Eng 
Укр February innovations of the NBU: focus on non-bank financial institutions, optimization of currency restrictions and strengthening the resilience of the financial system
During February 2024 year, the main attention of the National Bank was focused on improving regulatory basis for regulation of non-banking financial companies. In addition, several documents were adopted in the direction of optimization of currency restrictions. The list of systemically important banks was also approved and updated The procedure for determining legal entities critically important for the functioning of the economy and ensuring the livelihood of the population in a special period for the purpose of booking conscripts for the period of mobilization and wartime.
The main directions of regulatory activity of the NBU in February:
- Improving the regulatory framework for the regulation of non-banking financial companies:
- Amendments to Resolution No. 177 of August 12, 2022 on the peculiarities of registration and licensing of non-banking financial institutions.
- Optimization of currency restrictions:
- Amendments to Resolution No. 18 of February 24, 2022, which provide the possibility of cashless exchange of Russian and Belarusian rubles, clarify the grounds for completing currency supervision of residents' compliance with the settlement deadlines for humanitarian aid import operations.
- Amendments to Resolution No. 18 of February 24, 2022, which specify the conditions for the purchase of foreign currency by businesses and the specifics of currency supervision for the settlement deadlines for export transactions.
- Other questions:
- Update of the list of systemically important banks.
- Update of the Procedure for determining legal entities critical for the functioning of the economy and ensuring the livelihood of the population in a special period for the purpose of booking conscripts for the period of mobilization and wartime.
February 2024 was marked by the NBU's active work on improving the regulatory environment. Focusing on non-banking financial companies shows the regulator's desire to develop and diversify the financial market. Optimization of currency restrictions is a step on the way to liberalization and free exchange rate formation. Updating the list of systemically important banks and the Procedure for determining legal entities critically important for the economy testify to the NBU's proactive position in matters of ensuring the stability and stability of the financial system
The full list of innovations in the regulatory framework with concise comments is provided in the appendix to this material. The review was prepared by the Analytical Group of AUB under the leadership of Dilyara Mustafaeva.
The main normative documents of the NBU adopted during February 2024< /p>
| Name of Resolution/document | No | Date of acceptance | Essence | Purpose/impact on BSU | |
| 13 | 02.02.2024 | Changes were made to of the document "On the peculiarities of the application of procedures for registration and licensing of non-bank financial services market participants during the period of martial law and amendments to the resolution of the Board of the National Bank of Ukraine dated March 6, 2022 No. 39" The changes mainly relate to the procedure for assessing the financial condition of legal entities and individuals who are the owners of a significant share in a non-banking financial institution | Update of the regulatory act | ||
| 14 | 02.02.2024 | The document establishes prudential requirements for credit unions, in particular:
Credit unions will have time to bring their internal regulations in line with the new requirements until July 1, 2024. At the same time, in order to ensure a smooth transition of the credit cooperative market to the new requirements for the structure of regulatory capital and prudential standards, until December 31, 2024, the unions must adhere to the existing standards and at the same time carry out a test calculation of the standards in accordance with the new requirements. Full transition to meeting the new requirements - from January 1, 2025. | Implementation of the norms of the Federal Law "On Financial Services and Financial Companies" and "On Credit Unions" regarding increasing the efficiency of corporate management in credit unions, ensuring their stable operation and timely fulfillment of obligations | ||
| On approval of the Regulation on requirements for the credit union management system | 15 | 02.02.2024 | The regulation on requirements for the management system of the credit union determines:
The Regulation on requirements for the credit union management system provides for a transition period for credit unions to organize the management system according to the new rules until June 30, 2024, while the requirements of this Regulation regarding the classification of credit unions into the category of significant according to the established criteria will enter into force on January 1, 2025 . | Implementation of the norms of the Federal Law "On Financial Services and Financial Companies" and "On Credit Unions" regarding increasing the efficiency of corporate management in credit unions, ensuring their stable operation and timely fulfillment of obligations | |
|
On approval of the Regulation on the reorganization and liquidation of the credit union by decision of the general meeting of members of the credit union | 16 | 02.02.2024 | Regulations on the reorganization and liquidation of the credit union by decision of the general meeting of the members of the credit union regulates the procedure for voluntary exit from the market and defines:
The procedure for the voluntary termination of the credit union, started before the entry into force of the Regulation on the reorganization and liquidation of the CS, will be completed in accordance with the requirements of the legislation that was in force before the entry into force of the Regulation. | Implementation of the norms of the Federal Law "On Financial Services and Financial Companies" and "On Credit Unions" regarding increasing the efficiency of corporate management in credit unions, ensuring their stable operation and timely fulfillment of obligations | |
