The National Bank of Ukraine has established a procedure for local government authorities to place municipal bonds on the stock exchange on Free of Payment terms (FOP).
The amendments were approved by resolution #70 by the Board of the National Bank of Ukraine on the approval of amendments to the regulation on the conduct of depository and clearing activities and ensuring the settlement under securities transactions by the NBU dated 25 June 2018. The amendments enter their legal force on 26 June 2018, the National Bank of Ukraine announced on its website, Interfax-Ukraine reports.
Previously, the regulation on the conduct of depository and clearing operations and ensuring the settlement under securities transactions by the National Bank of Ukraine regulating the Depository’s municipal bonds trading, prescribed placement of municipal bonds only over-the-counter.
That means that in order to improve the accessibility of lending resources for local government authorities, the National Bank of Ukraine has amended the regulation and authorized the NBU Depository to allow such operations. First of all, the new legislation defines the operating procedures for the National Bank Depository, stock exchanges, issuers and depository institutions on placement of municipal bonds on the stock exchange.
Secondly, the new law regulates the procedure for interactions between the National Bank Depository and the stock exchange during the placement of municipal bonds on the stock exchange. Thirdly, the newly adopted law amends the chart of balance sheet accounts and the list of depository entries, which allows municipal bonds’ placements can be reported in custodial accounting.
