SALANS' BANKING AND FINANCE LEGAL NEWSLETTER
Salans Kyiv, Ukraine - Legal Market News, Banking and Financial Sector
Kyiv, Ukraine, Wednesday, May 13, 2009
KYIV: The latest Salans' Banking and Finance Legal Newsletter was issued today. IN THIS ISSUE:
1. Regulation of foreign currency use by banks
2. Raising and recording deposits
3. Amendments to the Decree of the Cabinet of Ministers of Ukraine “State duty” regarding banking operations involving securities
1. Regulation of foreign currency use by banks ----------
Resolution of the board of the National Bank of Ukraine (‘NBU’) dated 28.02.2009 No. 108 “Amendments to particular legislative acts of the National Bank of Ukraine”
The resolution of the board of the NBU dated 28.02.2009 No. 108 amended the following legislative acts of the NBU:
v Clause 1 of resolution No. 1 dated 29.01.2003 No. 36, "Conduct of transactions involving Ukrainian issuers’ securities" was deemed null and void.
The clause permitted banks and non-banking financial institutions to conduct sale transactions on the interbank currency market under agreements for
the sale and purchase of Ukrainian issuers’ securities concluded between residents and non-residents under individual NBU licenses;
v The provision on procedures for obtaining credit (loans) in a foreign currency by residents from non-residents and the provision of credit (loans) in a
foreign currency by residents to non-residents, where it addresses the possibility of granting foreign currency loans to non-residents, stipulates that
authorized banks possessing a written permit from the NBU for transactions involving the raising and placement of foreign currency on international
markets and authorized financial institutions possessing a general license to conduct currency transactions may provide foreign currency credits
(loans) only to non-resident banks;
v The provision on procedures for foreign investment activity in Ukraine provides that for the purpose of portfolio investment in Ukraine, a foreign
investor is entitled to sell foreign currency from his own investment account; credit to his own investment account hryvnia funds obtained from the
sale of the foreign currency; and transfer these funds to the seller. The requirement for a 30-day term for settlement by the foreign investor in respect
of the investment has also been excluded from the provision;
v The provision on procedures and terms for the sale of foreign currency envisages that authorized banks may conduct transactions for the purchase of
foreign currency for hryvnias within the established limitations of the currency’s position, subject to the maturation of currency liabilities, as
prescribed by law;
v Clause 1.12 of Section 1 has been removed from the provision on procedures for issuing individual licenses to residents (legal entities and
individuals) to place currency assets on accounts outside Ukraine. The clause provided that the owner of the license could buy foreign currency for
hryvnias on the interbank currency market of Ukraine in order to ensure conduct of the transactions stipulated by the license.
The NBU also prohibited market entities from conducting transactions for the sale and purchase of foreign currency for hryvnias on the interbank currency market of Ukraine on “spot” conditions and residents (including authorized banks) from conducting currency transactions for the sale and purchase of foreign currency and/or precious metals on “forward” conditions till January 1, 2010.
The resolution came into force on 19.04.2009.
2. Raising and recording deposits ----------
Resolution of the board of the National Bank of Ukraine dated 23.03.2009 No. 159 “Approval of amendments to particular legislative acts of the National Bank of Ukraine with regard to raising and recording deposits”
The resolution of the board of the NBU dated 23.03.2009 No. 159 introduced the following amendments to the provision on procedures for the conduct of deposit transactions by the banks of Ukraine with legal entities or individuals ratified by resolution of the board of the National Bank of Ukraine dated 03.12.2003 No. 516 and to the instructions оn accounting for credit and deposit transactions and the formation and use of reserves for credit risks in banks of Ukraine ratified by resolution of the board of the National Bank of Ukraine dated 27.12.2007 No. 481, in particular:
v The distinctive features of entering into bank deposit agreements are specified, in particular, it is emphasized that deposit on demand is made based
on the terms of the deposit payment on first demand, and the term deposit shall be paid upon expiration of the term stipulated by the agreement;
v It is stated that one sample of the agreement shall remain with the bank, and the second shall be delivered to the client for signing. It is also stated that
no issuing of a permit by the main bank of the division shall be required by a separate division in order to enter into a bank account agreement and a
bank deposit agreement;
v It is provided that banks must record deposits which include an option to make regular withdrawals as deposits returnable on demand;
v Banks are prohibited from unilaterally changing the terms of concluded bank deposit agreements and bank account agreements, this includes: they may
not change the amount of interest under bank deposit agreements, except as regards deposits returnable on demand;
v It is provided that if a bank does not satisfy an individual’s deposit return request, the bank must accept the request by registering and recording it on
the respective off-balance sheet accounts.
The resolution came into force on 27.04.2009.
3. Amendments to the Decree of the Cabinet of Ministers of Ukraine “State duty” regarding banking operations involving securities ----------
Law of Ukraine No. 1161-VI dated 19.03.2009, “Amendments to the decree of the Cabinet of Ministers of Ukraine, “State duty” regarding banking transactions involving securities”
The Supreme Council of Ukraine amended the decree of the Cabinet of Ministers of Ukraine No. 7-93, “State duty” dated 21.01.1993 by law No. 1161-VI dated 19.03.2009.
Subject to the amendments mentioned above, banking operations involving the issue of mortgage securities (mortgage certificates and mortgage bonds) and certificates of real estate funds shall not be subject to state duty, from 01.01.2010 State duty shall become payable on the registration of derivatives.
The amendments mentioned above also change the duty rates for particular activities, i.e., a rate is established in the amount of 0,1% of the nominal value of the issue of securities. However, such rate must not exceed the amount of five times the minimum salary as established on January 1st of the current year.
The rate applies to registration of the issue of securities, except for state bonds and local loans. The rate for registration of derivatives shall be the equivalent of 50 personal exemptions.
The resolution shall come into force on 01.01.2010.
ABOUT SALANS: Chambers Europe Award for Excellence 2009 for Central and Eastern Europe:
Salans has been recognised as the leading law firm in Central and Eastern Europe at the annual Chambers Europe Awards ceremony, held in London.
Based on client and peer research by leading independent publisher Chambers and Partners, the award was collected on behalf of the firm by Oleg Batyuk, Managing Partner of the Kyiv office. The firm’s Ukraine presence was also singled out for honour in the evening’s individual jurisdiction categories.
Salans is a full service international law firm. Salans has its offices in Almaty, Baku, Barcelona, Beijing, Berlin, Bratislava, Bucharest, Budapest, Frankfurt, Hong Kong, Istanbul, Kyiv, London, Madrid, Moscow, New York, Paris, Prague, Shanghai, St. Petersburg and Warsaw.
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CONTACT: For further information, please contact: Oleg Batyuk, Managing Partner, Kyiv, E-mail: obatyuk@salans.com, Natalia Selyakova, Head of Banking and Finance Group in Ukraine, E-mail: nselyakova@salans.com. SALANS, 49-A, Volodymyrska Street, 2nd floor, 01034 Kyiv, Ukraine, Tel: +380 44 494 4774, Fax: +380 44 494 1991, Website: www.salans.com, E-mail: kyiv@salans.com.
