‘We have proved that the organised commodity market works during the war – everything is transparent and clear’, – Chairman of the NSSMC

This was stated by Ruslan Magomedov, Chairman of the National Securities and Stock Market Commission, in an interview with Interfax-Ukraine.

In his words, the NSSMC has created conditions for the operation of an organised commodity market, which has proven its effectiveness by creating transparent energy and timber markets with clear rules. This has resulted in increased tax revenues to the budget and efficient exchange trading.

At the same time, the Chairman of the National Securities and Stock Market Commission drew attention to the discussions around timber exchange trading in the context of legislative changes, namely the proposal to transfer this functionality to Prozorro.Sale. The NSSMC emphasises the preservation of exchange mechanisms in timber trade, as international standards stipulate that timber is a tradable commodity. Therefore, the NSSMC supports the draft law on the Timber Market in the version approved by the Committee on Economic Development for the second reading.

He also explained the importance of the anonymity of exchange orders, which is a common practice in developed markets and helps prevent manipulation. Exchanges provide reliable control over the identification of participants in accordance with international requirements and FATF standards. They also guarantee secure settlement and risk management, and use collateral for security.

The success of such a mechanism is proved by the figures: in 2024, the volume of timber traded on exchanges amounted to more than UAH 31 billion, which is 8.5% of all types of exchange-traded goods. At the same time, Prozorro.Sale can join the exchange activity by obtaining appropriate licences.

The Chairman noted that our exchange model of timber trade was also borrowed by our Lithuanian partners.

At the same time, he noted that currency restrictions remain one of the challenges for the organised commodity market, which complicate the work with currency collateral. There are already some joint developments with the NBU, but this is not enough, so we hope that the NBU will consider making the necessary changes.

The NSSMC Chairman concluded that the experience of successful timber trading in the commodity market should be applied to the grain market, which will make it more efficient and transparent. This work is already underway. As a reminder, the NSSMC Chairman recently met with Minister of Agrarian Policy Vitalii Koval. The officials discussed the supply of modern financial instruments to the agricultural market and the promotion of ‘agricultural notes’ among agribusinesses.