Financial sector news

The National Bank of Ukraine, with the aim of implementing Global Internal Audit Standards, has updated the requirements for the organization and implementation of internal audits in non-bank financial services markets, in particular in the insurance and payment markets, as well as in the credit union market.

The updated requirements stipulate that non-bank financial service providers are obliged to ensure the effective performance of internal audit functions in compliance with the Global Standards for Internal Auditing.

The possibility of revising the annual plan for internal audits in the event of significant changes in the activities of a non-bank financial services provider has been defined, the criteria for which must be specified in the institution's internal documents. In addition, the annual budget of the internal audit department may be included in the overall budget of the non-bank financial services provider to ensure the implementation of the strategy and effective performance of the internal audit function.

As part of its internal audit function, the internal audit department shall, in particular:

• develop and submit proposals for the annual budget of the internal audit department;
  
• assess the adequacy of resources for the implementation of the annual audit plan;
  
• assessing the effectiveness of internal audit in compliance with the Global Standards for Internal Auditing;
  
• ensuring the continuous professional development of the chief internal auditor and internal auditors, including by organizing their training.

At the same time, non-bank financial service providers are required to create conditions for the continuous professional development of the chief internal auditor and internal auditors, as well as to introduce a system of mandatory documentation of training results, in particular by storing certificates and other supporting documents.

Taking into account the Global Standards for Internal Auditing, non-bank financial service providers must have internal documents on internal auditing that define:

• the internal audit strategy;
  
• the order and procedures for conducting internal audits;
  
• the internal audit methodology;
  
• the procedure for organizing the internal audit function;
  criteria for determining significant changes in the activities of a non-bank financial service provider.
  

In addition, for financial payment service providers, the amendments prohibit the chief compliance officer from holding any other positions and performing other duties at such a financial payment service provider and/or other legal entities, except for combining this position with the function of a responsible employee for financial monitoring. This restriction does not apply to parent and subsidiary companies, companies that are members of a financial group, professional associations in the financial payment services market, or legal entities whose ultimate beneficial owner is the ultimate beneficial owner of such a provider.

In addition, the deadline for responsible actuaries of insurers to prepare interim (quarterly) actuarial reports has been extended to 45 days after the reporting date. In addition, the Regulations on the procedure for insurers to account for contracts related to insurance activities and requirements for the protection of insurers' information clarify the requirements for accounting for technical reserves under life insurance contracts in insurers' information systems.

The updated requirements provide for a transition period for their implementation: for the organization of internal audits of non-bank financial service providers — until September 30, 2026, and for the organization of compliance control functions of financial payment service providers — until May 31, 2026.

The changes were approved by resolutions of the Board of the National Bank of Ukraine, which will come into force on December 27, 2025.