A group of banks and investment companies that hold securities trading licenses have notified the regulator, the National Securities and Stock Market Commission (NSSMC), of their readiness to create a new stock exchange amid the threat of withdrawal from the market of two of the three existing exchanges, the PFTS and the Ukrainian Exchange (UX).
According to a copy of the letter sent last week to the head of the NSSMC, available to the agency, the signatories include, in particular, the Univer Investment Group, Dominant Trade, Daliz Finance, AMC Vsesvit, Altbank, Dzherelo, BTS Broker, AMC Ozon, AMC OTP Capital, Reisen Ukraine, and Profi-T Asset.
It is noted that among the main tasks of the new trade organizer are modern technological solutions for the work of online brokers, in particular, for online trading and investing through Diya-OVGZ, the development of the derivatives market, repos and swaps, and liquidity support.
“Under the current conditions, the new exchange will be able to take advantage of, among other things, experienced professionals and modern trading technologies,” the letter states, although, according to Interfax-Ukraine, there are no formalized agreements with the PFTS and UX, which are trying to stay on the market, in this regard.
It is specified that the process of creating a new exchange will take place in several stages, the first of which is to form the team of the future exchange and obtain a license, while the second will involve some private banks – Universal Bank (mono), Globus and others.
It is assumed that at the third stage, the capital of the new exchange may include state-owned banks, such as PrivatBank, Oschadbank, and Sense, which are interested in creating a high-tech trading organizer, followed by international financial organizations and foreign commercial entities.
The authors of the letter ask the NSSMC to support this initiative.
As reported, in late March, the NSSMC warned market participants that two of the three Ukrainian stock exchanges – PFTS (Kyiv) and UX – were at risk of losing their licenses due to violations of license conditions and suggested considering possible solutions, including the creation of a new exchange and voluntary surrender of exchange licenses.
“We have called the market to ensure that the participants most interested in the existence of this infrastructure understand the consequences for themselves, as many products are built on it. If the participants are satisfied that only one exchange will remain on the market (Perspectiva – IF-U), if they do not need competition among exchanges, the regulator will agree with this. If not, if they lack one exchange, if they want to hedge risks by creating another exchange, then make two, three, five – as many as necessary,” Yaroslav Shlyakhov, a member of the NSSMC, said in an interview with Interfax-Ukraine in April.
According to the NSSMC, the volume of trading in financial instruments on Ukrainian stock exchanges increased 2.7 times in 2023 to UAH 436.43 billion, of which 93% was accounted for by domestic government bonds. The share of PFS in the total trading volume was 62.9%, Perspectyva – 33.7%, and UX – 3.4%, but UX is the leader in terms of the number of transactions and instruments.
According to the Commission, in the unorganized market in 2023, the trading volume doubled to UAH 925.11 billion.
The PFTS Stock Exchange was founded in 1997. For a long time, PFTS was the market leader, but dissatisfied with the quality of its work, leading traders, together with the RTS, created the UX in 2008, which started operating in the spring of 2009 and was the first to launch “Internet trading.”
The Perspectiva Stock Exchange (Dnipro) received its license in March 2008, and before that it had been operating as a trade information system of the same name for almost two years.
China’s Bohai Commodity Exchange (BOCE) on September 18 repeatedly submitted an application seeking the approval of the acquisition of a stake in the share capital of PJSC PFTS Stock Exchange (Kyiv), Head of the Antimonopoly Committee of Ukraine Yuriy Terentiev has told Interfax-Ukraine. “The Chinese side [in May 2018] applied for an agreement to acquire a stake in the PFTS, but since the seller’s control relationships were poorly disclosed, this served as the basis for returning the application. This week, on Tuesday, the party addressed with a new application,” he said on the sidelines of the annual Ukrainian Financial Forum in Odesa organized by ICU investment group.
The head of the committee added that if the documents are properly presented, an appropriate permit can be granted within 45 days.
In addition, Terentiev said that regarding the Ukrainian Exchange, which announced its intention to offer 36% of the additionally issued shares to BOCE, the committee has not yet received the application.
Earlier, BOCE studied the possibility of buying more than 25% of the shares in PJSC PFTS Stock Exchange and in early May 2018 asked the Antimonopoly Committee of Ukraine for preliminary conclusions on the acquisition of such a stake.