| On amendments to the resolution of the Board of the National Bank of Ukraine dated February 24, 2022 No. 18 | 17 | 02/05/2024 | NBU, in compliance with the law (No. 3498-IX), which entered into force on December 24 last year, provided the possibility of cashless exchange of Russian and Belarusian rubles held in the bank accounts of non-sanctioned clients. Such a one-time exchange is possible until the end of 2024. In addition, the National Bank specified the grounds for the correct completion by banks of currency supervision over residents' compliance with the deadlines for settlements established by the NBU for the operations of the import of humanitarian aid imported into Ukraine, starting from December 1, 2023. | Determining the peculiarities of the functioning of monetary and currency markets in the conditions of martial law | |
| On approval of the Amendments to the Regulation on the organization and conduct of inspections | 18 | 06.02.2024 | The changes expanded the rights of inspectors, in particular, they are granted access to documents, "including remote access using information and communication technologies." In addition, the document was supplemented with a clause regarding the rights of inspectors to be present at general meetings of bank participants, meetings of the bank board, bank board and bank committees, as well as at meetings of collegial bodies of bank group participants. | Improving the procedure for conducting NBU inspection checks | |
| On providing clarifications and recommendations on financial monitoring | No. 25-0005/9103 | 06.02.2024 | In the letter, the regulator emphasized that banks and non-banking institutions should apply risk-oriented approach when working with national politically significant persons (Politically Exposed Persons, PEP) and to have a dynamic risk management system, which will allow to quickly identify, analyze information about PEP and take adequate measures regarding this category of clients. At the same time, the regulator provided recommendations for financial institutions to ensure that they properly apply a risk-oriented approach to PEP. Also, in the letter, the National Bank provided a list of signs that may indicate the influence of a politically significant person, what this person may still have, and what may be factors to increase the level of money laundering/terrorist financing risk of this category of clients.
Separately, the NBU drew attention to the need to conduct training of employees, which must include issues regarding the application of a risk-oriented approach to customer service, including PEP, and ensuring compliance with internal procedures by subjects of primary financial monitoring in the field combating money laundering/terrorist financing. | In compliance with Order No. 3419-IX of October 17, 2023 | |
| 19 | 02/09/2024 | Amendments were made to the Regulations, the requirements of which apply to insurers (reinsurers), insurance (reinsurance) brokers, credit unions, pawnshops, other financial institutions whose registration or licensing is carried out by the NBU, postal operators that provide financial payment services and/or postal transfer services, and/or services for carrying out currency operations, payment system operators, branches or representative offices of foreign economic entities that provide financial services on the territory of Ukraine, other legal entities that are not legal entities financial institutions, but provide separate financial services. | Improving the procedure for the application of influence measures by the National Bank of Ukraine, presenting requirements for violations of legislation by institutions in the field of financial monitoring | ||
| 20 | 15.02.2024 | According to the results of 2023, the NBU will require the insurer to provide not only a report on the audit of financial statements, but also an additional report with detailed information on the approaches, methods and results of the auditor's analysis of the quality of the insurer's assets. The new Regulation also establishes:
Submission of an additional report on the insurer for 2023 is aimed at checking the state of assets that will be used for the calculation of regulatory capital according to the new rules, as well as confirming that the insurer has documents on ownership rights and assessing the size of assets. The list of assets about which additional information will be required includes, in particular, real estate, securities, funds in the bank and receivables that are not overdue. The auditor must submit the additional report to the National Bank no later than June 30, 2024. Approval of the Regulation and fulfillment of the requirements for the preparation of an additional report by the auditor is the first step in the direction of conducting a full-fledged regular assessment of the quality of assets (AQR) of insurers. Its implementation will take place after insurers bring their activities into compliance with the new requirements stipulated by the Law of Ukraine "On Insurance" and relevant regulations of the National Bank. | Assessment of the quality of assets of insurance companies | ||
| 21 | 16.02.2024 | The National Bank of Ukraine has updated the procedure for determining legal entities that are critical for the functioning of the economy and ensuring the livelihood of the population in a special period with the aim of booking conscripts for the period of mobilization and wartime. Corresponding changes to the Regulation concern insurers and companies that support the automated banking systems of systemically important banks for the execution of operations in the SEP of the NBU. The updated procedure enables providers of such software support services to apply to the National Bank to identify them as critical, and the National Bank to consider the relevant application and make a decision:
Changes regarding insurers provide for defining them as important for the branch of the national economy or meeting the needs of the territorial community according to current criteria only in the case of a decision of the National Bank on compliance of the ownership structure of the respective insurer with transparency requirements. | Reservation of conscripts for the period of mobilization and for wartime. | ||
