Optimization of license conditions for commodity exchanges: NSSMC has developed a new version

Over the three years of operation of organized commodity markets, National Securities and Stock Market Commission (NSSMC) has issued four licenses to conduct activities related to the organization of commodity trading on commodity exchanges. During this time, certain practice of applying the rules of the license conditions has been acquired, and accordingly, NSSMC has had to regulate certain procedural issues.

Thus, NSSMC approved a new version of the Licensing Conditions for Professional Activities in Organized Commodity Markets – Activities for Organizing Commodity Trading on Commodity Exchanges, which has a number of innovations and changes.

NSSMC has added new requirements due to the introduction of a new type of professional activity – the organization of derivative contracts on commodity exchanges.

The organizational and operational requirements have been supplemented by a provision requiring the commodity exchange to establish and maintain effective and transparent procedures for receiving applications from its members, trading participants and other persons having access to exchange trading.

New provisions have been added to the requirements for the applicant’s/licensee’s software and hardware:
– the obligation of the commodity exchange to ensure duplication or backup of original information arrays;
– maintaining electronic records of auction announcements,
– maintaining electronic records of complaints from bidders,
– monitoring information about commodity exchange members and their clients who carry out exchange transactions in their own interests, and compiling appropriate ratings based on the information about the exchange commodity, the number of concluded and executed exchange contracts, the frequency of concluding exchange contracts, etc;
– remote procedures for admission to exchange trading or membership in a commodity exchange in accordance with the rules of the exchange.

Two processes related to the issuance of a license and registration of commodity exchange rules have been optimized. Amendments have also been made to the information, terms and procedure to be submitted by the licensee to NSSMC when conducting professional activities on organized commodity markets.

The text of the new license conditions is available on the regulator’s official website at the following link: https://www.nssmc.gov.ua/document/?id=20896318