Article

Financial monitoring on the securities market of Ukraine: Current realities and perspectives

Olena Voronkova
Retrieved from Vol. 15, No. 2, 2020 Pages 175–184
Received
15.03.2020
Revised
30.04.2020
Accepted
27.05.2020
Views
278

Abstract

Relevance of the research topic. The domestic securities market has significant opportunities for money laundering through its underdevelopment, significant level of shadowing and the overall financial and economic situation in the country. In such circumstances, the issue of the effectiveness improvement for financial monitoring as the main tool to counteract the income legalization and the holding of shadow operations on the securities market is relevant. Formulation of the problem. The low efficiency of the stock market of Ukraine, especially with regard to providing protection and transparency of investments, significantly reduces its competitiveness to obtain both foreign and domestic investments. Financial monitoring of securities transactions has key importance for effective development of the stock market in terms of its reliability and safety. Analysis of recent research and publications. Problems of financial monitoring in the aspect of ensuring financial and economic security and counteracting the legalization of illegally obtained proceeds, the financing of terrorism and the proliferation of mass impression weapons were investigated in the works of such scientists as O. Akimova, S. Butkevich, O. Glushchenko, S. Kuznetsov O. Kurishko, L. Klyusko, A. Khmelyuk and others. Selection of unexplored parts of the general problem.  Considering the significant results of the research of the mentioned problems, the important object of financial monitoring, such as the securities market, is remained without the attention of the researchers though a considerable amount of shadow financial transactions is going on it. The purpose of the study is to analyze the current realities of financial monitoring in the Ukrainian securities market and to determine its development perspectives. Method or methodology for conducting research. The research was conducted on the basis of a systematic approach using methods of analysis, synthesis, comparison, generalization and extrapolation. Results of work. The peculiarities of primary and state financial monitoring on the securities market of Ukraine are determined. Key performance indicators of professional stock market participants as subjects of primary financial monitoring are analyzed, as well as indicators of activities of the NSSMC and SSFM of Ukraine in the field of financial monitoring on the securities market. The main typical violations of the legislation on financial monitoring in the stock market and the main types of securities used to launder “dirty” funds are highlighted. The field of application of results. The results of the study can be used in the preparation of drafts to the domestic legislation governing the implementation of financial monitoring, as well as in the preparation of state programs for the development of the domestic stock market. Conclusions. According to the results of the research, it is concluded that there are significant perspectives for the development of financial monitoring on the Ukrainian securities market. Considering the common violations in the field of the financial market monitoring legislation, control for customer risk management procedures should be enhanced as well as for procedures to identificate, verificate and clarify information about clients and their representatives. Considering the most common ways for “dirty” funds laundering in the securities market, its professional participants – the subjects of the primary financial monitoring should follow the NSSMC's recommendations for setting high level of risk for clients with certain characteristics

Keywords

References

.[1] Law of Ukraine No. 1702-VII "On the prevention and counteraction to the legalization (laundering) of proceeds of crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction". (2014, October). Retrieved from http://zakon0.rada.gov.ua /laws/show/1702-18.
[2] Decision of the National Commission on Securities and Stock Market No. 309 "On the Regulation on financial monitoring by professional participants of the securities market". (2016, March). Retrieved from https://.gov.ua/document/ download/309_2016.
[3] Resolution of the Cabinet of Ministers of Ukraine No. 522 "On some issues of financial monitoring organization". (2015, August). Retrieved from https://zakon.rada.gov.ua/laws/show/552-2015-%D0%BF.
[4] Reports on the activity of the State Financial Monitoring Service of Ukraine. (n.d.). Retrieved from https://fiu.gov.ua/pages/dijalnist/funkcional/zviti-pro-diyalnist.
[5] National Securities and Stock Market Commission. (n.d.). Retrieved from https://www.nssmc.gov.ua.
[6] Decision of the National Commission on Securities and Stock Market No. 1038 "On approval of the procedure for monitoring the observance by the professional participants of the stock market (securities market) of the requirements of the legislation in the field of prevention and counteraction to the legalization (laundering) of proceeds from crime, terrorist financing and financing the proliferation of weapons of mass destruction". (2015, July). Retrieved from https://zakon.rada.gov.ua/laws/show/z0955-15.
[7] Activity reports of the National Securities and Stock Market Commission. (n.d.). Retrieved from https://www.nssmc.gov.ua/about-us/annual-reports/.
[8] State Financial Monitoring Service of Ukraine. (n.d.). Retrieved from http://sdfm.gov.ua.
[9] Typological studies of the State Financial Monitoring Service of Ukraine for 2016, 2015, 2014. (n.d.). Retrieved from https://fiu.gov.ua/pages/dijalnist/tipologi/tipologi-derzhfinmonitoringu/tipologiczni-doslidzhennja-derzhavno-sluzhbi-finansovogo-monitoringu-ukrani-za-2016-20152014-roki.html.

Suggested citation

Voronkova, O. (2020). Financial monitoring on the securities market of Ukraine: Current realities and perspectives. University Economic Bulletin, 15(2), 175-184. https://doi.org/10.31470/2306-546X-2020-45-175-184