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 : : Legal Framework
2009-01-01 00:00:00  Print Version



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STATE FINANCIAL SERVICE MARKETS REGULATION COMMISSION OF UKRAINE

 

INSTRUCTION

 

No. 5226 of 29 December 2005

Registered with the Ministry of Justice of Ukraine on 17 February 2006 under No. 143/12017

 

On Introduction of Changes into the Non-state Pension Fund Administration Business Licensing Conditions

 

According to requirements of Article 34 of the Law of Ukraine "On Financial Services and State Regulation of Financial Service Markets", Article 27 of the Law of Ukraine "On Non-state Pensions" and requirements of sub-item 8 of item 4 of the Charter of the State Financial Service Markets Regulation Commission of Ukraine approved by Decree of the President of Ukraine No. 292 of 04 April 2003 and in order to improve the state regulation of the provision of non-state pension provision services, the State Financial Service Markets Regulation Commission of Ukraine has RESOLVED as follows:

 

1. Changes shall be entered into the Non-state Pension Fund Administration Business Licensing Conditions approved with Instruction of the State Financial Service Markets Regulation Commission No. 118 of 13 November 2003 and registered with the Ministry of Justice of Ukraine on 12 January 2004 under No. 25/8624 by setting them in a new wording that is attached.

 

2. The Non-state Pension Fund Supervision Department (A.A. Rybalchenko) and the Legal Department (O.V. Chursin) shall cause this instruction to be submitted to the Ministry of Justice of Ukraine for the state registration.

 

3. The Governor Organisational and Analytical Support Directorate (T.M. Shevchenko) shall cause this Instruction to be published in mass media after the state registration thereof.

 

4. The control over the implementation hereof shall be laid upon A.A. Rybalchenko, member of the Commission, Director of the Non-state Pension Fund Supervision Department.

 

V. SUSLOV, Commission Governor

 

Minutes of Meeting of the Commission No. 191 of 29 December 2005

 

APPROVED
with Instruction of the
State Financial Service Markets Regulation Commission of Ukraine
No. 118 of 13 November 2003 (see text)

(in the wording of Instruction
of the State Financial Service Markets Regulation Commission
No. 5226 of 29 December 2005)

 

Registered with the
Ministry of Justice of Ukraine
on 17 February 2006 under No. 143/12017

 

Non-state Pension Fund Administration Business Licensing Conditions

 

These Licensing Conditions have been developed in line with requirements of Laws of Ukraine "on Financial Services and State Regulation of Financial Service Markets" (hereinafter referred to as the "Law"), the Charter of the State Financial Service Markets Regulation Commission of Ukraine approved by Decree of the President of Ukraine No. 292 of 04 April 2003, the Charter of the State Financial Institutions Register approved with Instruction of the State Financial Service Markets Regulation Commission No. 41 of 28 August 2003 and registered with the Ministry of Justice of Ukraine on 11 September 2003 under No. 797/8118 (with changes) (hereinafter referred to as the "Register Charter"), and other regulatory acts that govern the relations arising in the field of the exercise of the non-state pension fund administration business.

 

Section 1. General Provisions

 

1.1. These Licensing Conditions specify the requirements binding at the moment of the licence obtainment and during the exercise of the non-state pension fund (hereinafter referred to as "pension funds") administration business.

 

1.2. The terms listed below shall have the following meanings in these Licensing Conditions:

 

"Applicant" shall be understood as a legal entity that submits documents for the obtainment or the annulment of a licence, the re-issue of a licence, the issue of a duplicate licence;

 

"Qualified employee" shall be understood as an employee of the administrator who meets the qualification requirements for the non-state pension fund administration specialists put forward by the State Financial Service Markets Regulation Commission of Ukraine;

 

"Licensee" shall be understood as a legal entity (a sole founder of the corporate pension fund that has made a decision to administer the said fund on its own, a professional administrator or an asset management company) that has obtained a licence for the exercise of the pension fund administration business;

 

"Licensing" shall be understood as the issue, the re-issue and the annulment of licences; the issue of duplicate licences; the maintenance of licensing files;

 

"Licence" shall be understood as a document in the prescribed format that certifies the eligibility of the licensee for exercising the pension fund administration business subject to the compliance with these Licensing Conditions;

 

"Applicant's representative" shall be understood as the entity that must or has the right to execute a legal instrument on behalf of the applicant in accordance with the Civil Code of Ukraine.

