More protection for market participants: NSSMC approves recommendations on primary financial monitoring

NCSSM decided to approve the recommendations for the subjects of primary financial monitoring, state regulation and supervision of which is carried out by the regulator. The updated document is based on a risk-based approach, and its key innovation is that now the risks of transactions with dubious issuers and their securities are taken into account directly by market participants.

«The NSSMC sees one of its goals as preventing risky transactions in the capital market. At the same time we do not limit the market participants – subjects of primary financial monitoring, so we show them the vector with updated recommendations and propose to independently approve the risk criteria. Let me remind that according to the standards of the regulator, and according to the international approach, these criteria are based on the following principles: country, product, client. For the capital market, it’s a financial instrument, or an issuer and its characteristics», says Yurii Shapoval, a Commissioner that oversees this area of work.

In addition, the recommendations added two new items to the regulator’s risk criteria. They apply to customers who carry out transactions with securities of issuers registered in the temporarily occupied territories of Donetsk and Luhansk regions, the Autonomous Republic of Crimea and Sevastopol, or have a beneficial owner registered in these territories.

«Once again, I emphasize that with this decision, we give more room for movement to market participants. We give them a tool with which they can work independently. The risk criteria affect the identification and verification of issuers, so the whole set of actions to verify, record documents is done by market participants themselves», adds Mr. Shapoval.

The regulator has developed updated recommendations in connection with the adoption of the Law of Ukraine No. 738-IX оn Amendments to Certain Legislative Acts of Ukraine on simplification of attraction of investments and introduction of new financial instruments.