The National Bank of Ukraine welcomes the decision of the Parliament of Ukraine to support in the first reading and in general the draft law of Ukraine “On amending some legislation on improving the functions of the state regulation of financial services markets” (before that – Bill 1069-2). 296 deputies voted in favor.
The Act provides for a so-called “split” – the liquidation of the National Commission for the Regulation of Financial Services Markets and the distribution of financial market regulation powers between the National Bank and the National Commission on Valuable Financial Services securities and the stock market.
In particular, the National Bank will become the regulator of insurance, leasing, financial companies, credit unions, pawnshops and credit bureaus, and the NCCBFR regulate non-state pension funds and construction financing funds.
“Thanks to the reform of the banking sector carried out by the National Bank, it is now transparent, pre-capitalized, profitable and actively working with the population.” financial stability. It gives us an opportunity to bring to a logical conclusion the reform of the financial sector, not limited to banks and extending the requirements of transparency, reliability and efficiency to the non-bank financial sector,” – stressed NBU Chairman Yakov Smoliy.
This law will provide a balanced and systematic approach towards the effective development of the non-bank financial sector, the transition from a sectoral regulatory model to a more efficient integrated model, and create an opportunity for comprehensive development of the function of regulating market behavior and protecting consumer rights in the financial market.
The Split Act would help the country obtain a financial system that met international standards. In particular, the adoption of this law was one of the key requirements of Ukraine’s international partners.
The law provides for a transitional period during which functions will be transferred from the National Financial Services Markets Regulatory Commission to the NBU and the NCBFR. It will last until July 1, 2020. During this time, the National Bank, together with the Commission, will build the necessary processes and structures for the transition of functions and simultaneously – together with the involvement of a wide range of experts and participants in the non-bank financial sector – to work on improving the legislation and regulations.
Until June 30, the National Committee of Finance Services will continue to regulate the market. As early as July 1, 2020, this function will be performed by the National Bank.
Last year, the National Bank proposed a draft model for regulating non-bank financial institutions, the so-called White Paper. The document outlines the NBU’s approaches to market segmentation, licensing, prudential supervision, reporting, audits, corporate governance and consumer protection.
The National Bank also plans to further develop the White Books with detailed proposals for regulating certain segments of the non-bank financial market, and there will also be a wide public discussion among representatives of the financial institutions, experts and other stakeholders (consumers, lenders and financial services investors). International financial institutions and other donors also plan to provide further technical assistance to the National Bank to organize a smooth transfer of functions and the gradual introduction of new regulatory requirements for non-bank financial Institutions.
By materials: bank.gov.ua