Supreme Court confirms lack of license for Universal Commodity Exchange 'Contract House of UICE' activities

The Supreme Court, consisting of a panel of judges of the Cassation Administrative Court, finally confirmed: the activities of the Universal Commodity Exchange "Contract House 'Ukrainian Interbank Currency Exchange" were carried out without a proper license, the National Securities and Stock Market Commission said.

"This is an important victory in the fight for transparent rules on the capital market. The decision is final and cannot be appealed," the commission said on its website on Monday.

The regulator also drew attention to the key findings of the Supreme Court, as the status of an organized commodity market is determined not by the type of product traded (for example, gas, agricultural products or metals), but by how the trades are conducted – whether they comply with the requirements of the law and the officially registered rules of the exchange.

In addition, the key findings emphasize that any centralized trading of exchange-traded goods on a commodity exchange is considered an activity on an organized market in accordance with current legislation.

"The National Securities and Stock Market Commission notes the importance of licensing as a mandatory prerequisite for legal activity on capital markets. At the same time, it calls on market participants to be aware of the risks associated with non-compliance with generally binding norms," ​​the commission said.

As reported, on May 14, 2022, the National Securities and Stock Market Commission suspended the license for the organization of trade in products on commodity exchanges of PJSC "Ukrainian Interbank Currency Exchange" (UICE) until the end of martial law.

"According to the information available to the regulator, persons related to the ultimate beneficial owners of the exchange and its board conducted activities for which they did not have the appropriate license. The commission suspends the license to verify the above facts, as they may have a negative impact on the operation of commodity markets," the regulator said.

UICE received a license to organize commodity trading only on November 24, 2021, becoming the third licensed market participant after the Ukrainian Energy Exchange and the Ukrainian Universal Exchange.

"The Commission, taking into account reasonable suspicions of possible violations that may result in significant risks and/or negative consequences for the functioning of organized commodity markets during martial law, decided to suspend the license of... UICE until the end of martial law," the decision reads.

It also notes that the commission issued a resolution on the offense on May 12 and sent it by letter on the same day, according to which the UICE published information on timber trading on its own website on January 25 not in full, and also provided inaccurate information at the request of the commission.

In addition, the regulator issued a resolution on the offense of May 9, according to which UTB "Contract House of the UMICV" carries out operations on the organization of trade without a license and uses the words "commodity exchange" in its name.

PrJSC "Ukrainian Interbank Currency Exchange" was founded in 1993 by a government resolution. It is part of the UMICV Group, which also includes UTB "Contract House of the UMICV", LLC "FTN Monitor Ukraine", and is one of the four registered stock exchanges.