The Law of Ukraine on Joint Stock Companies: on the right path to progress or generating problems?
On June 13, 2009, a round table entitled “The Law of Ukraine on Joint Stock Companies: on the Right Path to Progress or Generating Problems?” took place at LIGABusinessInform press-center in Kiev. Its main purpose was to attract public attention to the implementation of the requirements stipulated in this legislative act within joint stock companies’ operation and to discuss the problems that arise as a result thus facilitating a productive dialogue among all the participants of this complex process.
The round table was moderated by Olga Ratushnyuk, Deputy Chairman of the Board of Khreshchatik CB JSC, who pointed out: «It has been a year since the Law of Ukraine on Joint Stock Companies has been adopted and almost three months since it has become effective. However, there are still a lot of issues that need to be regulated.»
Event attendees, including Anna Babych, Senior Associate with Vasil Kisil and Partners Law Firm, agreed that this law offers positive prospects for the development of the Ukrainian stock market, though a number of its provisions are yet to be improved. The importance of this legislative act can hardly be overestimated as it affects all of the 32,000 Ukrainian joint stock companies, and offers protection of the interests of minority shareholders. It is aimed to help companies attract capital and ultimately is bound to create a proper corporate law framework in Ukraine. This, in its turn, will directly lead to the establishment of the national capital market. However, for the law to be implemented, it is necessary to renew the stock market infrastructure and make the procedure for purchase and sale of shares by private investors less complicated.
In particular, Mrs. Ratushnyuk raised the issue of organizing securities trade, which is of big concern for many market players. After all, out of 22,000 joint stock companies registered in Ukraine at present only as few as 15 percent meet the listing requirements. Moreover, the market price of securities remains a problem to be resolved.
Sergey Biryuk, member of the Securities and Stock Market State Commission (SSMSC), said that the SSMSC is ready to review suggestions of all interested parties and consider them when drafting amendments to the effective law. In his turn, Igor Seletsky, Business Development Director with PFTS Stock Market JSC announced: “We are ready to make our listing requirements less demanding, namely, in regard to profitability figures, but only after the Commission does the same.’”
Commenting on the problem of obligatory listing for public joint stock companies and the related problem of inefficient owners, Vasil Kisil and Partners’ expert Anna Babych said: “The expected introduction of the third-level listing is rather a temporary and an ‘artificial’ solution of practical problems arising out of the requirement that public joint stock companies must be listed on a national stock exchange.”
The round table was moderated by Olga Ratushnyuk, Deputy Chairman of the Board of Khreshchatik CB JSC, who pointed out: «It has been a year since the Law of Ukraine on Joint Stock Companies has been adopted and almost three months since it has become effective. However, there are still a lot of issues that need to be regulated.»
Event attendees, including Anna Babych, Senior Associate with Vasil Kisil and Partners Law Firm, agreed that this law offers positive prospects for the development of the Ukrainian stock market, though a number of its provisions are yet to be improved. The importance of this legislative act can hardly be overestimated as it affects all of the 32,000 Ukrainian joint stock companies, and offers protection of the interests of minority shareholders. It is aimed to help companies attract capital and ultimately is bound to create a proper corporate law framework in Ukraine. This, in its turn, will directly lead to the establishment of the national capital market. However, for the law to be implemented, it is necessary to renew the stock market infrastructure and make the procedure for purchase and sale of shares by private investors less complicated.
In particular, Mrs. Ratushnyuk raised the issue of organizing securities trade, which is of big concern for many market players. After all, out of 22,000 joint stock companies registered in Ukraine at present only as few as 15 percent meet the listing requirements. Moreover, the market price of securities remains a problem to be resolved.
Sergey Biryuk, member of the Securities and Stock Market State Commission (SSMSC), said that the SSMSC is ready to review suggestions of all interested parties and consider them when drafting amendments to the effective law. In his turn, Igor Seletsky, Business Development Director with PFTS Stock Market JSC announced: “We are ready to make our listing requirements less demanding, namely, in regard to profitability figures, but only after the Commission does the same.’”
Commenting on the problem of obligatory listing for public joint stock companies and the related problem of inefficient owners, Vasil Kisil and Partners’ expert Anna Babych said: “The expected introduction of the third-level listing is rather a temporary and an ‘artificial’ solution of practical problems arising out of the requirement that public joint stock companies must be listed on a national stock exchange.”