Rules-based market: NSSMC won a court case on illegal exchange market activity

Activities on capital markets must be based on strict compliance with established rules, which is ensured by appropriate regulatory oversight by the NSSMC. The Commission consistently and in full measure executes its control function, preventing unlicensed activities on the territory of Ukraine.

A vivid example of this is the court case concerning the Universal Commodity Exchange “Kontraktovyi Dom UMVB.” As a result of a lengthy court process, the Administrative Court of Cassation upheld the legality of the regulator’s actions and recognized that the exchange had been operating without a proper license. It also emphasized that licensing of activities related to the organization of centralized trading, regardless of the type of product, is mandatory.

We would like to draw the attention of market participants to the key conclusions of the Supreme Court:
• The decisive factor for the status of an organized commodity market is not the type of product traded (e.g., gas, agricultural products, or metals), but how the trading takes place — whether it complies with the requirements of law and the officially registered rules of the exchange.
•⁠ ⁠Any centralized trading of exchange-traded commodities on a commodity exchange is considered to be an activity on an organized market in accordance with legislation in force.

The decision regarding the UTB “Contract House UMVB” is final and not subject to appeal. The full text of the Supreme Court’s decision (registration number 126961410) is available following the link.

The NSSMC emphasizes the importance of licensing as a mandatory prerequisite for legal activity on capital markets. At the same time, it calls on market participants to be aware of the risks associated with non-compliance with generally binding rules.

For convenience, a special section has been created on the Commission’s official website where you can find the current licensing conditions.

We remain open to constructive dialogue with market participants and the public, adhering to the principles of legality, fairness, and the rule of law. A level playing field is the key to transparency, trust, and security in the financial sector.