News (#10 October 2016)

Draft

New functions for the National Bank of Ukraine

The Verkhovna Rada has registered Draft Act No. 4993 from 14 July 2016, which provides for creation of a special register of persons who have lost their impeccable business reputation. The project’s author, Ukrainian MP Pavlo Rizanenko, proposes to amend the On the National Bank of Ukraine Act and to entrust maintenance of such registry to the NBU. In Article 7 it is proposed to establish maintenance of the said register as one of functions of the National Bank, and Article 55, which deals with the objectives and scope of banking supervision, should be complemented by parts 4 and 5, in which registry essentials are disclosed as well as persons that shall be entered therein are determined.

Under current legislation the National Bank receives information about whether the business reputation of a specific group of persons is impeccable, which is important for approval of their nominations to positions of heads of banks or owners of substantial shareholdings in them.

The procedure for maintenance of the registry, inclusion in it and exclusion from it of persons who have lost their impeccable business reputation is determined by normative legal acts of the NBU. Once the Act comes into force the NBU will have three months to create the said register and to develop appropriate regulatory legal acts.

 

Participation of shareholders in joint stock company management

The Parliament has registered the Draft Act On Amendments to Certain Legislative Acts of Ukraine regarding Settlement of Issues on Participation of Shareholders in a Joint Stock Company Management.

The aim is to resolve the issue on participation of shareholders in the management of joint stock companies, who by 12 October 2014 had not exercised their right to transfer shares owned by them to securities accounts in the depository system. The Draft provides for:

— Amendment of the On Joint Stock Companies Act of Ukraine with the new Article 69-1 in order to predict the consequences of repurchase of outstanding shares by a joint stock company;

— Amendment of Clause 10 Section VI Final and Transitional Provisions of the On Depository System of Ukraine Act with a regulatory standard in terms of setting the limits to all other rights on securities to holders, who by 12 October 2014 had not exercised their right to transfer shares owned by them to securities accounts in the depository system;

— Amendment of Section VI Final and Transitional Provisions of the On Depository System of Ukraine Act with new Clauses 10-1, 10-2 and 10-3 with respect to:

— Anticipating the update procedure by the owner (heir or legal successor of the owner) of accounting its right to securities and rights under such securities, which were limited in accordance with Clause 10 Section VI Final and Transitional Provisions of the On Depository System of Ukraine Act;

— Anticipating securities recognition mechanism accounted for on a separate account at the Central Securities Depository and repurchased by the issuer, if the owner (heir or legal successor of the owner) shall not take advantage in the course of one year of the proposed update procedure of accounting its right to securities and rights under such securities;

— Issuer’s obligations to pay the owner (heir or legal successor of the owner) the market value of securities which are considered for repurchase;

— Anticipating the peculiarities of update procedures application by the owner (heir or legal successor of the owner) as of its rights under securities, for whose circulation there is a restriction (encumbrance).

 

On the High Council of Justice Draft Act

The Draft Act On the High Council of Justice was approved at a meeting of the Council on Judicial Reform held on 6 September 2016. After some technical and editorial improvements it will be sent to the President of Ukraine for its subsequent introduction to the Parliament.

As noted by Deputy Head of the Presidential Administration, coordinator of the Council for Judicial Reform, Oleksiy Filatov, judicial reformers work on the creation of implementing legislation necessary for execution constitutional innovations in terms of justice, which are scheduled to come into force on 30 September of this year. In addition to the Draft Act On the High Council of Justice, a Draft On the Constitutional Court of Ukraine is being developed.

Amendments to the Constitution provide for establishment of the High Council of Justice, which is a collegial, independent, constitutional body of judicial self-government, present in the Ukrainian justice system to ensure formation and operation of judicial manpower, compliance with the law and ethics in activities of judges and prosecutors. As the main authority in matters of judicial careers, the High Council of Justice shall decide on the appointment, dismissal and transfer of judges; provide consent to temporary detention of a judge, custodial detention or arrest; decide on suspension of a judge from justice, on bringing a judge to disciplinary responsibility.

 

Cancellation of company seals for business

On 8 September the Ukrainian Parliament adopted Draft Act No. 4194 On Amendments to Certain Legislative Acts of Ukraine Regarding Use of Seals by Legal Entities and Individual Entrepreneurs.

To the Civil Code, instead of a short article that an economic entity “may have seals”, it is proposed to introduce its restated version, according to which an economic entity has the right to use seals in its activities. Regardless of whether an economic entity actually uses seals in its activities, a seal should not be mandatory requisite element of any document, which is filed on behalf of the company to bodies of state authority or of local self-government. The Draft provides for administrative responsibility for forcing the affixing of a seal impression on official document by a state body or local self-government body, or for refusal to accept a document without a seal, prompting a fine in the amount of 50-100 non-taxable minimum incomes.

 

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