The International Monetary Fund (IMF) has recommended that Ukraine should enable the National Securities and Stock Market Commission (NSSMC) to conduct audits of any legal entity or individual to determine compliance with securities laws, demand and have access to information such as banking secrecy, and investigate violations on the capital market.
”We are addressing significant challenges faced by the National Securities and Stock Market Commission (NSSMC) in its role as the regulator of the Ukrainian securities market. These challenges include the issuance and trading of fictitious securities in the market and insufficient powers to conduct effective supervision,” reads the Memorandum of Economic and Financial Policies between Ukraine and the IMF, which was made public on Monday, October 3.
The Memorandum emphasizes that the NSSMC should have access to a larger and more stable source of funding. The NSSMC is currently funded only by means of budget funds.
Further, the NSSMC should have the ability to share with foreign authorities the information in the possession of the NSSMC or acquire such information on the foreign authorities` behalf to determine compliance with securities laws, as stated in the Memorandum.
It is also advised that Ukraine enhance the responsibility of the NSSMC and its staff for undue disclosure of confidential information.
As UNIAN reported earlier, in a July report of the IMF technical assistance mission, the Fund`s experts noted that the Ukrainian legal framework had significant gaps in terms of combating frauds and abuses on the securities market, as well as concerning information disclosures by issuers.
The IMF said Ukraine should bring its legislation in line with international standards to ensure that the NSSMC has sufficient tools to demand broader disclosures and more effective address market abuses.
