Protection of investors’ rights: NSSMC initiates discussion of legislative changes on the activities of managers of the stock exchange with industry participants

At a meeting of the NSSMC Committee on Financial and Credit Mechanisms for Construction and Mortgage, the draft Law of Ukraine No. 12024 on Amendments to Certain Laws of Ukraine Regarding the Activities of Housing Construction Fund Managers was considered.

The authors of the draft law propose to amend the relevant laws to provide for the following
– providing an opportunity to change the status of CFF manager to a developer,
– revision of the requirements for the authorised capital of CFF managers (construction financing funds),
– introduction of a mechanism for the succession of the rights and obligations of the previous customer in contracts for engineering networks,
– excluding the possibility of reducing the preliminary scope of the construction order.

Arsen Ilin, Commissioner, is convinced that market participants and the regulator support the need for changes to this instrument, but first of all, it is necessary to ensure all existing guarantees to protect investors’ rights, in particular in the part related to the change of the status of the CFF manager to the developer. After all, the nature of legal relations with these participants is different, and accordingly, the work processes and responsibility for citizens’ funds are also different.

All of this has a significant impact on the ability to implement these rules in practice without creating additional risks for investors.

As the NSSMC seeks to discuss these changes in a transparent manner and assess potential risks together with the industry participants, we will conduct a survey among real estate licensees. Our experts will analyse the proposals in detail, and, for its part, the NSSMC will pass them on to the authors of the draft law for further consideration.

In addition, additional consultations with lawyers and attorneys representing investors will be held in the near future.

‘I hope that as a result, we will get a high-quality mechanism that will work effectively in the market and develop this industry,’ Arsen Ilin concluded.