Effective as of 28 December 2017, new rules and requirements for obtaining by non-bank financial companies (“Financial companies”) of a general license for carrying out of operations in foreign currencies (the “General License”) were introduced by the National Bank of Ukraine (the “NBU”).
Such new rules and requirements are yet to be tested in practice as they provide for just a few liberalized requirements while mostly tightening previous rules and procedures.
The new rules envisage for the following key novelties:
Equity capital: Differentiated equity capital requirements have been introduced for financial companies and depend on the type of the company’s operations and services. The minimum equity capital requirement equals to UAH 5 million and applies to financial companies carrying out business activities at the securities market.
Experience record: Financial company is now required to carry out the relevant operations in UAH (except for currency exchange services) for at least 1 year prior to applying for the General License (instead of previous 3-year mandatory period).
Law compliance: Financial company is required to keep its record clean of any violations of the NBU regulations, AML/CTF laws, currency control regulations and laws on financial services, as well as of any sanctions in respect of the aforesaid laws and regulations, for at least 1 year before applying for the General License.
Business reputation: The rules introduce business reputation requirements applicable to a financial company, its officials and shareholders/beneficiaries whereby previous employment, links and relationships with insolvent, problem and/or sanctioned banks or financial companies would result in failure to achieve necessary business reputation record.
Ownership structure: Financial company is required to disclose information on the ownership structure when applying for the license and on an annual basis afterwards. The ownership structure, inter alia, shall be subject to transparency requirements, providing for no trust and/or cycle ownership structures.
Financial condition: Financial company is required to submit 3-year business plan outlining its financial condition and complying with other applicable requirements (such as having at least UAH 1,000,000 to execute first year terms set out in the business plan, having no outstanding tax debts etc.).
The period for consideration of the application for General License by the NBU is now increased up to 2 months and may be suspended by the NBU for up to 30 days at its discretion.
Financial companies already holding a General License should:
- By the end of February 2018 – submit to the NBU information on financial condition and monetary obligations, business reputation of officials and shareholders/beneficiaries; and
- By the end of June 2018 – bring activities in compliance with the requirements envisaged in the Resolution and report such compliance to the NBU.