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USAID Capital Markets Project
Legal and Regulatory Reform of Capital Markets / Overview



Capital Markets Regulatory and Supervisory Framework
(Institutional Strengthening)

Capital Markets Infrastructure

Legal and Regulatory Reform of Capital Markets

Pension Reform

Financial Instruments Development
Electronic System of Comprehensive Information Disclosure (ESCRIN)
Pilot Project on Implementation of ESCRIN
Hotline On Pension Reform Issues HOTLINE on
Pension Reform

The legal and regulatory area of the Capital Markets Project is designed to provide legal advice and legislative drafting support for the two main areas of the project:

1) Pensions
    Pension reform is designed to meet the World Bank model of the three Pillar system. The Law of Ukraine on Non-State Pension Provision, the third Pillar for voluntary pensions, was passed in July 2003 and is currently being amended to conform more closely to international standards. The Draft Law on Amending the Law of Ukraine on Non-State Pension Provision is being prepared for consideration by the Verkhovna Rada in the second reading. A separate Draft Law on Occupational Pensions provides for the transfer of the retirement provision for those persons that work in hazardous working conditions to Pillar III at the expense of employers’ pension contributions in favour of such persons. The Draft Law on Pillar II is also currently in the Verkhovna Rada being prepared for the second reading. All draft laws are expected to be passed sometime in 2008. See the Pension Reform section for a more detailed explanation.
    Current regulations related to the operation of the pension system are being re-drafted, such as the calculation of NAV, number of units, unit value and account balances. New regulations are also being drafted in such areas as advertising, disclosure, reporting, licensing and enforcement. New regulations will also be drafted in the areas introduced by the new laws or amendments.

2) Capital Markets
    Capital markets reform is driven by the expected influx of investment money due to the anticipated contributions to the new Pillar II. All affected laws and regulations are being amended or re-drafted as a result of the reform of the operation and structure of the system in order to meet international standards and with an eye to EU accession. See separate sections for details of reform of infrastructure and regulatory and supervisory framework

Legal and regulatory reform includes:
    Laws and regulations on the structure and operation of the exchanges and the areas of trading, disclosure, reporting, etc.
    The depository system and the related areas of registrars, clearing and settlement, cross-border relations, currency exchange, etc.
    Regulations regarding the re-structuring and re-licensing of the system and operation of SROs .
    In certain areas, such as derivatives, new laws are being drafted.

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