Press Conference: New Opportunities of Joint Investment Institutions for the Real Sector of Economy
On August 7, 2009, a press conference dedicated to the topic of New Opportunities of Joint Investment Institutions for the Real Sector of Economy took place.
A distinguished panel of speakers included Yevgeniy Ivanov, Head of Joint Investment Institutions Office of the State Commission for Securities and Stock Market (SCSSM), Oleg Alyoshin, Partner of Vasil Kisil & Partners Law Firm, and Natalia Dotsenko-Belous, Senior Associate of Vasil Kisil & Partners Law Firm.
Starting from February 10, 2009 when the Law of Ukraine "On Amending the Law of Ukraine "On Joint Investment Institutions (equity and corporate funds)" took effect, stock market players and businesses obtained new opportunities of using JII advantages and facilities both for optimization of internal business operations and for tax planning and business structuring purposes.
"Legislation changes offer new opportunities for joint investment institutes from the point of view of asset diversification. They also provide the possibility of an integral application of stock market instruments in the course of business operation. Such novelties are of interest for construction and real estate markets allowing venture institutes of joint investment to form their assets fully at the expense of the real property. Moreover, such legislation changes remove some restrictions imposed upon individuals active in joint investment institutes sector. The effect of the novelties may be expected in the nearest future. This new law being of considerable significance in the context of mitigating the global recession aftermaths," - said Oleg Alyoshin.
In her speech, Natalia Dotsenko-Belous mentioned that joint investment institutes represent a unique stock market player which may not be regarded separately from the real economy sector.
In particular, Natalia underlined the new joint investment opportunities which appear for the construction and real estate sectors in connection with the amendments introduced to the Law "On JII".
New opportunities include:
A distinguished panel of speakers included Yevgeniy Ivanov, Head of Joint Investment Institutions Office of the State Commission for Securities and Stock Market (SCSSM), Oleg Alyoshin, Partner of Vasil Kisil & Partners Law Firm, and Natalia Dotsenko-Belous, Senior Associate of Vasil Kisil & Partners Law Firm.
Starting from February 10, 2009 when the Law of Ukraine "On Amending the Law of Ukraine "On Joint Investment Institutions (equity and corporate funds)" took effect, stock market players and businesses obtained new opportunities of using JII advantages and facilities both for optimization of internal business operations and for tax planning and business structuring purposes.
"Legislation changes offer new opportunities for joint investment institutes from the point of view of asset diversification. They also provide the possibility of an integral application of stock market instruments in the course of business operation. Such novelties are of interest for construction and real estate markets allowing venture institutes of joint investment to form their assets fully at the expense of the real property. Moreover, such legislation changes remove some restrictions imposed upon individuals active in joint investment institutes sector. The effect of the novelties may be expected in the nearest future. This new law being of considerable significance in the context of mitigating the global recession aftermaths," - said Oleg Alyoshin.
In her speech, Natalia Dotsenko-Belous mentioned that joint investment institutes represent a unique stock market player which may not be regarded separately from the real economy sector.
In particular, Natalia underlined the new joint investment opportunities which appear for the construction and real estate sectors in connection with the amendments introduced to the Law "On JII".
New opportunities include:
- Right of individuals and legal entities to participate in venture funds provided that they acquire securities of such venture funds at an amount of at least 1500 minimum salaries.
- Venture fund assets are formed exclusively of real property.
- Performing transactions involving JII assets it manages, at its own expense.
- Equity investment funds may be reorganized through a merger or a take-over upon consent of all of the participants. Such reorganization is allowed exclusively for single type JIIs.
- Settlements with equity investment fund participants may be made through transfer of property or other assets under the procedure agreed by the fund participants.
However, despite the existence of an express provision, the National Bank of Ukraine has not till now provided in its regulations a procedure of foreign currency acquisition for JII. Therefore, such resources may be purchased where an appropriate foreign economy contract is entered into.
Moreover, Natalia also informed about the state residential certificates program initiated by the Ukrainian Construction Association: "The main purpose of this program is to transform the "frozen" bank deposits of individuals primarily into the constructed residential property. Supposedly, the depositor will be suggested to voluntarily exchange the "frozen" deposit for a security being the state residential certificate. Such certificate gives the right to obtain the constructed or completed real property at a reduced price." Today such document is elaborated by the members of the Ukrainian Construction Association, it has been preliminarily approved by the Ministry for Regional Development and Construction of Ukraine, parliamentary committee for construction and some representatives of the National Bank of Ukraine. Next stage will be obtaining approval from the State Commission for Securities and Stock Market.
Development prospects for joint investment institutes were described in the presentation made by Yevgeniy Ivanov: "Construction, agriculture and high tech sectors are very promising now. Investments into construction will continue, and the value of the property itself will be more justified and less speculative, as the purchasing capacity of individuals has been impaired." Besides, Mr. Ivanov informed that the State Commission for Securities and Stock Market is now handling matters related to protection of investor's rights. In particular, it prepares a regulation for controling "technical papers" – issuers of which already have not reported to the Commission for 2 years by now and have only the registration certificate.