Ukrainian authorities are considering the possibility of creating a new stock exchange to ensure the continued uninterrupted functioning of the secondary market for government bonds, since the largest and oldest stock exchange in the country, PFTS, is insufficiently capitalized, and its owner has confirmed that he would not inject new capital, say the materials of the International Monetary Fund (IMF).

"PFTS, the largest and oldest stock exchange in Ukraine, accounting for 68% of trade volumes, is undercapitalized, and the owner has confirmed they will not infuse fresh capital. To safeguard the functioning of the secondary market in government bonds and other instruments, the authorities are considering establishing a new exchange. Capital of around $500,000 will be partly provided by state owned banks (30%) and the remainder from private sources, including IFIs," the report says.

"The NBU (National Bank of Ukraine), the NSSMC (the National Securities and Stock Market Commission) and the MOF (Ministry of Finance) in consultation with IMF and other IFIs have proposed priority actions for enhancing the capital market infrastructure. In a first phase, the NSSMC will approve the NBU regulation allowing the NBU to extend the NBU Clearstream link by end-July 2024 to facilitate access of foreign capital to municipal bonds and other Ukraine reconstruction-related debt instruments. In a second phase, the NSSMC, National Depositary (NDU), and NBU with IMF technical assistance will target establishment of a direct link between the Central Securities Depository (CSD) and foreign CSDs by end-July 2025 to expand foreign investors’ access to a broader range of instruments and markets. The NBU, NSSMC, and MOF will by end-August 2024 propose further measures aimed at enhancing capital market infrastructure," the updated memorandum with the IMF reads.