Arsen Ilyin about NEXT-UA: It is important for us to take into account the market position, because this structure is for them

Today, interest to the topic of creating a universal hub in Ukraine for trade in energy, agricultural and financial assets is not fading. The government has already signed a Memorandum of Understanding with international partners and identified the responsible bodies that will work on the NEXT UKRAINE project (National Capital and Commodity Exchange). Many questions arise, because the idea is quite ambitious for the Ukrainian capital market and is of interest to market participants. StockWorld.com.ua decided to investigate this issue in detail and talk to Commissioner Arsen Ilyin.

SW: You are from the new NSSMC team, and the NSSMC has been working on the project before you took the office.Whether something has changed in the project, or the idea remained the same?

AI: The main points and the idea remain the same, Ukraine has the opportunity to get a modern platform that will be adapted to the life of the Ukrainian market structure. This may be a whole new stage in the history of our financial system, but it remains to be seen.

The previous leadership had its own vision of these developments. But our team evaluates the situation objectively and we understand that it is too early to talk about the result of this project, its essence and form.

SW: The Memorandum has already been signed, what is happening now?

AI: Yes, the basis for launching this project is Memorandum of Understanding between the government of Ukraine and donor organizations. We are talking about an agreement to create a basis for further cooperation of all stakeholders in the process. The process of feasibility study is currently underway.

SW: What is the essence of this feasibility study?

AI: In the nearest future, detailed analytical work will be carried out. Its result will be the optimal model and understanding of the commercial viability of the project. Given that we seek integration with existing market infrastructure, it is necessary to see the big picture, assess all opportunities and risks.

SW: What are the next steps?

AI: The analytical approach itself already involves gathering information. Therefore, in parallel with the first stage, a number of working consultations and meetings of all stakeholders of the project will be held, such as donors, the private sector, regulators, government officials and others. It is necessary to gather enough information and analyze it effectively to achieve the desired result.

SW: Have you discussed the idea of ​​creating a project with market participants?

AI: We expect and look forward to cooperation and involvement of existing participants in the financial, currency and commodity markets. It is important for us to take into account the position of the market, because this structure is proposed primarily to expand their opportunities in the future.

SW: What do you plan to get from working on the project at the end of the year ? Are there any deadlines?

AI: Terms of work are specified in the Memorandum. It is planned that by the end of the year analytical work and consultations will be carried out, as well as a feasibility study will be prepared. One of the stages should be the development of a project implementation plan and the creation of an appropriate project management unit.

SW: Trade in energy, agricultural and financial assets is considered. What else can be included in this list?

AI: These are the main markets that are being considered for this project. The wood market can also be included in this basket. But here it should be noted that the main criterion for any product that could potentially get on such a trading platform is the standardization of the product and its compliance with the Law of Ukraine 738-IX on Capital Markets and Organized Commodity Markets.

SW: Do you have any expectations from the model of such a project?

AI: In the future, such a platform may provide market participants with the opportunity to hedge their risks trading with a central counterparty, use derivatives, which will greatly benefit both Ukrainian and international manufacturers and traders, and can significantly increase market liquidity. The model should be based on reliable legal and modern technological components, as well as proper regulation.

Source: StockWorld