 

Other terms shall be used herein in accordance with the Law of Ukraine "On Financial Services and State Regulation of Financial Service Markets", the Law, the Register Charter.

 

1.3. The State Financial Service Markets Regulation Commission shall licence the pension fund administration business.

 

1.4. As of the time of submission of the application for the licence for the pension fund administration business, the professional administrator or the asset management company must be entered into the State Financial Institutions Register (hereinafter referred to as the "Register") in accordance with the Register Charter and the Policy of the Entry of the Information about Non-state Pension Fund Administrators into the State Financial Institutions Register approved with Instruction of the State Financial Service Markets Regulation Commission No. 3617 of 22 February 2005 and registered with the Ministry of Justice of Ukraine on 28 March 2005 under No. 336/10616.

 

1.5. The pension fund administration business licence shall entitle the licensee to administer pension funds on the whole territory of Ukraine.

 

1.6. In case of the exercise of the pension fund administration business via a separated unit of the administrator, the said unit must operate in accordance with these Licensing Conditions.

 

The information about such a unit (for a professional administrator and an asset management company) must be entered into the Register in accordance with the Register Charter and the Policy of the Entry of the Information about Non-state Pension Fund Administrators into the State Financial Institutions Register approved with Instruction of the State Financial Service Markets Regulation Commission No. 3617 of 22 February 2005 and registered with the Ministry of Justice of Ukraine on 28 March 2005 under No. 336/10616.

 

1.7. The pension fund administration business licence shall be termless.

 

1.8. The licence shall become null and void when found to be invalid or annulled.

 

1.9. The exercise of the pension fund administration business after the licence annulment or invalidation shall be disallowed (taking into account the requirements of part five of Article 28 of the Law).

 

1.10. In case of the emergence of grounds for the licence re-issue or the duplicate licence issue, the administrator shall take actions in accordance with requirements of these Licensing Conditions.

 

1.11. In case of the separation and the termination of the administrator as a legal entity with the succession by means of the merger, the accession, the division, the transformation, the administrator must obtain a new licence in accordance with these Licensing Conditions.

 

1.12. In case of the annulment or the invalidation or the expiry of the licence of an asset management company for the exercise of the professional activities on the securities market in the form of the asset management, the asset management company must bring its activities into conformity with item 2.1 of these Licensing Conditions within three months of the date of the annulment, the invalidation or the expiry of the said licence in order to exercise the pension fund administration business.

 

1.13. A fee shall be charged for the issue, the re-issue or the duplicate issue of a licence; the procedure of the fee payment shall b specified by the regulatory acts of the State Financial Service Markets Regulation Commission.

 

1.14. The licensee may not convey the licence or a copy thereof to another legal entity or individual for the exercise of the pension fund administration business.

 

Section 2. Requirements for the Applicant While Obtaining a Licence for the Exercise of the Pension Fund Administration Business

 

2.1. Requirements for a Professional Administrator

 

2.1.1. The professional administrator may be established in the form of a joint-stock company or a limited liability company.

 

2.1.2. The professional administrator established as a joint-stock company shall have the right to issue solely ordinary registered shares.

 

2.1.3. The custodian of the pension fund, with whose council the administrator has concluded a pension fund service agreement, may not be the founder of the administrator.

 

2.1.4. The name of the professional administrator must reflect its organisational/legal form, contain words "pension fund administrator" and be different from names of any other pension fund administrators.

