Derivatives and netting reform in Ukraine

01/ 09/ 2020

On 16 August 2020, the Law of Ukraine “On Amendments to Certain Legal Acts to Attract Investments and to Introduce New Financial Instruments” (the “Law“) became effective. The Law introduces a wide range of reforms, including a derivatives reform and a corporate bond reform. It also implements the “Markets in Financial Instruments” Directive 2014/65/EU, dated 15 May 2014, and introduces other significant changes for the Ukrainian capital market. In this alert we provide a general overview of the derivatives and netting reform, briefly discuss procedure of close-out netting (the one of the key elements of the reform) and its enforceability pre- and post-insolvency and summarise the rules on security and title transfer collateral arrangements. We also touch upon certain local law issues relevant for the derivatives, such as capital controls, and describe our expectations as to the future developments in the sector. The drafting of the derivatives reform was supported by the European Bank of Reconstruction and Development (EBRD), with Sayenko Kharenko as its Ukrainian legal counsel, and prepared in consultation with the International Swaps and Derivatives Association (ISDA). Read more →

On 16 August 2020, the Law of Ukraine “On Amendments to Certain Legal Acts to Attract Investments and to Introduce New Financial Instruments” (the “Law“) became effective. The Law introduces a wide range of reforms, including a derivatives reform and a corporate bond reform. It also implements the “Markets in Financial Instruments” Directive 2014/65/EU, dated 15 May 2014, and introduces other significant changes for the Ukrainian capital market.

In this alert we provide a general overview of the derivatives and netting reform, briefly discuss procedure of close-out netting (the one of the key elements of the reform) and its enforceability pre- and post-insolvency and summarise the rules on security and title transfer collateral arrangements. We also touch upon certain local law issues relevant for the derivatives, such as capital controls, and describe our expectations as to the future developments in the sector.

The drafting of the derivatives reform was supported by the European Bank of Reconstruction and Development (EBRD), with Sayenko Kharenko as its Ukrainian legal counsel, and prepared in consultation with the International Swaps and Derivatives Association (ISDA).

Read more →