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Parliament Approves Important Changes in NBU Activities

Parliament Approves Important Changes in NBU Activities

The National Bank of Ukraine welcomes the Ukrainian parliament’s decision to adopt in the second reading and as whole the important legislation on the central bank’s activities (draft law No. 5850).

On 19 October 2021, 255 members of parliament voted for the Law of Ukraine On Amending Certain Laws of Ukraine Concerning Certain Issues Related to the Activities of the National Bank of Ukraine.

“We thank members of the Verkhovna Rada of Ukraine for passing the law aimed at improving certain aspects of the central bank’s activities. I am sure that implementing the changes envisaged in the new law will have a positive effect on the NBU’s operations and corporate governance. It will provide us with more financial independence, and will enable us to make the best use of all the mechanisms to manage foreign exchange reserves and become more effective and professional in this area,” commented NBU Governor Kyrylo Shevchenko.

The main goal of this law is to improve the internal governance and functioning of the central bank, in particular the procedure for cooperation between the NBU Council and the NBU Board. The law also tightens the requirements and sets limitations with regard to persons appointed to the positions of NBU Council members, the NBU Governor, and deputy governors. Provisions of the law fully comply with best practices of corporate governance and global standards of central bank management.

Furthermore, the law aims at improving the efficiency of managing foreign exchange reserves. In particular, it clarifies and updates some terms and definitions, lifts unnecessary restrictions on the NBU’s transactions with international reserves, expands the list of the NBU’s potential counterparties, and regulates transactions with derivatives and repurchase transactions.

The law also regulates and updates certain points that need to be adjusted as the NBU took on more functions in nonbank financial services regulation, currency regulation and supervision, and control and regulation of cash circulation.

At the same time, today the parliament also adopted another two related laws that will contribute to the comprehensive implementation of the Law of Ukraine On Amending Certain Laws of Ukraine Concerning Certain Issues Related to the Activities of the National Bank of Ukraine and will create a complete legal framework for implementing provisions of these laws:

  • Law of Ukraine On Amendments to Article 3 of the Law of Ukraine on Public Procurement as Regards Purchasing Legal Services by the National Bank of Ukraine (draft law No. 5852)
  • Law of Ukraine On Amendments to Article 33 of the Budget Code of Ukraine as Regards Clarifications to Information Submitted by the National Bank of Ukraine for the Purpose of Compiling the Budget Declaration (draft law No. 5853).

 

 

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