 

2.1.5. The authorised capital of the professional administrator paid in monies as of the time of the submission of the licence application must be equivalent to at least EUR 300,000 at the official exchange rate of the National Bank of Ukraine as of the date of the state registration of such a legal entity.

 

2.1.6. The management bodies of the professional administrator must be established in accordance with the legislation on the regulation of activities of corporations taking into account the requirements of the Law.

 

2.1.7. Individuals being members of the executive and controlling bodies of the professional administrator must meet the requirements of part two of Article 24 of the Law.

 

The chief accountant must meet the Professional Requirements for Chief Executive Officers and Chief Accountants of Financial Institutions approved with Instruction of the State Financial Service Markets Regulation Commission No. 1590 of 13 July 2004 registered with the Ministry of Justice of Ukraine on 02 August 2004 under No. 955/9554.

 

2.1.8. The professional administrator (in addition to members of executive and controlling bodies) must have at least three qualified employees (including the head of the structural unit charged with the personalised registration of fund participants), and two qualified employees each per each separated unit (including the manager of the separated unit).

 

The professional administrator must develop and approve the procedure of keeping the record of the archive documents flow with the decision of its management body vested by the charter with the authority to make relevant decisions taking into account the requirements of the Policy of Exercise of the Non-state Pension Fund Administration Business approved with Instruction of the State Financial Service Markets Regulation Commission No. 1660 of 20 July 2004 and registered with the Ministry of Justice of Ukraine on 06 August 2004 under No. 990/9589.

 

The access rights to the system of the personalised registration of pension fund participants must be specified in job descriptions of the relevant employees.

 

2.2. Requirements for the Sole Founder of a Corporate Pension Fund

 

2.2.1. A sole founder of a corporate pension fund must be registered as a business entity (legal entity).

 

2.2.2. The constituting documents submitted for the obtainment of a licence must meet the requirements of the legislation on the regulation of activities of corporations and provide for the exercise of the pension fund administration activities.

 

2.2.3. A sole founder of a corporate pension fund must set up a dedicated structural unit for the administration of its corporate fund. If the said sole founder is intent on exercising the pension fund administration activities via its separated unit, it must establish an appropriate structural unit within such a separated unit.

 

2.2.4. The head of the structural unit must meet the requirements of part two of Article 24 of the Law and be directly subordinated to the chief executive officer of the legal entity being the sole founder of the corporate pension fund.

 

2.2.5. A sole founder of a corporate pension fund must have at least two qualified employees in its pension fund administration structural unit (including the head of such a structural unit) and two qualified employees each in the pension fund administration structural unit of each separated unit (including the head of the structural unit of the separated unit charged with the personalised registration of pension fund participants).

 

2.3. Requirements for an Asset Management Company

 

2.3.1. An asset management company must be in possession of a licence for the exercise of professional activities on the securities market in the form of the asset management activities as of the time of the submission of the application for the licence.

 

2.3.2. The authorised capital of the asset management company paid in monies as of the time of the submission of the licence application must be equivalent to at least EUR 300,000 at the official exchange rate of the National Bank of Ukraine as of the date of the state registration of such a legal entity.

 

2.3.3. The asset management company must set up a dedicated structural unit in order to exercise the pension fund administration business.

 

2.3.4. The head of the said structural unit shall directly report to the chief executive officer of the legal entity being the asset management company, and must meet the following requirements:

 

be competent;

 

not to have restrictions of the performance of its functions arising through its related parties;

 

meet the qualification requirements put forward by the State Financial Service Markets Regulation Commission;

 

not to be convicted for the deliberate offences;

 

not to have been the chief executive officer of legal entities declared bankrupt or subjected to the forced liquidation procedure while being the chief executive officer during the last seven years.

 

2.3.5. The asset management company must have at least three qualified employees in the structural unit for the pension fund administration (including the head of such a structural unit) and two qualified employees each in the structural units for the pension fund administration of each separated unit (including the head of the structural unit charged with the functions of the personalised registration of the fund participants).

