NSSMC DEVELOPED AND SUBMITTED TO THE COMMITTEE ON FINANCE, TAX AND CUSTOMS POLICY A DRAFT LAW THAT WILL SOLVE THE PROBLEM OF CLIENTS WITH FREEDOM FINANCE UKRAINE

To resolve the difficult situation concerning Freedom Finance Ukraine LLC clients and their blocked funds, the NSSMC (National Securities and Stock Market Commission) has prepared a draft law that amends three laws of Ukraine – on Sanctions, on the Depository System and on Capital Markets, and has already sent it to MPs for consideration.

The NSSMC, as announced in July this year, in cooperation with the National Bank, the National Depository of Ukraine, the Settlement Center and the IWG (Interdepartmental Working Group on the Implementation of Sanctions Policy) at the Cabinet of Ministers of Ukraine, developed a draft amendment to the current legislation that will systematically solve the problem with clients of Freedom Finance Ukraine. After all, the immediate revocation of the license, which the NSSMC so loudly called for, will not solve the problem, but will only worsen it. Since a professional market participant will cease to report to the regulator and the state will lose control over the situation as a whole.

Note that working within the framework of the IWG meeting, a protocol order was adopted to check all Freedom Finance Ukraine clients regarding their connection with sanctioned persons. In the study of this situation is important professional approach, because the assets should not return to customers associated with the citizens of the russian federation, the republic of belarus, sanctioned citizens of other countries, including Ukraine. Additionally, it was recommended to send the project for evaluation to the NACP, which was done earlier this week.

The draft law developed by the NSSMC deals with amendments to the Law on Sanctions in terms of the ability to regulate actions with the assets of clients of a sub-sanction professional participant in capital markets, the Law on the Depository System and the Law on Capital Markets. Since these issues are not currently settled at the level of the sanction law. Also, the amendments determine the possibility for a commercial bank in which an account of a sanctioned person is opened to transfer funds of its clients to institutions through which such funds will be returned (the National Depository, the National Bank and the Settlement Center).

It is important that the draft law does not change the procedure for applying sanctions to a legal entity and does not affect the state sanctions policy. It concerns only questions about the assets of clients and establishes a clear list of actions, deadlines for each of the involved participants in this process.

The management of the NSSMC has repeatedly emphasized that the only solution to the problem with Freedom Finance Ukraine clients is changes to the current legislation. Therefore, despite the loud accusations of inaction, the NSSMC, having an independent expert opinion and the support of professional institutions, proposed an effective mechanism for overcoming this situation. In the future, everything depends on the vision of MP’s and their will for quick legislative changes, which are so necessary for our affected citizens.

Recall that last year the NSDC imposed sanctions on Freedom Finance Ukraine LLC as a legal entity providing financial services. There have been no such precedents in the financial market in Ukraine. As a result, there was a situation when funds and securities of clients were blocked on the accounts of a Ukrainian legal entity, and there was no mechanism for their return by law.