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For a couple of years there have been steps taken in Ukraine to develop steady Forex regulation in the country. During the last several months some marked progress has been seen, with the working group putting the finishing touches on the bill “On the activities of forex dealers in Ukraine” and having another meeting last Friday – June 19, 2015.
The bill itself (№2290) was officially registered on March 3, 2015. Let’s summarize some of its most interesting points:
Forex dealers (that is the official name for Forex brokers in Ukraine) will have to obtain license from the state authorities.
The minimum capital requirement is UAH 1 million (USD 46,000), although the size may rise depending on the amount of deposits of clients.
Membership in a compensation fund, set to help clients of bankrupt brokers, is compulsory. Such a membership requires an initial fee of UAH 1 million.
Each broker should have a trademark registered in Ukraine.
Each broker should have a website with the domain “ua”.
Maximum leverage is set at 1:50.
There are requirements concerning proper Forex advertising, as well as the software that Forex companies should use.
The meeting that was held last Friday focused mostly on the roles and functioning of Forex self-regulatory organization(s) and the compensation fund. Participants in the meeting discussed matters like the membership in a self-regulator (should it be compulsory or not) and whether there should be a single or multiple SROs.
Regarding the compensation fund, there is still no clarity whether it will be managed by an SRO or by the state regulator.
Even more importantly, the bill says nothing on the particular authoritative body to be responsible for the oversight of the Forex industry. That is, the bill does not state who will regulate Ukraine’s Forex brokers.
To view the text of the bill (in Russian), click here.