Analysis of the Draft Law:
Greetings. As a lawyer with 15 years of experience, I have analyzed the submitted draft amendments to the Law of Ukraine “On State Regulation of Capital Markets and Organized Commodity Markets.” A detailed analysis is provided below.
1. Essence of the Draft Law
The draft law is aimed at a fundamental change in the institutional status and management model of the National Securities and Stock Market Commission (NSSMC). The main goal is to change the subordination of the Commission: from an agency subordinate to the President, it is transformed into a central executive body with special status, established by the Cabinet of Ministers of Ukraine. A two-tier management structure (the Council of the Commission and the Commission as a collegial body) is also being introduced to strengthen the independence and effectiveness of supervision.
2. Structure of the Draft and Main Changes
The draft substantially revises Article 6 and related provisions of the Law. The main changes include:
* Institutional change: Transition from a presidential vertical to the model of a special executive body established by the Cabinet of Ministers of Ukraine.
* New structure: The Council of the Commission (supervisory body) and the Commission (executive body) are introduced. This is a separation of functions between those who make strategic decisions/supervise and those who directly exercise regulation.
* Competitive procedure: The mechanism for appointing the Chairperson and members of the Commission has been fundamentally changed — it is now an open competition, organized by the Council of the Commission, with appointment upon the proposal of the Cabinet of Ministers of Ukraine.
* Liquidation of the Budget Council: Functions of budget control, approval of estimates, and audit are transferred to the new Council of the Commission.
* Detailing of requirements: The list of qualification requirements for members of the Commission and restrictions regarding conflicts of interest has been significantly expanded.
3. Main provisions important for stakeholders
For various interest groups, these changes are of critical importance:
* For legislators and experts: A system of checks and balances is being created within the regulator. The presence of the Council of the Commission, which includes independent members, and mandatory external audits increase the accountability of the body.
* For business (market participants): A clearly defined and transparent process for forming the Commission’s leadership reduces political risks. Changes in the structure of the Commission’s office and territorial bodies aim to optimize administrative processes. It is important that the Commission has been granted a clear right to apply to the court to protect its rights.
* For citizens: The transparency of competitions for positions and the mandatory publication of the minutes of the Competition Commission meetings increase trust in state institutions.
* Remuneration and independence: The draft enshrines the principles of “personnel autonomy,” which allows for setting remuneration conditions aimed at attracting specialists from the market, while bonuses for management are placed under the control of the Council of the Commission, which is a mechanism for preventing abuse.
Summing up, the project is aimed at professionalizing the regulator through the introduction of a supervisory board, moving away from direct presidential management in favor of government control, and introducing strict anti-corruption filters for personnel selection.
Analysis of the Explanatory Note:
Greetings. As a lawyer with 15 years of experience, I have analyzed the text you provided of the explanatory note to the draft law on reforming the National Securities and Stock Market Commission (NSSMC). Below is a concise professional breakdown of the situation.
1. Essence of the Draft Law
The draft law provides for a fundamental change in the management model of the NSSMC by introducing a two-tier structure: the creation of a supervisory body (the Council of the Commission) and an executive body (the Commission itself). This model is intended to clearly delineate strategic planning, supervision, and control from day-to-day regulatory activities, as well as to change the procedure for forming the leadership team through open competitive procedures.
2. Why is this being proposed?
The key driver of the changes is the fulfillment of Ukraine’s international obligations to the IMF under the Extended Fund Facility (EFF) program. The authors emphasize that the current model, where a collegial body simultaneously develops strategy, exercises supervision, and manages personnel, is ineffective and vulnerable. To receive future tranches of financial assistance from international partners, Ukraine must demonstrate the institutional independence of the regulator, transparency in decision-making, and strengthening of internal control.
3. What does this mean in practice?
For business, legislators, and citizens, the consequences of this step are quite significant:
* For the market and investors: An increase in the level of trust in the regulator is expected. The presence of independent members on the Council of the Commission and the introduction of an internal compliance and audit system should minimize corruption risks and reputational losses, which is critical for attracting capital.
* For public finances: The neutrality of the changes for the budget is important. The author notes that the reform does not require additional expenditures: the costs of new members of the Council are covered by reducing the number of executive staff of the Commission.
* For the management system: A clear hierarchy is introduced: the Council approves the strategy and monitors its implementation, while the Commission as an executive body deals with direct regulation. This deprives the current leadership of a monopoly on making personnel and strategic decisions.
* For lawmakers: This is the fulfillment of a “structural benchmark,” which is a critically important indicator of the success of cooperation with the IMF. Failure to adopt this law by December 2026 could jeopardize the macroeconomic stability of the state.
Summing up: We see an attempt to “Europeanize” and “depoliticize” the regulatory body, turning it into a more transparent and accountable institution. From a legal point of view, this is a classic step for bringing the activities of an executive body into line with international corporate governance standards.
Analysis of Other Documents:
Greetings. As a lawyer with many years of experience, I have analyzed the materials you provided regarding the Draft Law of Ukraine “On Amendments to the Law of Ukraine ‘On State Regulation of Capital Markets and Organized Commodity Markets'” (regarding the improvement of the functioning of the NSSMC). Here is my analysis.
1. The author’s position on the draft law
The author of this document is the Cabinet of Ministers of Ukraine, represented by Prime Minister S. Koretskyi, which indicates full official support and initiation of this draft law by the government. The document is submitted as an integral part of a legislative initiative aimed at implementing procedural and organizational transformations to realize the NSSMC reform.
2. Main provisions and their significance
This list is a roadmap that demonstrates exactly how the government plans to institutionally change the work of the Commission. For understanding, it is important to highlight the following points:
* Change in management structure (Council of the Commission): The draft law introduces a fundamentally new body — the Council of the Commission, which receives broad supervisory and control functions. It will not only elect the Chairperson and members of the Commission but will also control internal audit, compliance, and risk management. This is an attempt to minimize the influence of external factors on the operational activities of the regulator.
* Competitive transparency: The document clearly states that a separate Competition Commission is created for the appointment of key persons (the Chairperson and members of the Commission, independent members of the Council). This significantly increases the requirements for the professional reputation of candidates and makes the appointment process more public and accountable.
* Budgetary and personnel autonomy: An important innovation is the transfer of the right to approve the maximum number of employees and the bonus procedure to the Council of the Commission. This gives the regulator tools to build an effective motivation system, independent of general government procedures, which is characteristic of bodies with special status.
* Time limits for the reform: The government has clearly defined tight deadlines (from 3 to 6 months from the moment the law enters into force) for the adoption of subordinate acts (CMU resolutions, regulations, codes of ethics). This indicates an intention to carry out the transformation at a fairly rapid pace.
Conclusion for business and experts: The draft does not just “cosmetically” change the status of the NSSMC, but actually creates a system of “checks and balances” within the regulator. For the market, this means a more predictable, professional, but at the same time significantly stricter model of supervision through the introduction of the institution of internal compliance and audit, which report directly to the Council of the Commission.