 

Section 3. Conditions of the Exercise of the Pension Fund Administration Business

 

3.1. The administrator must set up a reserve fund in accordance with the Law and the legislation on the regulation of activities of corporations.

 

3.2. The administrator must have proper technical equipment and information systems for the personalised registration of pension fund participants (hereinafter referred to as the "personalised registration information system") that meet the requirements of the State Financial Service Markets Regulation Commission, and make it possible to exercise the pension fund administration business in accordance with the requirements of the legislation regulating the pension fund administration business.

 

3.3. The administrator shall develop the internal pension fund administration policy and have it approved with the decision of its management body vested by the charter with the authority to make relevant decisions that should specify:

 

1) the organisational and functional structures of a legal entity, including the graphic image thereof, as well as the structural unit thereof that will exercise the non-state pension fund administration business and perform the personalised registration of pension fund participants;

 

2) a description of the interaction of structural units of the administrator and the organisation of the internal control over the performance of tasks laid upon them;

 

3) requirements for employees of the administrator;

 

4) the scheme and the procedure of the interaction of the administrator with other non-state pension provision entities within the organisational and functional structure of the administrator;

 

5) the functional scheme of the non-state pension fund administration process broken down by functions of specific units of the administrator;

 

6) the pension contract conclusion procedure;

 

7) the procedure of the conclusion of contracts on the pension disbursement during a specified term;

 

8) the procedure of the personalised registration of pension fund participants;

 

9) the procedure of the provision of the information to pension fund participants;

 

10) the procedure of setting up and using the reserve fund, as well as that of the investment of the reserve funds;

 

11) the procedure of keeping the register of entities providing agency services.

 

3.4. The administrator must be seated in the owned office or an office leased on the basis of a contract (contracts) with the owner for a period of at least thirty six months.

 

3.5. The office of the administrator must be equipped with a certified burglar and fire alarm system, and guarded on a 24/7 basis.

 

3.6. The administrator must store the archive documents on the basis of restricted access procedures. To this end, the administrator must equip a special room (office) for the storage of archive documents in the office where the administrator or its separated unit is located, or enter into a contract with another legal entity for the utilisation of its archive rooms, and use the services of archive institutions.

 

3.7. In case of the reduction in the number of qualified employees prescribed by these Licensing Conditions, the licensee must restore the required number within three months of the reduction.

 

3.8. The licensee shall notify boards of pension funds, with which contracts have been concluded on the pension fund administration in accordance with conditions of the contracts, as well as the depositors and participants of such pension funds in accordance with conditions of pension contracts of changes in its seat and the seats of its separated units.

 

3.9. The licensee shall notify the State Financial Service Markets Regulation Commission of the replacement of the software used in the personalised registration information systems within ten working days of the relevant decision.

 

After the licensee has provided the State Financial Service Markets Regulation Commission with the notice of the replacement of the software used in the personalised registration information systems, it shall be inspected for the conformity of the hardware and personalised pension fund participant registration information systems with the requirements put forward by the State Financial Service Markets Regulation Commission. The said software shall be allowed to be used in the licensee's personalised registration information systems, if no justified objection has been received from the State Financial Service Markets Regulation Commission within 30 days of the date of the notice.

 

3.10. In case of changes in the information provided in documents that supported the licence application, the licensee must serve an appropriate notice in writing to the State Financial Service Markets Regulation Commission within ten working days together with documents that confirm the said changes, or copies of such documents authenticated with the signature of the chief executive officer of the administrator and sealed by the licensee, namely:

 

the information about qualified employees under Annexes 1, 2, 3;

 

changes in the Internal Policy;

 

a copy of the licence for the exercise of professional activities on the securities market, namely, the asset management activities (in case of the re-issue, the duplicate licence issue or the obtainment of a new licence), and the notice of the annulment or the invalidation of such a licence;

 

changes and amendments to constituting documents registered in accordance with the established procedure (for the sole founder of a corporate pension fund);

 

copies of the document that confirms the title to the real estate or the contract of the office lease where the administrator is seated in line with requirements of item 3.4 hereof authenticated with the seal of the applicant and the signature of the applicant's chief executive officer.

