NSSMC strengthens protection of citizens’ investments from bankruptcy of developers

On 07 February 2025, a meeting of the National Securities and Stock Market Commission was held, focusing on the protection of citizens who invest their funds in construction projects.

Unfortunately, based on the results of monitoring activities conducted by the NSSMC on an ongoing basis, bankruptcy cases of developers have recently become more frequent. As a result, we have not only increased risks of market destabilisation, but also increased social tension among citizens who lose their money.

Since protecting investors and ensuring transparent conditions for market participants is a top priority for the NSSMC, the meeting decided to resolve such problematic issues and prevent these risks by amending the relevant regulatory framework of the NSSMC.

The amendments include:

1) mandatory posting by the management company, with which citizens have concluded agreements on participation in the CFF, on its website of information on the opening of bankruptcy (insolvency) proceedings against the developer and the results of its consideration;

2) obligation of the management company to stop financing the construction;

3) prohibition to conclude new agreements on participation in the CFF with citizens if bankruptcy (insolvency) proceedings are opened against the developer;

4) the right of a citizen to refuse to transfer funds under the concluded agreement during the term of bankruptcy (insolvency) proceedings against the developer. Such refusal will not be considered a breach of contract.

The draft Resolution is published on the website https://www.nssmc.gov.ua/document/?id=35347848. Within 10 days, the NSSMC team expects comments and suggestions for further approval of the document.