1. ABS – New Markets
Ukraine

2. 2 ABS – New Markets
Ukraine
A special note about Ukraine
To our knowledge, no foreign securities have ever been offered and sold into Ukraine. We have
included this segment as we are seeing increasing interest in Ukraine and Ukrainian investors as a
potential emerging market and source of liquidity and funding. Recently new local regulation on
circulation of foreign securities in Ukraine was adopted to set forth requirements for foreign
securities in order to be admitted for trading in Ukraine. However, the practical implementation of
the new rules is still to be tested. This new piece of legislation is intended to allow to sell
securities of a foreign holding of a group of companies located in Ukraine.
Fact pattern
This scenario considers a UK RMBS master trust structure (a UK SPV Issuer, ultimately backed
by a pool of UK collateral) admitted to trading on the UK regulated market and cleared through
Euroclear and Clearstream clearing systems. Denominations will be “wholesale” (that is,
denominations of EUR 100,000 (or equivalent) and above) and will be targeted at wholesale and
professional investors in each jurisdiction.
Questions
A – Currency requirements (for Sterling, Non-sterling, Local currency)
B – Marketing and Offering requirements
C – Investors: Who can you issue to?
D – Issuing entity: Are there any restrictions on the type of entity?
E – Selling restrictions: A sample selling restriction
© Clifford Chance, June 2015

3. ABS – New Markets 3
Sterling
Summary: Foreign securities sold to
Ukrainian nationals by a foreign
issuer/seller outside Ukraine may be
offered to Ukrainian buyers without
completing any registration / filing /
notification requirements in Ukraine.
However, the Ukrainian buyer must
obtain a licence from the central
bank (the National Bank of Ukraine
(the “NBU”)).
Foreign securities can be marketed
and sold in Ukraine only on stock
exchanges. Trading of foreign
securities in Ukraine is subject to
registration with the National
Commission on Securities and the
Stock Market of Ukraine (the
“Securities Commission”) and
completion of other local
regulatory requirements.
Additional information:
Sales of foreign securities outside Ukraine to Ukrainian investors (that is, to
Ukrainian individuals and legal entities incorporated in Ukraine): Securities issued
by foreign companies and sold outside Ukraine may be offered to Ukrainian buyers
without registration with the Securities Commission or completing any other registration /
filing / notification requirements in Ukraine. However, in order to accept such offers and
purchase the securities issued by foreign companies and sold outside Ukraine, potential
Ukrainian buyers must first obtain an individual licence of the NBU for investing abroad.
Obtainment of such licence may be complicated in practice.
Offers and sales of foreign securities in Ukraine to Ukrainian investors: Foreign
securities can be offered in Ukraine only on stock exchanges. In order to be admitted
to trading in Ukraine securities issued by foreign companies (the “Foreign Securities”)
must be registered with the Securities Commission and must comply with the
following requirements:
n A foreign issuer of the Foreign Securities must be duly registered in its relevant jurisdiction;
n The Foreign Securities must be registered in the jurisdiction of incorporation of their issuer
or a jurisdiction of a foreign stock exchange where such securities are traded (as
applicable) and such securities must be offered abroad;
n The Foreign Securities must be listed on at least one of foreign stock exchanges
approved by the Securities Commission, including, amongst others, New York, Tokyo,
Hong Kong, Frankfurt or London; and such Foreign Securities should have sufficient
liquidity; and
n The Foreign Securities which are offered in Ukraine must receive an international
identification number (ISIN);
n The Foreign Securities must be accounted on the correspondent account of the National
Depository of Ukraine opened with a foreign depository;
n A foreign issuer of the Foreign Securities must own some assets in Ukraine;
n A foreign issuer must have an agreement with a Ukrainian stock exchange, provided that
such Ukrainian stock exchange has access to the information about such foreign issuer.
Securities Commission is allowed to establish the amount of the Foreign Securities
which may be offered in Ukraine. Such amount may be decreased or increased by the
Securities Commission at the written request of the foreign issuer.
A. Currency requirements – Are there any specific requirements in relation to offering securities
denominated in the following currencies into the jurisdiction?
© Clifford Chance, June 2015