 

3.11. The licensee must report to the State Financial Service Markets Regulation Commission and boards of pension funds with which it has entered into the pension fund administration contracts within time frames and in accordance with the procedure prescribed by the legislation.

 

3.12. The professional administrator must maintain the own capital at a level not lower than an amount equivalent to EUR 200,000 at the official exchange rate of the National Bank of Ukraine.

 

The entity that has obtained a licence for the asset management activities and a licence for the pension fund administration business must maintain the own capital at the level not lower than an amount equivalent to EUR 300,000 at the official exchange rate of the National Bank of Ukraine.

 

In case of the reduction in the own capital, the professional administrator must take measures envisaged by part four of Article 27 of the Law.

 

In case of the reduction in the own capital, the entity licensed to exercise the asset management activities and the licence for the pension fund administration business must notify the State Financial Service Markets Regulation Commission thereof.

 

3.13. In case of the exercise of the pension fund administration business, the licensee must meet the requirements of these Licensing Conditions both as of the date of the submission of the application and documents for the licence, and during the whole validity period of the said licence.

 

Section 4. Documents to Be Submitted for the Obtainment of a Licence for the Pension Fund Administration Business

 

4.1. In order to obtain a licence for the pension fund administration business, a legal entity intent on providing the non-state pension fund administration services (professional administrator) shall submit an application for the said licence to the State Financial Service Markets Regulation Commission in accordance with Annex 6.

 

The application for the licence shall be supported with the following documents:

 

1) a copy of the certificate of the state registration of a business entity or a copy of the certificate of the entry into the Universal State Register of Enterprises and Organisations of Ukraine, which should be either notarised or authenticated by issuer of the original document;

 

2) the information about qualified employees of the applicant being a professional administrator in accordance with Annex 1;

 

3) the audit opinion that confirms the set-up and the value of the paid-in authorised capital and the value of the own capital as of the last reporting date preceding the date of the submission of documents for the obtainment of the licence for the pension fund administration business. The audit opinion must be compiled by an auditor, whose information is entered into the register of auditors in accordance with the Procedure of Maintenance of the Register of Auditors Eligible for Auditing Financial Institutions approved with Instruction of the State Financial Service Markets Regulation Commission No. 86 of 19 February 2004 and registered with the Ministry of Justice of Ukraine on 16 April 2004 under No. 489/9088 (in the wording of Instruction of the State Financial Service Markets Regulation Commission No. 4239 of 24 June 2005 registered with the Ministry of Justice of Ukraine on 18 July 2005 under No. 768/11048);

 

4) the information about the conformity of the hardware and the personalised pension fund participant registration systems with requirements put forward by the State Financial Service Markets Regulation Commission under Annex 5;

 

5) the documentation of the personalised registration information system, namely:

 

a description of the personalised registration information system;

 

a user manual for the utilisation of the software of the personalised registration information system;

 

a system administrator manual for the utilisation of the software of the personalised registration information system;

 

copies of licences issued to the software developer and the applicant for all software facilities used in the personalised registration information system;

 

copies of licences of the Special Telecommunication Systems and Information Protection Department of the Security Service of Ukraine issued to the applicant for the exercise of business of the utilisation and the operation of cryptography systems and encryption facilities;

 

certificates of conformity of the information technical protection facilities used in the personalised registration information system;

 

copies of licences of the Special Telecommunication Systems and Information Protection Department issued to the software developer for the exercise of business of the development, the use, and the operation of cryptography systems and information encryption facilities, and the provision of services in the field of the cryptographic information protection;

 

6) the Internal Policy that meets requirements of item 3.3 of these Licensing Conditions;

 

7) copies of the document that confirms the title to the real estate or the contract of the office lease where the administrator is seated in line with requirements of item 3.4 hereof authenticated with the seal of the applicant and the signature of the applicant's chief executive officer.

