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New rules of financial services licensing: simplified conditions of the license

New rules of financial services licensing: simplified conditions of the license
    City Kiev

    New licensed conditions of implementation of economic activity on provision of financial services (except professional activity in the security market) were approved by the Order of the Government No. 913 of December 7 and came into force on December 10, 2016. The license on provision of financial services can be obtained quickly and cheap. Unless, of course, all documents are in order.

    According to Licensed conditions, the licensing authority issues licenses for such types of financial services:

  • providing of borrowed money, including credit and financial conditions;
  • attraction of financial assets with an obligation to follow their return;
  • services in the sphere of insurance regarding carrying out the specific types of insurance determined by the legislation;
  • services in system of accumulative provision of pensions regarding administration of non-state pension funds;
  • property management for the financing of construction projects and / or implementation of real estate transactions in accordance with the Law of Ukraine “About financial and credit mechanisms and management of property under construction housing and real estate transactions”;
  • trust management of financial assets;
  • financial leasing services;
  • factoring services;
  • management of financial assets for the acquisition of goods in groups;
  • provision of guarantees and sureties.

The license will be issued for an unlimited period – within 10 days from the date of receipt of the application.

The cost of obtaining a license – one minimum salary. The new rules contain an exhaustive list of staff, rganizational, technological and special requirements to the licensee and a list of additional requirements defined for each type of financial services according to the specific activity. Also in the Rules contains a list of documents that must be submitted together with the application:

  • the financial reporting constituted according to international standards and the reporting data of the seeker license confirmed with the authorized auditor as of the last day of the quarter preceding day of receipt of the statement (not supplied by the seeker which was introduced in the State Register of financial institutions, not later than 90 days before the submission of the application and does not have the license issued earlier by the licensing body);
  • questionnaires of the head and chief accountant of financial organization;
  • description of documents which are filed (in duplicate);

Licensing conditions contain an exhaustive list of additional documents, established for each type of financial services separately.

It should be noted that this document has greatly expanded financial activities subject to licensing. So, earlier a license was not required for implementation of services in factoring, financial leasing, provision of loans or lending from own funds, provision of guarantees and sureties and in trust management of financial assets. For business entities providing such services and introduced to 10.12.16. in the State Register of financial institutions / register of persons who are not financial institutions, but have the right to provide certain financial services, will apply new licensing terms only after six months from the date of entry into force.

At the same time, new licensed conditions were developed for accomplishment of the Law of Ukraine “On licensing of economic activities”, which came into force 28.06.15 and ensured the elimination of contradictions of a legal character.

As for business entities, which work according to licenses of state financial services, they have to bring their activities into compliance with the new licensing conditions and submit to the licensing authority the new documents or information, which changed shape within two months from the date of publication of the Decree №913 (and requirements for the property right or uses of non-residential premises and availability of rooms for disabled people and other handicapped national groups – within a year).

Author: Olena Kutova
senior lawyer of the Finance Business Service company
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