Sunday10 November 2024
g-novosti.in.ua

The National Commission on Securities and Stock Market will resend a draft law to the Parliament to address issues faced by "Freedom Finance" clients.

The National Securities and Stock Market Commission of Ukraine (NSSMC) will send a draft law to the relevant parliamentary committee proposing amendments to the law "On Sanctions." This initiative aims to address the issue of funds belonging to clients of the sanctioned broker "Freedom Finance Ukraine," which have been frozen for two years. This information was shared by the NSSMC following discussions on the matter during a committee meeting on October 11.

The National Securities and Stock Market Commission of Ukraine (NSSMC) will send a draft law to the relevant parliamentary committee to amend the law "On Sanctions," in order to address the issue of client funds that have been blocked for two years due to sanctions imposed on the broker "Freedom Finance Ukraine," the NSSMC reported following a discussion on this matter at a committee meeting on October 11.

"Once again, the Commission attempted to convey the point that no decisions made by the regulator supersede the provisions of the special law 'On Sanctions.' Therefore, the only way to resolve the problem of blocking the assets of clients of 'Freedom Finance Ukraine' is to amend the existing legislation," the regulator indicated.

The NSSMC emphasized that the issue of sanctioned entities providing financial services is much broader than the situation with "Freedom Finance." Only the adoption of a law can systematically address the consequences of sanctions on the financial institution.

The Commission also urged the initiative group of clients of the sanctioned broker, which had previously accused the NSSMC of inaction, to reach out to the regulator "for a more detailed discussion of all issues and fruitful cooperation."

In turn, the initiative group informed the Interfax-Ukraine agency that during a working group meeting in the committee, initiated by Member of Parliament Olha Vasyliivska-Smahliuk, a report was also presented by the acting head of "Freedom Finance," Oleksandr Bondarchuk, who was appointed by the Commission in June of this year.

The group believes that due to negligence and incompetence of the NSSMC, clients of "Freedom Finance" – holders of Ukraine's eurobonds were unable to participate in the voluntary exchange of eurobonds in August of this year, resulting in a loss of a cash reward of 1.25% of the exchanged eurobond amount and new bonds of part "B" maturing in 2035-2036 at a rate of 12.65% of the amount of their bonds.

According to the group, representatives of the parliamentary committee and other invited ministries and organizations confirmed the possibility of transferring the assets of clients of the sanctioned broker to other brokers for servicing, as the sanctions were imposed on "Freedom Finance," not on individual investors, while the NSSMC holds a different view.

Representatives of the clients of the sanctioned broker also reminded that the regulator previously justified its refusal to revoke the license of "Freedom Finance" by citing the risk of losing accounting documents and securities registers. However, during the working group meeting, Bondarchuk and NSSMC head Ruslan Mahomedov stated that all information, reports, and registers are currently available.

"Therefore, there are no obstacles to revoking the license, but there is no liquidation of the company. However, the NSSMC refuses to do this without explaining the reasons for its decision," the initiative group believes, arguing that in the event of the liquidation of the sanctioned broker, its clients would be able to retrieve their assets.

Additionally, the group asserts that the Security Service of Ukraine has denied the regulator's claim that the Commission is collaborating with the SBU to verify and coordinate the mechanisms for transferring investors' assets.

Another complaint from affected clients is that "the NSSMC was unaware that under their supervision and the management of the acting head of 'Freedom Finance,' a sanctioned Cypriot structure 'Freedom Finance' operates in the interests of the sanctioned beneficiary Freedom Holding Corp., Timur Turlov."

"The decision is now passing to the Office of the President so that it can assess the actions of the members of the NSSMC and head Mahomedov. Based on the working group meeting, the VRU committee will initiate a decision to organize a meeting on this issue, involving representatives of the National Security and Defense Council, the Office of the President, and other state bodies, to develop solutions both with and without the participation of the NSSMC," the initiative group stated in a comment provided to the Interfax-Ukraine agency.

As reported, clients of "Freedom Finance" accuse the NSSMC of inaction, particularly for refusing to support draft law No. 11263 "On the Protection of the Rights of Clients of Sanctioned Professional Market Participants," which was prepared by members of the relevant parliamentary committee and received a positive evaluation from the National Bank.

The Commission, for its part, rejects the accusations and claims that as early as 2023, it developed and submitted for consideration a draft law to the people's deputies that amends three laws of Ukraine – on sanctions, on the depository system, and on capital markets, and also appointed an acting head of "Freedom Finance Ukraine" in June of this year.

Committee head Danylo Hetmantsev criticized the NSSMC again at the "Dialogues with NV on the Future. Business and War" forum on October 2 in Kyiv regarding the situation with the broker.

"What is happening with 'Freedom Finance' is … a disgrace, it is terrible that the regulator cannot resolve this issue for so many years, cannot, does not want to. I do not know what is happening at the top, but this is definitely not how it should be," emphasized the committee head.