The Ministry of Digital Transformation demands to revise the reform of the financial assets market due to problems with electronic registers

The Verkhovna Rada is currently considering draft law No. 15172 on securitization and covered bonds, which provides for a comprehensive reform of the financial assets market and the implementation of European standards, but has received a significant list of comments from parliamentary committees and government agencies.

The document aims to create a legal framework in Ukraine for the securitization of financial assets, issuance of covered bonds, introduction of specialized financial platforms, as well as new instruments, including credit notes. The draft law also regulates investor protection, asset circulation, and information disclosure mechanisms.

As reported by the "Judicial and Legal Newspaper", the draft law aims to introduce financial instruments in Ukraine that have long been used in EU countries. These are mechanisms that allow banks to attract additional resources for long-term lending to the population and businesses.

Currently, banks are limited in their ability to provide "long-term" loans due to high risks and a lack of long-term resources. The draft law provides a model under which part of the risks on loan portfolios can be transferred to investors, and financial institutions will receive additional liquidity to issue new loans.

The document is intended to create a legal basis for converting illiquid assets, including loan portfolios, into liquid securities. This will allow banks to unload their balance sheets and direct resources to new lending, which is considered one of the tools for financing reconstruction and housing programs, including for internally displaced persons. In other words, securitization allows a bank to pool loans into one package, issue securities backed by them, and attract investor funds without waiting years for full repayment by borrowers.

Despite general support, the draft law requires revision.

The Committee on Digital Transformation drew attention to a key shortcoming — the lack of comprehensive legal regulation of new electronic registers, which are fundamental for the functioning of the securitization system. In particular, their status, administration, data protection, and rules for information disclosure are not defined, which does not comply with the requirements of legislation on public electronic registers and open data.

At the same time, the draft law stipulates that the maintenance and filling of the securitization transaction register is carried out by the National Securities and Stock Market Commission with the provision of its publication on the official website. Deadlines for entering information into the register are also provided, including data on compliance of transactions with the law, changes in their status, and applied enforcement measures.

It is also established that the authorization of verification agents is carried out by including legal entities in the relevant register, the procedure for maintaining which is determined by the Commission's regulatory acts. A similar approach is provided for the register of cover assets, which is maintained electronically by issuers and must contain up-to-date information about the assets.

However, the Ministry of Digital Transformation's conclusion states that the draft law does not contain full regulatory provisions for the creation and maintenance of these registers.

Furthermore, the conclusion emphasizes that a number of issues that, according to the Law of Ukraine "On Public Electronic Registers," must be defined exclusively at the law level are not regulated, including:

• the legal status of registers and their purpose;
• holders and administrators;
• requirements for creation and functioning;
• structure of registry data and sources of information;
• procedures for access, protection, and data processing;
• integration with state systems;
• financial support;
• procedures for publication and provision of information.

The Ministry of Digital Transformation also notes that according to legislation on access to public information and open data, a significant portion of information generated within the securitization market must be published in open data format on the Unified State Web Portal.

In this regard, the Ministry of Digital Transformation believes that the draft law requires revision in terms of clearly defining the operating regime of registers and the list of public information subject to open disclosure.

At the same time, the Verkhovna Rada Committee on Finance, Tax, and Customs Policy instructed to revise the draft law taking into account the expressed comments and proposals and also recommended including it in the agenda and adopting it as a basis in the first reading. Before the second reading, the document must be revised considering the submitted proposals.

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