The development of a well-regulated, broad, deep and transparent capital market is critical for Ukraine to recover from the economic and financial crisis. FINREP aims to contribute to the effort of the Ukrainian authorities and of private market participants to build a strong capital market to enhance financial sector stability, broaden the sources of financing for government, enterprises and households, diversify domestic assets available for institutional and retail investors, and facilitate the successful introduction of second pillar pensions as part of the reform of the country’s pension system.

The securities market and NBFI regulatory and supervisory framework is one major focus of FINREP activity. As part of the central executive power, the Securities commission (SSMNC) and the Financial Services Regulator (FSR) lack operational independence, suffer from funding constraints, lack sufficient skilled staff and automated systems, engage in limited oversight of the market, and has limited investigation and enforcement powers. FINREP focuses on strengthening the procedures and practices of regulators to increase transparency and accountability, to improve risk-based supervision and enforcement in line with international standards, and to provide oversight of corporate governance principles and practices by joint stock companies (JSCs).

The creation of a single central depository for Ukraine is a critical element in the securities market infrastructure. A properly functioning central depository provides the investor confidence that ownership records are safe and secure, and mitigates operational risk through prompt clearance and settlement. It is also an important component for pledging collateral and for developing the Repo and Reverse Repo market in Ukraine. FINREP will support the development of a single central depository based on the All-Ukrainian Securities Depository (majority private ownership with a 25% stake for the NBU).   ...

FINREP will also provide assistance to the SSMNC and to three securities market self-regulatory organizations (SROs) to enhance market monitoring, compliance, and enforcement. The project will address legal and regulatory infrastructure problems that impede optimum use of SROs, recommend changes in the governing instruments and rules of SROs, and provide limited assistance for capacity building for selected SROs.   ...

The USAID/Capital Markets Project (2005-2010) assisted the Ukrainian Securities Commission to develop an electronic system for comprehensive information disclosure (ESCRIN) for public companies to disclose meaningful financial and other information to the public.FINREP will continue to provide technical assistance, training, and technology support to the SSMNC for infromation disclosure through ESCRIN.   ...