4. 4 ABS – New Markets
Summary: See above. Only public
offering of foreign securities on Ukrainian
stock exchanges is allowed. Registration
with the Securities Commission would
be required.
Additional information: In practice, foreign securities are not offered in Ukraine.
For securities issued by foreign companies and offered outside Ukraine, please note the
requirement for an individual licence of the NBU for Ukrainians (that is, Ukrainian individuals
and legal entities incorporated in Ukraine) investing abroad, as described above.
B. Marketing and offering requirements – Will any documentation or filings be required to offer
wholesale debt securities?
C. Investors – Who can you offer and sell to? Are there any selling or marketing restrictions in
relation to types of investors?
Summary: Ukrainian law differentiates
between client types for the purposes
of determining their capacity to enter
into certain types of financial products
and services.
Generally, the currency control and
other rules described in this Client
Brochure, including, but without
limitation, the requirement to obtain an
individual license for investing abroad,
would apply to all types of Ukrainian
investors, including banks and financial
institutions.
Apart from including relevant
representations, warranties and
undertakings, we recommend verifying
the capacity and authority of the
Ukrainian investor to purchase foreign
securities in each particular case
because a lack of capacity may be a
ground for invalidation of the
transaction, irrespective of the
governing law of the contract or a
selected jurisdiction outside of Ukraine.
Additional information:
The major types of Ukrainian investors which a UK issuer may be dealing with in Ukraine are:
1) Banks: Ukrainian banks are allowed to enter into those transactions which are listed
in their banking licence and in its general currency licence issued to the respective
Ukrainian bank by the NBU.
2) Financial Institutions (which are not banks): A Ukrainian legal entity registered
as a financial institution with the Financial Services Commission of Ukraine may enter
into the transaction permitted by their licence.
3) Corporate Entities and Ukrainian individuals:
(a) Ukrainian corporate entities and private individuals have general legal capacity,
i.e. they may conduct any activities not prohibited by law or company’s charters.
(b) Any transactions with Ukrainian securities must be entered into through a
Ukrainian licensed securities broker.
4) Government Bodies and State Owned Entities:
(a) Ukrainian government authorities and bodies enjoy special legal capacity and
are permitted to carry out only those activities which are expressly allowed by
the legislation governing activities of such body or entity.
(b) Entering into any transaction with a governmental body or state owned
enterprise may require additional approvals from certain governmental authorities
or administrations.
(c) Ukrainian law limits such governmental body’s or state company’s capacity to freely
dispose of certain assets.
© Clifford Chance, June 2015

5. ABS – New Markets 5
(d) Ukrainian law requires that where (i) government and municipal authorities, (ii)
companies in which the shares owned by the State of Ukraine constitute more
than 50% of the charter capital, and (iii) companies in which more than 50% of
shares are owned by the companies in which the shares owned by the State of
Ukraine constitute more than 50% of the charter capital, purchase goods and
services partially or fully with funds from the state budget, they should comply
with the special procurement procedures (usually, bidding process encouraging
competition among the service providers), provided that the price for such
goods and services exceeds UAH 100,000 (approx. EUR 10,000).
(e) Insolvency or enforcement against state-owned entities or certain categories of their
assets may be prohibited.
5) Investment and Pension Funds:
(a) The assets of the Ukrainian investment funds and private pension funds can
comprise funds (including foreign currencies) and securities, but may not
comprise derivatives (which is often interpreted to mean stock traded derivatives)
and foreign securities.
(b) Ukrainian law also imposes certain limitations on the activities of the asset
management company managing an investment fund’s assets, prohibiting any
asset management company from purchasing derivatives and certain types of
securities.
(c) Moreover, an asset management company is not allowed to create a security
interest over any assets of the investment fund to secure obligations not related
to the activity of such investment/pension fund.
6) Institutional Investors: Under Ukrainian legislation, institutional investors include
investment and pension funds, mutual funds of investment companies, non-state
pension funds, funds under bank management, insurance companies and other
financial institutions which provide financial services on behalf of third parties at their
own expense or at the expense of such third parties as well as at the expense of the
attracted funds for the purpose of receiving profit or preserving the value of the
assets. Management of the assets of such institutional investors can be performed
only by special asset management companies on the basis of the licence from the
Securities Commission.
Are there any limitations or prohibitions applicable to any classes of investors (e.g. maximum exposures to individual
issuers/sectors or tax/fiscal rules)?
Yes. Additional information: As mentioned above, any purchaser of foreign securities will
need to obtain an individual license of the NBU.
© Clifford Chance, June 2015

6. 6 ABS – New Markets
Yes. A foreign issuer whose foreign securities are offered and sold in Ukraine must have assets located in Ukraine.
D. Issuing entity – Are there any restrictions on the type of issuing entity? e.g. Offshore SPV
See above. Under Ukrainian law the Securities Commission is allowed to limit the amount of Foreign Securities which may be
offered in Ukraine. Such limit may be decreased or increased by the Securities Commission at the written request of the foreign
issuer. In order to register Foreign Securities in Ukraine, a foreign issuer must submit to the Securities Commission a set of
documents, including its financial statements and audit reports, information on its shareholders who own more than 25 per cent of
its share capital, documents confirming that a foreign issuer owns some Ukrainian assets, etc. In addition, we believe it would be
advisable to mention licence requirements in the offering documentation. To our knowledge, no foreign securities have yet been
offered in Ukraine.
E. Sample selling restriction –
© Clifford Chance, June 2015

7. ABS – New Markets 7
Clifford Chance contacts
© Clifford Chance, June 2015
Olexiy Soshenko
Counsel
T: +380 44390 2213
M: +380 952826113
E: olexiy.soshenko@cliffordchance.com
Dmytro Orendarets
Senior Associate
T: +380 44390 2217
M: +380 952826126
E: dmytro.orendarets@cliffordchance.com
Maria Tsabal
Lawyer
T: +380 44390 2214
M: +380 952826114
E: maria.tsabal@cliffordchance.com

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