The President has signed a controversial law on the depository system.
It provides for the creation of a single settlement centre, supervised by the National Bank of Ukraine, to conduct clearing for the Ukrainian stock market. The bill fuelled sharp criticism from the Ukrainian stock market community, which suspended the operations of the Ukrainian Stock Exchange for an hour on September 20th in protest. The Ukrainian Week’s sources say that the key motivation of the Party of Regions MPs who sponsored the bill, was to impose higher taxes on the relatively high cash flows of stock market participants and leave businesses owned by people other than those loyal to them without any stock market instruments that would allow them to evade such taxes. In fact, the Ukrainian stock market is close to experiencing its death-pangs today – largely as a result of the lack of adequate state policy for its development. The Russians already control the Ukrainian stock market largely through their control over the biggest Ukrainian stock exchanges and investment banks. However, even the Russians have little interested in a poorly developed market. Once the law comes into effect, the Ukrainian stock market can be sidelined altogether.