The National Bank of Ukraine (NBU) in line with the Comprehensive Program of Ukrainian Financial Sector Development Until 2020 and considering numerous requests from market players has simplified FX conditions, as well as for executing arbitrage transactions on margin trading terms.

Please note that this covers arbitrage transactions for purchase/sale of foreign currency for another foreign currency, i.e. not involving hryvnia.

Thus, due to a series of measures that will expand capacities for executing arbitrage transactions banks will have the opportunity:

• to execute arbitrage transactions not only with foreign banks as before, but also with foreign non-bank financial institutions certified to execute FX operations and accountable to supervisory authorities;
• to transact such operations on the instructions of legal entities and sole proprietors, while previously these could only be transacted only on the instructions of individual customers;
• to enter into agreements for executing arbitrage transactions with other certified banks that already have established relations with foreign counterparties.
• to execute arbitrage transactions with a new instrument, i.e. investment metals.

Also a requirement is cancelled for banks to register arbitrage transactions rules with the NBU and a respective procedure guiding such registration.

Measures for simplifying FX conditions among other things will enable international financial institution (IFI) to purchase or sell foreign currency from any Ukrainian bank of choice and not just from the bank the mentioned institution has an account with.

Additionally, a provision is cancelled according to which purchasing the 1st Group foreign currencies for loan repayment was allowed only under the condition that the lender has also transferred foreign currencies of the 1st Groupto the loan account.

A requirement committing banks to register customer forward FX transactions in the System for Confirmation of Interbank FX Market Deals is cancelled.

The highlighted measures will promote opportunities for certified banks to execute arbitrage transactions and will make such operations accessible to an increasing number of clients, as well as streamline procedures for FX and investment metals trading. Furthermore IFI will be given the option to choose the optimal exchange rate for purchasing or selling foreign currency from Ukrainian banks.

Respective amendments are prescribed by NBU Resolution No. 143, dated 26 December 2017, On Amendments to Some Regulatory Documents of the National Bank of Ukraine. The resolution comes into effect from 2 January 2018.