY ROOM
The premises must be equipped with appropriate computer equipment, which makes it possible to ensure compliance with the requirements for the submission of information to the National Bank of Ukraine / National Commission on Securities and Stock Market, established by the legislation governing the provision of financial services, and communications (telephone, Internet, electronic mail).
For certain types of financial services, their requirements for premises may be set.
For pawnshops, there is a place in the room for storing pledged property. A special place of storage of pledged property is a separate room or a separate territory, a place with limited access, which must meet the requirements established by law, be located at the location of the pawnshop or its separate subdivision or at another address and be equipped with the necessary means that must ensure the safety of the pledged items and the maintenance of the pledged items in good condition.
A credit institution must have a separate private or rented non-residential premises with limited access and a safe for storing money (funds) and documents, which makes it impossible to damage them.
Insurance companies must own or use premises, namely the non-residential part of the internal volume of the building, limited by building elements, with the ability to enter and exit, which is used exclusively by this applicant in the implementation of insurance activities, at the location.
Credit unions are required to have a separate room with limited access and a safe for storing money (funds) and documents, which makes it impossible to damage them.
PERSONNEL OF THE FINANCIAL COMPANY
- Requirements for the manager and chief accountant
- Professional requirements for specialists (for the securities market)
- Requirements for the person responsible for financial monitoring
The head of a financial company that provides the following financial services: lending, leasing, factoring, insurance, currency exchange, money transfer, construction financing, guarantees and sureties, are subject to the following requirements:
- have a higher education master’s degree or equivalent;
- undergo advanced training and pass an examination for the compliance of knowledge with professional requirements according to the standard training program for managers;
- have at least five years of general work experience, of which at least two years of work as a manager, in particular, at least one year as a manager in the financial services markets (for the chairman of the board of a credit union and a pawnshop manager – at least one year of work as a manager)
- have an impeccable business reputation.
The chief accountant of a financial company that provides the following financial services: lending, leasing, factoring, insurance, currency exchange, money transfer, construction financing, guarantees and sureties, are subject to the following requirements:
- have a higher education at least a bachelor’s degree;
- undergo advanced training and pass an examination for the compliance of knowledge with professional requirements according to a standard training program for chief accountants;
- have at least three years of work experience as a manager in the field of financial and / or accounting activities or work experience in the financial services markets in positions related to financial or accounting activities;
- have an impeccable business reputation.
Banks, participants in the securities market are set their own requirements.
Financial companies are subjects of primary financial monitoring, for this purpose the following requirements are set for the position of the person responsible for financial monitoring: have an impeccable business reputation, have a higher education, at least a year’s work experience in the field of preventing and combating the legalization (laundering) of proceeds from crime, take refresher courses and pass an exam according to the standard refresher training program for the subjects of primary monitoring.
For financial companies, participants in the stock and securities market, additional professional requirements may be set. So for an asset management company, in order to obtain a license for asset management, it is necessary to have at least 3 certified asset management specialists.
REGULATORY FOR REGISTRATION OF A FINANCIAL COMPANY
- The constituent documents must contain an exhaustive list of types of financial services that the financial company will provide as an exclusive type of its activity, including taking into account the restrictions on the combination of certain types of financial services. The constituent documents of a financial institution – must meet the requirements of a special regulatory legal act, according to which such a legal entity was created.
- A financial company has an internal document governing the procedure for the provision of financial services and model contracts with consumers of financial services must comply with the requirements of the law.
- Availability of an accounting system that meets legal requirements.
- Availability of accounting and recording systems (software and special technical equipment), which must comply with the requirements established by law, and provide for the maintenance of accounting transactions for the provision of financial services to consumers and reporting.
- Formation of the financial company of the authorized capital in cash, as well as the compliance of its size with the requirements of the legislation.
- Compliance of the manager and chief accountant with the Professional requirements for managers and chief accountants of financial institutions.
- The presence of the conditions necessary for the provision of financial services to consumers, namely: own or rented premises at the location of the applicant, indicated in the Unified State Register; appropriate computer technology, which makes it possible to ensure compliance with the requirements for the presentation of information established by the legislation governing the provision of financial services, and communication facilities (telephone, Internet, e-mail).
WHAT IS NECESSARY TO START REGISTRATION OF A FINANCIAL COMPANY
- Information about the Founders and ultimate beneficiaries.
- Data about the Premises (physical address where the company will be located).
- Information about the Manager, Chief Accountant, Responsible for financial monitoring (may be the person of the Director / Chief Accountant): passport, code, diploma, work book.
- The planned name of the Company.
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