Integration regulation of securities markets in the EU

Abstract:

1. In the field of integrated regulation of securities markets in the EU, a transition was made from the principle of minimum harmonization to mutual recognition, from mutual recognition to unification, and as a result, in particular, the minimum requirements for issuers for access to the regulated market, requirements for disclosure of information, securities issue prospectuses were unified papers, etc. Since EU law is a law formed by an international economic and political association as a type of international organization, created on the basis of international treaties concluded by member states, and the norms of EU law have a direct effect on subjects of public and private law thanks to an international agreement between by sovereign states, what is created by EU institutions are supranational integration norms of law (derivative international law), and, therefore, it is the sphere of international law (like all legal issues of a supranational nature).
2. The subject of EU securities integration law is social relations in the field of development and functioning of securities markets as a free market within the EU, as well as further gradual integration of EU securities markets into international securities markets. Both imperative and dispositive methods of regulation in the integration law of EU securities are used. It follows from this that the integration law of EU securities (the law of EU securities markets) is a complex branch of EU economic law, a separate set of integration norms aimed at regulating social relations in the field of free cross-border trade within the EU and limited free - in relation to third countries - functioning of securities markets.
3. The method of integration of the securities market of Ukraine into the legal field of the EU, by analogy with the method of integration of the securities markets of the EU member states, can be outlined by the following elements:

1) definition of the goal (desired level of integration) - abolition of restrictions on the free movement of capital between Ukraine and the EU, in particular on the securities market;

2) determination of the regulatory framework that must be developed to achieve the goal and development of by-laws, technical regulations (including a gradual transition from the currency control system to administrative measures to control the movement of capital, for example, strengthening requirements for the transparency of the corporate structure of issuers);

3) establishment of enhanced cooperation of the state regulator of the securities market of Ukraine with the regulators of other countries of the integration zone (gradual implementation of the principle of mutual recognition, and later harmonization), that is, a set of measures should be adopted to recognize licenses for the right to provide financial services issued by Ukrainian regulators, in EU member states, and licenses issued in the EU - in Ukraine, as well as the institution of a single "passport" of the issuer;

4) creation of a system of control over the fulfillment of set goals and actual obstacles on the way to building a common capital market of Ukraine and the EU.

3. Since the EU, as an integrative supranational association of sovereign member states, does not have the authority to act as a full member of international organizations engaged in the development of recommendations for the development of securities markets, except for the WTO, and, unlike the member states, is not a party to the Vienna Convention on the law of international treaties, a potentially possible conflict of the international European and international universal legal order on issues of the securities market.

4. In future agreements with the EU, it is recommended to develop norms that will ensure a fair buyout of shares of a minority shareholder in the process of acquisition of a company by a majority shareholder, in particular, the introduction of a mechanism for compensation of losses, including lost profits, etc.

5. There is a need to adjust international treaties of Ukraine in the field of investments in the event of accession to the EU, in particular, by introducing mechanisms of restrictions on the free movement of capital in the event that the Council of the EU adopts a corresponding decision.

6. Regulation of EU policy in the field of securities markets is not limited to legal relations of an intra-system nature between EU institutions and member states. It is also characterized by the presence of an external dimension, which includes the segment of EU cooperation with third countries, including and with Ukraine.

7. It is proposed to adopt a document in the form of the Law of Ukraine "On the Basics of Legislation on Financial Services Markets", in which the general part would include sections on the methodology of adapting Ukrainian legislation to EU law, in particular, determining the ultimate goal of integration for a certain long-term period, and the special part - sections on banking, insurance and securities markets, with the introduction of a gradual replacement of the currency control system with administrative measures of prudential supervision, oriented to European standards.

8. There is a need to introduce a system of tax incentives for investors regarding the reinvestment of income received or accrued from securities. It is appropriate that investment income and dividends paid on shares and other financial instruments, in particular, of joint investment institutions, the assets of which are managed by asset management companies that are residents of Ukraine and are owned by residents of Ukraine, should not be taxed.

9. Regarding the adaptation of Ukrainian legislation in the field of securities markets to EU law, it would be appropriate to:

1. eliminate the conflict between the Civil Code of Ukraine and the Law of Ukraine "On Securities and the Stock Market" regarding the concepts of "financial instruments" and "securities", bringing their content as close as possible to the definitions used by EU legislation;
2. to improve the concept of "financial instruments", Article 1 of the Law of Ukraine "On Securities and the Stock Market" to add the words: " shares in collective investment organizations; options, futures, swaps, forward interest contracts and any other commodity derivative contracts that must be settled in cash or may be settled in cash at the option of either party (other than by reason of default or other activities termination measures); derivative instruments for credit risk transfer; financial contracts for difference ". Also, work should be planned and started on making appropriate changes to other normative legal acts of Ukraine to ensure the functioning of those financial instruments that are introduced in the EU;
3. introduce the document "Key information for investors" that would meet the requirements of the EU Directive on prospectuses;
4. take measures to improve the efficiency of corporate governance based on the presumption of effective control by shareholders and implement compensation schemes for CII investors to bring Ukrainian legislation into compliance with the Directive "On Investor Compensation Schemes " and with the aim of gradually implementing the requirements of the Directives on UCITS;
5. to ensure compliance of the requirements of Ukrainian legislation regarding credit rating agencies with EU standards and subsequently the possibility of registration of Ukrainian CRAs in the EU to increase trust in them on the part of foreign investors, which may be reflected in the following agreements with the EU;
6. introduce into Ukrainian legislation, in particular by amending the Law of Ukraine "On Joint-Stock Companies", the obligation of the executive body of the company, together with the announcement of the agenda, to send to the shareholders the materials of the general meeting, which must contain draft decisions to be adopted by the general meeting of the company, or legal clarifications on issues of the agenda or possible decisions, their legal consequences.

author I.P. Yanovska, 2014