The President of Ukraine Viktor Yushchenko signed a law “On Securities and Stock Market”, adopted by the Supreme Rada on February, 23 2006. Its adoption will promote the formation of a more open and liquid stock market.     

The law codifies the provisions of legislative acts considering stock market and aims at harmonizing them with the European legislation and the Civil Code.

The law determines emission prospects for open (public) and closed (private) distribution of securities. From now on the shares can only be of registered type and may be issued by joint-stock companies exclusively.

Besides, the law improves the regulation of professional activity aspects at stock markets. The law introduces tougher requirements for the statute assets of the professional stock market participants. According to the new law, dealers are to possess a statute fund of no less then 120 thousand hryvnias (as contrasted to the current 17 thousand), the limit for brokers is 120 thousand (currently 3,4 thousand), underwriters are to have no less then 600 thousand hryŭnias. Moreover, they must be the members of a corresponding organisation, one for each type of stock market activity. 

A minimum of twenty people is required to originate a stock exchange. All of them must be the sellers of securities, possessing of a licence to effect professional activity at the stock exchange. A stock exchange may also be grounded by a community of securities’ sellers of no less than 20 members. The law exacts that a share of a single seller of securities is not to exceed 5 percent of the stock exchange statute fund.

Stock exchanges, in their turn, are to sustain an own (non-statute) capital of 3 million hryvnias, which will be 6 million if clearing operations are carried out.

The law contains the requirement for stock issuers to reveal the information. It obliges them to reveal in public media the information as per the holders of more than 10 percent of the issuer’s capital. The issuer is to publish quarterly reports, while yearly ones are to be out of print by April, 30.  

The law introduces the notion of insider information and touches upon the issues of its usage. Besides, the law regulates the issues of fraudulent stock market advertising. It is forbidden for state bodies to place advertisement at stock exchange, except for the cases when it has to do with placing of state securities.