The National Bank of Ukraine (NBU) has approved amendments to the Regulation On Depository and Clearing Activity and Settlement of Securities Transactions by the National Bank of Ukraine so that foreign investors have direct access to market debt instruments (save for government securities) for rebuilding Ukraine.
Specifically, as of 24 July 2024, the list of customers and depositors that the NBU can provide services to when performing its functions as a custodian will be expanded. In particular, the NBU will be able to open and service a nominal holder securities account for a foreign financial institution that meets the requirements of Ukrainian laws and a securities account for a foreign depository.
These amendments will create an infrastructure for inflows of foreign investment into Ukraine.
Opening of a nominal holder securities account for a foreign financial institution will link the infrastructures of the domestic and international financial markets to ensure inflows of foreign capital into Ukraine. This will open the way for foreign investments in financial instruments issued to rebuild the country. Those include local municipal bonds, infrastructure bonds, bonds of international financial organizations, and other debt financial instruments aimed at rebuilding Ukraine.
Also, the changes open the possibility of implementing the announced plans to expand the link with the international central securities depository Clearstream Banking Luxembourg.
The amendments will ensure implementation of the provisions of the Memorandum of Economic and Financial Policies with the IMF.
Creating mechanisms needed for foreign investors to directly access marketable debt instruments beyond government securities is in the focus of the program of the International Monetary Fund. The NBU and the National Securities and Stock Market Commission are working together to implement this initiative. Said amendments are intended to meet Ukraine’s commitments set out in the Memorandum on Economic and Financial Policies dated 17 June 2024. The first phase of measures to improve the capital markets infrastructure is underway.
Amendments were approved by NBU Board Resolution No. 90 On Amendments to the Regulation on Depository and Clearing Activity and Settlement of Securities Transactions by the National Bank of Ukraine dated 19 July 2024, which takes effect on 24 July 2024.
Clearstream established a link with the Ukrainian capital market through the NBU Depository in 2019. This gave foreign investors direct access to the local hryvnia-denominated government bond market. The NBU is currently expanding the range of instruments available to foreign investors through the international depository.