The State Securities and Stock Market Commission of Ukraine has adopted a new edition of the Regulation on the clearing activity which ensures Delivery Versus Payment (DVP) settlements.
The implementation of this system is aimed at broadening opportunities for the securities market. It is necessary that control under such transactions is made by a specialised clearing bank which has not yet been created in the Ukraine.
The new regulation guarantees the settlement of the transactions on the organised market on the DVP basis. This scheme minimises the risks and allows the making of settlements, taking into account the world-wide practice. The new regulation has been sent for registration to the Ministry of Justice in Ukraine.
According to the Ukraine Stock Market participants, it is not possible to totally implement this scheme over a short period of time, even with the efforts of two Depositories (MFS & NDU) who already have a license to provide commercial activity. The Depository MFS currently has a license to provide clearing activity, but is unable to use it.
“The clients do not want to use the mechanism of clearing where securities and funds cannot be settled in one place,” says a spokesman for SEB. “The representatives of the NDU proposed to give this function to the CSD. In spite of the fact that the creation of the CSD is foreseen by the draft Law on the system of the depository record, the NDU and MFS still cannot agree on the conditions of its creation.”