On July 15, 2015, the National Bank of Ukraine, jointly with the Ministry of Finance of Ukraine, the National Securities and Stock Market Commission and the European Bank for Reconstruction signed a Memorandum of Understanding in the area of development of the Ukrainian local capital markets.

 The main aim of the Memorandum is to enhance cooperation and dialogue between Ukraine and the EBRD to foster the development of local capital markets in Ukraine, thus encouraging foreign investments to Ukraine.

The Memorandum identifies the following main areas of future cooperation:

• upgrading the assessment of the Ukrainian capital market needs carried out by the EBRD in 2011;
• promoting the mobilization of capital into Ukraine’s economy;
• upholding the development and improvement of the settlement-depository infrastructure, developing new capital markets instruments as an alternative to those offered in the banking sector, including securitisation and collateralized bonds (secured bonds);
• determining the strategy to foster liquidity and trading in capital market  instruments, including the analysis of issuance processes and shaping the yield curve;
• providing further support in developing the regulatory framework governing the financial derivatives market, as well as strengthening the capacity of regulatory authorities, judicial authorities and market players;
• upholding the development of the regulatory framework to enable international financial institutions, including the EBRD, to issue bonds in Ukraine.

On behalf of the National Bank of Ukraine the Memorandum was signed by Deputy Governor of the National Bank of Ukraine Oleh Churii.

According to Oleh Churii, this document opens additional opportunities for the development of the local capital markets and enables Ukraine to receive support, methodological Guidelines or technical assistance from the EBRD.

“The National Bank of Ukraine welcomes signing of the Memorandum and efforts by the EBRD to foster the development of capital markets in Ukraine. This is one of our priorities in reforming the country’s financial market, which is underpinned by the Comprehensive Program for the Development of Ukraine’s Financial Sector till 2020,” underlined the Deputy Governor of the National Bank of Ukraine.

For reference

In 2010, the EBRD launched the Local Currency and Capital Markets Initiative aimed at stimulating local currency lending and promoting the development of local capital markets.  The Initiative was intended to mobilize domestic funding sources, thus reducing reliance on foreign-currency lending and consequently mitigating foreign currency risks associated with it.

Within the framework of the Initiative, it was suggested that in order to anchor mutual intentions on strengthening the capital market in Ukraine to enter into the Memorandum of Understanding between the National Bank of Ukraine, the Ministry of Finance of Ukraine, the National Securities and Stock Market Commission and the European Bank for Reconstruction with regard to cooperation in the area of development of the Ukrainian local capital markets.