NSSMC for the year revealed securities transactions in the amount of UAH 20 billion, which were not related to attracting investments or carrying out investment activities. As a result of such transactions, their participants (intermediaries and clients) generated significant amounts of profit or loss due to unreasonable changes in securities prices.
As part of counteracting the violations identified, the Commission has temporarily suspended the license of 12 securities traders, with a view to a thorough examination of the circumstances of the case. As a result of consideration of cases, the Commission authorized persons were sanctioned against the following securities traders: Navigator Invest LLC, NVP Magister LLC, RK Pridneprovie LLC, Stock Depository LLC, FC Oberig LLC, LLC AFT, LLC Source Source LTD, Technology Management LLC, Spread LLC, FC Socrates LLC, Benefit Brock LLC, FC Avangard LLC, FC Oris Capital LLC, Expert Capital JSC , FC Corner LLC.
The clients of the above dealers were mainly limited liability companies, the number of which reached hundreds.
The Commission also prohibited trading or stopped making changes to the depository circulation system for those issues of securities that were the subject of those transactions because their circulation posed significant risks. In particular, the sanctions were applied to the Unit Venture Closed-End Non-Diversified Investment Fund “Guaranteed Income”, PJSC “Marshall7”, PJSC “Promethei Telecom”, PJSC “IC“ Authority ”, PJSC“ FC “Credit Service”, PJSC “Agrofinance”, PJSC “Ukrbudenergotechnology” Guta-Ukraine Insurance Company, JSC FC Agroholding Polissya JSC, JSC Life Insurance Company JSC, JSC Dem Ddi, JSC Health Insurance Company, JSC ESC, Concord Inc. PJSC, Closed-End Non-Diversified Venture Mutual Investment Fund “Esko-Premium”, PJSC Novyuenergo, PJSC FC AOA Investments, PJSC Red Red, PJSC Lika Logistics and others.
These abuses consisted in the fact that the intermediaries for the clients carried out the transactions, ignoring the requirements of the legislation on risk assessment and investment and tax consequences. As a result, the securities that were the subject of transactions were bought and sold with artificial overpricing or underpricing. The volume of such operations reached hundreds of millions of hryvnias, and in some even billions. At the same time, even a cursory analysis of the financial statements of the issuers showed that there is no economic justification for such value. In addition, neither the intermediaries nor their clients were able to explain at the request of the Commission the reasons and purposes of such operations. As a result, merchant customers bought and sold securities that did not meet market value. The Commission considers that these transactions were conducted for the purpose of generating artificial profits or losses that are not compatible with the objectives of the investment activity.
The result of the Commission's work in this direction is obvious - the volume of such transactions has decreased significantly. One reason for this decline is that securities traders have begun to more thoroughly check the quality of the subject matter of the contract and assess the risks. Those who came to the securities market to resolve their own financial issues unrelated to investment activities realized that their actions would no longer go unnoticed.
A securities trader is not only a formal institute required to conduct a securities transaction and receive an appropriate remuneration, but is also a professional participant who must honestly evaluate the consequences of their own actions and the actions of clients in order to prevent abuse and use. stock market for incompatible purposes.