UKRAINIAN STOCK EXCHANGE
2003 can be characterized in general as a
successful year for the Ukrainian Stock
Exchange (USE). During the year we have
observed the growth of the country’s economic
status with a GDP greater than 8%. The USE
maintained its position in the market, but did
not improve Exchange activities in comparison
with the previous year.
Valentin Oskolsky
Chairman of the Board
Legislation innovations in
2003 are expected to be
fruitful and facilitate
results in 2004 as
activities increase in the
market.
Positively viewed, legislation innovations in
2003 are expected to be fruitful and facilitate
results in 2004 as activities increase in the
market. The most important events included the
adoption of the new civil and economic codes.
These codes are meant to both regulate and
improve the workload of business
professionals. Parliament also adopted the law
“On Hypothec”, to smooth the way toward
bringing hypothecary securities to the market.
In addition, new and attractive conditions for
institutional investors have been created.
Therefore, per the new pension law, private
investors will now be given a reduction up to
13% in income tax.
The USE is actively working on the progress of
technology trading, and today the Exchange
uses electronic trading and its applications.
According to new Ukrainian legislation, the USE
is working on a program to apply electronic
turnover reporting and digital signatures.
However, the USE has not made technological
progress its only goal as we are still very much
aware of the absence of a secondary market.
The principal Ukrainian market segment is the
primary market mostly, comprised of
privatization, which has successfully passed
through the USE. We are now concentrating
our efforts on developing a secondary market
as well as providing services.
I believe that the chosen strategy of the USE
will lead us to the formation of a transparent
and liquid investment securities market in the
Ukraine.
During the year, the Securities and Stock
Market State Commission (SSMSC) adopted
legislation to regulate the issuance of bonds.
By the end of the year, the SSMSC adopted
corporate governance recommendations. We
continue to work toward positive growth by
taking all these changes into consideration.
HISTORY AND DEVELOPMENT
The Ukrainian Stock Exchange (USE) is a
pioneer in the capital market of the Ukraine,
created by the law “On Securities and the Stock
Exchange”, and registered by decision of the
Cabinet of Ministers on 29 October 1991. The
USE is a closed joint-stock company with an
authorized capital divided into 222 ordinary
nominal shares belonging to legal entities. In
1997, according to the law “On State
Regulation of Securities Market in the Ukraine”,
the Securities and Stock Market State
Commission re-registered the USE. Since June
1998 the USE has been a self-regulated
organization. There are 114 registered
brokerage companies as USE members as of
1 January 2004. The USE has 5 branches in the
largest Ukrainian regions. In 1993, the USE
became a pioneer of money privatization and
implemented the exchange mechanism of price
creation.
The USE is a member of the Coordinating
Council for the functioning of securities markets
charged by the President of Ukraine. It also is a
member of the Consulting and Experts Council
in the Securities and Stock Market State
Commission, the Ukrainian Chamber of
Commerce and Industry, the Board of
FUTURE OUTLOOK
Economists’ Union of the Ukraine, the Academy
of Economic Science and the Academy of
Engineering Science of the Ukraine, the Board
of Ukrainian Council on Economic Education
and the Ukrainian Community “Intelligence of
the Nation”.
The USE has created many educational
programs in association with the Slavonic
University.
The official publication, “Hermes”, can be found
in the daily newspaper, “Business Ukraine”.
Plans for the USE in 2004 include:
• implementation of the System of Electronic
Trading (SET);
• expansion of SET to include secondary
market turnover and the trading of state
bonds;
• regulation and infrastructure development of
a derivatives market;
• greater participation in the privatization
processes through the implementation of the
State Privatization Program and the law “On
the State Budget of the Ukraine for 2003”;
• further improvement in technology for the
trading in state-owned shares of privatized
companies;
• promotion aimed toward attracting direct
national and foreign investments in
strategically important industry companies for
privatization;
• implementation of electronic statistical
reporting and the digital signature per the new
Ukrainian legislation;
• development of an Exchange information
center with the expansion of publications and
scientific, methodical and educational
activities in order to prepare specialists for the
capital market; and
• strengthening of international cooperation
with foreign stock exchanges and international
financial organizations.
FEDERATION OF EURO-ASIAN STOCK EXCHANGES YEARBOOK 2003/2004
PAGE 91