Strengthened Oversight of Transactions in Ukraine’s External Government Bonds: Relevant NSSMC Committee Approves Draft Amendments

The Supervision and Control over the Function of Capital Markets and Organized Commodity Markets Committee of the NSSMC has approved a draft decision introducing additional rules for transactions involving Ukraine’s external government bonds (OZDP) during martial law.

The draft provides for the following amendments:

• Purchases and sales of OZDP will be carried out exclusively on a delivery-versus-payment (DVP) basis through a central counterparty;
• Depository institutions will be allowed to process transfers of title to OZDP only on the basis of an order or notification from the National Bank of Ukraine (NBU);
• A prohibition is introduced on write-offs and other actions that result in the withdrawal of OZDP from the depository accounting system;
• Investment firms must bring already concluded but unperformed agreements (including repo and exchange agreements) into compliance with the new requirements;
• The requirements will not apply to agreements where a bank acts in its own name and at its own expense.

To allow market participants to adapt their operations, the amendments are preliminarily planned to enter into force 30 calendar days after their official publication.

In the near future, the draft will be submitted to a meeting of the Commission for approval and further publication.