Reformation in the in the sphere of non-bank financial institutions: new rules
For a long time the following trend has been observed at the financial services market: non-bank financial institutions take over some of the bank’s functions and with increasing frequency provide related services. This is due to a simpler regulatory framework and working conditions of the banking sector.
In such conditions, the regulator of the non-banking financial sector does not keep up with the duties assigned to it due to the imperfection of the legislative base and the lack of necessary mechanisms of influence. It so happened that most financial institutions are in one way or another connected with the owners of Ukrainian banks, which negatively affects competition within the market relations of the financial sector.
In connection with this situation, in the summer of 2015 an idea in the form of a bill started up to create a single financial market with one powerful regulator who would be able to fully and comprehensively carry out the functions of close control assigned to it. This is the so-called "SPLIT". The new regulator was supposed to be the National Bank of Ukraine (NBU).
Such a decision back in 2015 had a number of problems and shortcomings. The old law on the "mega-regulator" had apparent flaws in the form of:
- lack of understanding by the NBU if the mechanism of functioning of non-banking institutions;
- negative practices of the NBU with financial institutions during the “sweeps” in the past;
- the lack of a comprehensive regulatory framework that would set the key vectors of the financial market;
- the presence of a number of by-laws and regulations;
- the lack of a system of “containment and balances” (according to the concept of 2015, the same body had to issue, control, implement and apply sanctions to market participants).
All of the above factors led to the opposition of financial services entities to the new system. However, the old problems of the “inactive" system of control and regulation of the financial services market did not disappear. In addition, today there is also pressure from the so-called international partners, which only strengthens the need for changes and bringing the legislation to working and adequate working conditions.
What changes are happening today in the financial services market and how to secure your business during this period?
From 2018 to the present time, a conceptually new bill has appeared that sets the following positions:
- maintain the old financial services market by carefully controlling it, and not limiting it;
- move away from the concept of regulation by subordinate regulatory legal acts and create a single law that would set the main directions of work;
- introduce the European operational experience, referring to the practical experience of the EU countries and take into account the mistakes of its predecessors.
However, as practice shows, the so-called "letter of the law" does not always correspond to its "spirit", therefore it is not known what changes await entrepreneurs in the financial services market. If you want to protect your business and enter into the financial services market in advance, we advise you to contact the experts.
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