The National Bank of Ukraine (the
"NBU") will no longer require that
Ukrainian banks obtain individual licences to invest abroad in
securities issued by certain foreign states and IFIs. Generally,
under Ukrainian currency control rules, any outbound investment
from Ukraine has been prohibited unless based on an NBU individual
licence. The relevant amendments became effective on 23 November
An investment will not be subject to the
licensing requirement if it meets all of the following
the bank holds a general currency licence
(not to be confused with individual licences) and is allowed to
engage in foreign currency transactions in foreign capital
the issuer is an international financial
institution or a G7 member and rated at least
"АА-"/"Аа3" by at least
two of Fitch, Standard & Poor's or
permitted instruments are debt securities
denominated in the currency of a G7 member, with the date of
repayment within five years from the date of their purchase by the
the bank may only purchase or sell such
securities from/to non-Ukrainian entities abroad.
The new exemption from the individual
licensing regime appears to apply only to banks trading for their
own account, ie their clients will still require NBU individual
licences to invest abroad even if such deals are brokered by a
Raising ECA-supported Loans
Another amendment relates to export credit
agency (ECA) covered financings to Ukrainian borrowers. NBU
regulations currently provide that the aggregate amount of payments
under a loan transaction, including interest and fees, cannot
exceed the maximum interest rate (MIR) set by the NBU. The MIR is
presently set at 9.8-11 per cent per annum depending on maturity
for fixed interest rate loans and 3-month USD LIBOR plus 750 bps
for floating interest rate loans.
Under the amended rule that becomes effective
on 30 November 2016, the fees payable to an ECA listed on the
OECD's official website, which must be reimbursed to a foreign
lender by a Ukrainian borrower under the terms of their loan
agreement, will not be counted towards the MIR. This will
effectively raise the MIR applicable to ECA financings and will
make such financings more accessible to Ukrainian borrowers.
Other Changes in Currency Control
In addition to the above amendments, the NBU
also allowed Ukrainian banks to trade for their own account in FX
derivatives traded on the Ukrainian exchanges, permitted assignment
of deposits placed with Ukrainian banks among foreign investors,
and made some other changes in the currency control rules.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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With effect from 18 April Jersey is introducing a new regime in respect of private funds - simplifying the regulatory regime, and extending the benefits of flexibility and speed across Jersey's private funds space.
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