| On amendments to the resolution of the Board of the National Bank of Ukraine dated February 24, 2022 No. 18 | 22 | 16.02.2024 | The NBU updated currency restrictions in the insurance sector. In particular, changes were made to certain regulations of the Board's resolution "On the operation of the banking system during the introduction of martial law", which refer to restrictions on currency transactions in the insurance sector. Yes, from February 20, 2024:
· clarifications have been made regarding new classes of insurance, new requirements for solvency capital and minimum capital established by the Regulation on establishing requirements for ensuring the solvency and investment activities of the insurer, approved by the resolution of the Board of the National Bank of Ukraine dated December 29, 2023 No. 201. The terminology used in the Law on Insurance has also been clarified; · brought into compliance with the requirements of the Law on Financial Services and the Regulation on the Authorization of Financial Service Providers and the Conditions for Their Performance of Financial Services Activities, approved by the Resolution of the Board of the National Bank of Ukraine dated December 29, 2023 No. in the List of insurers. | Bringing the regulatory document into compliance with the legislation of Ukraine | |
| 23 | 19.02.2024 | Changes were made to Appendix 6 of the Instructions. Also 1 was excluded Item 7.8 Chapter 7 of Chapter III. A number of NBU documents related to financial reporting were also recognized as having lost their validity | Bringing the legal act of the NBU into compliance with the Taxonomy of UA XBRL IFRS of 2022 and the requirements of Directive 2013/34/EU of the European Parliament and of the Council of June 26, 2013 | ||
| On amendments to the resolution of the Board of the National Bank of Ukraine dated February 24, 2022 No. 18 | 24 | 20.02.2024 | The National Bank optimizes a number of currency restrictions. Yes, from February 21, 2024, changes in a number of areas will be implemented. Firstly, the conditions for buying currency by business have been clarified. Currently, for calculations in foreign currency, the business must first use the foreign currency available to it, and then, if necessary, buy it on the currency market of Ukraine. Foreign currency transactions are also available to enterprises on the terms of "swap" for the purchase and sale of foreign currency, if the first part of the transaction involves the purchase of foreign currency by the bank from the client. So that the relevant operations are not used to circumvent the current currency restrictions, the NBU specifies the conditions for the purchase of currency by enterprises. So, from February 21, when buying foreign currency by businesses, banks will take into account not only funds in foreign currency placed on the client's current and deposit accounts, but also information about the client's unfinished foreign exchange transactions with banks on the terms of "swap", according to which the first part was carried out operations (from the sale of the bank's foreign currency by the client). For this purpose, on the date of purchase of foreign currency, legal entities will need to provide the bank with information about the foreign currency sold by them under the first part of foreign currency transactions on the terms of "swap" (currency, term of the transaction) according to unfinished agreements with banks. It will be provided additionally, along with information about available funds in foreign currency on current and deposit accounts. Secondly, the specifics of currency supervision by banks regarding the settlement deadlines for export operations have been clarified. Currently, there is a rule according to which banks can complete currency supervision of compliance by residents with the deadlines for settlement of export operations after the funds received from a non-resident for goods have been credited to the resident's current account in the bank, if these funds were transferred from abroad. In order to stimulate the return to Ukraine of foreign exchange earnings for the export of goods, the NBU specifies the specifics of currency supervision by banks. Starting from February 21, banks will be able to complete currency supervision of relevant transactions only if the funds from a non-resident are received in foreign currency. Instead, remittances in hryvnias will not be grounds for ending the bank's currency supervision. | Prevention of unproductive capital outflow to protect Ukraine's international reserves and preserve the stability of the foreign exchange market | |
| No. 66-rsh | 28.02.2024 | The size of the adjustment coefficients by types of assets (property), which are accepted by the NBU as security for the fulfillment of obligations under refinancing operations and direct repo operations, operations under contracts for the storage of cash reserves, was approved. | Implementation of standard tools for regulating the liquidity of the banking system and the organization of cash circulation in Ukraine | ||
| On amendments to the decision of the Board of the National Bank of Ukraine dated June 22, 2020 No. 417-rsh | No. 67-rsh | 28.02.2024 | Subparagraphs 1, 2 of paragraph 2 of the decision of the Board of the National Bank of Ukraine dated June 22, 2020 No. 417-rsh "On approval of the amount of coverage of interest rate swap operations by the guarantee fund and adjustment coefficients for assets (property) forming the guarantee fund" were changed | Improving the conditions for the NBU to conduct interest rate swap operations with banks on the interbank market | |
| On the definition of systemically important banks | No. 70-rsh | 29.02.2024 | With this document, the NBU updated the list of systemically important banks. The list includes: A-Bank Credi Agricole Bank Kredobank OTP Bank Oschadbank Bank "Pivdenny" PrivatBank PUMB Raiffeisen Bank Sense Bank TASkombank Ukrgasbank Ukreximbank Ukrsibbank Universal Bank |
|
