The procedure for terminating mutual investment institutions has been changed

National Securities and Stock Market Commission (NSSMC) is informing that the Resolution of NSSMC №318 dated 25.06.2020 On Approval of Amendments to Certain Legislation of NSSMC (On Cessation of Common Investment Institutions), registered in Ministry of Justice of Ukraine by №759/35042, №760/35043 dated 7 August 2020 entered into force from 25 June 2020. 

The document provides that the liquidation commission of collective investment scheme (CIS), that is in the process of liquidation at the effective date of this Resolution and has securities in its assets. Such securities have restrictions in depositary accounting system, as follows:

• there is a court order or decision of authority empowered by law or its official;
• there is Resolution of NSSMC, adopted upon the request of the authority empowered by law or its official;

• or there is the maturity of debt securities, set by the decision on emission/prospectus of securities, and non-fulfilment its obligations by the issuer of debt securities (non-payment of income from securities, outstanding securities, including non-payment of part or full face value of securities);
• when the issuer is in the process of liquidation, the term of which is over than the liquidation of Corporate Investment Fund/Share Investment Fund, the issuer has the right to perform settlements with the participants of such fund during three month from the date of entry into force of this Resolution. In addition, the issuer has the right to provide the documents on cancellation of the registration of fund securities issuance to the NSSMC on the following conditions: obtaining the consent of all the participants of the CIS on such settlements, performance of all activities preceding settlements of all participants of the CIS.

At the beginning of such procedure, it is necessary to add the documents, authenticated by the signature of the Chairman of the Liquidation Commission, to the written notice of NSSMC due to the adopted Resolution on liquidation of the CIS, such as:

• the copy of the report on the financial status of the CIS completed at the end of working day preceding the day of decision on liquidation;
• the copy of the certificate of net asset value of the CIS, calculated at the end of the working day preceding the day of decision on liquidation.

The NSSMC introduced the mechanism of settlements with all the participants of the CIS: how to realize (allocation)/repayment during the period of CIS liquidation under the written consent of all the participants of such CISs on performing these settlements. The mentioned mechanism provides that the Liquidation Commission implements all actions to that realization. It is necessary to provide the relevant documents to the NSSMC after finalization of each step of CIS cessation.

The  documents on removing the information about the CIS from the Registry is provided to the NSSMC during fifteen working days:

• from the date when NSSMC officials issue decision on cancellation of the registration of share issues of the CIS, the share issues prospectus and the cancellation of the certificate of share issues registration in case of securities absence in fund assets after cancellation of registration. Where appropriate restrictions in depositary accounting system of securities are not removed.
• from the date of close of CIS securities’ account in the depositary institution, which were opened by asset management company for purpose to service the CIS assets.

The Resolution was drafted with the aim to resolve problematic issues, relating to the cessation order of corporate investment fund and mutual investment fund.