 

4.2. In order to obtain a licence for the pension fund administration business, a legal entity being a sole founder of a corporate pension fund that has made a decision to administer the said fund on its own shall submit an application for the said licence to the State Financial Service Markets Regulation Commission in accordance with Annex 6.

 

The application for the licence shall be supported with the following documents:

 

1) a copy of the certificate of the state registration of a business entity or a copy of the certificate of the entry into the Universal State Register of Enterprises and Organisations of Ukraine, which should be either notarised or authenticated by issuer of the original document;

 

2) a copy of the decision of the highest management body or the owner of the founder of the corporate pension fund on the independent administration of the fund authenticated in accordance with the procedure prescribed by the legislation;

 

3) notarised copies of registered constituting documents and changes thereto;

 

4) the information about qualified employees of the applicant being a sole founder of a corporate non-state pension fund in accordance with Annex 3;

 

5) the information about the conformity of the hardware and the personalised pension fund participant registration systems with requirements put forward by the State Financial Service Markets Regulation Commission under Annex 5;

 

6) a copy of the order establishing the dedicated structural unit for the corporate pension fund administration;

 

7) the information about founders and related parties of the legal entity being a sole founder of the corporate pension fund in accordance with Annex 11;

 

8) the documentation of the personalised registration information system, namely:

 

a description of the personalised registration information system;

 

a user manual for the utilisation of the software of the personalised registration information system;

 

a system administrator manual for the utilisation of the software of the personalised registration information system;

 

copies of licences issued to the software developer and the applicant for all software facilities used in the personalised registration information system;

 

copies of licences of the Special Telecommunication Systems and Information Protection Department of the Security Service of Ukraine issued to the applicant for the exercise of business of the utilisation and the operation of cryptography systems and encryption facilities;

 

certificates of conformity of the information technical protection facilities used in the personalised registration information system;

 

copies of licences of the Special Telecommunication Systems and Information Protection Department issued to the software developer for the exercise of business of the development, the use, and the operation of cryptography systems and information encryption facilities, and the provision of services in the field of the cryptographic information protection;

 

9) the Internal Policy that meets requirements of item 3.3 of these Licensing Conditions;

 

10) copies of the document that confirms the title to the real estate or the contract of the office lease where the administrator is seated in line with requirements of item 3.4 hereof authenticated with the seal of the applicant and the signature of the applicant's chief executive officer.

 

4.3. In order to obtain a licence for the pension fund administration business, an asset management company intent on providing the non-state pension fund administration services shall submit an application for the said licence to the State Financial Service Markets Regulation Commission in accordance with Annex 6.

 

The application for the licence shall be supported with the following documents:

 

1) a copy of the certificate of the state registration of a business entity or a copy of the certificate of the entry into the Universal State Register of Enterprises and Organisations of Ukraine, which should be either notarised or authenticated by issuer of the original document;

 

2) the audit opinion that confirms the set-up and the value of the paid-in authorised capital and the value of the own capital as of the last reporting date preceding the date of the submission of documents for the obtainment of the licence for the pension fund administration business. The audit opinion must be compiled by an auditor, whose information is entered into the register of auditors in accordance with the Procedure of Maintenance of the Register of Auditors Eligible for Auditing Financial Institutions approved with Instruction of the State Financial Service Markets Regulation Commission No. 86 of 19 February 2004 and registered with the Ministry of Justice of Ukraine on 16 April 2004 under No. 489/9088 (in the wording of Instruction of the State Financial Service Markets Regulation Commission No. 4239 of 24 June 2005 registered with the Ministry of Justice of Ukraine on 18 July 2005 under No. 768/11048);

 

3) the information about qualified employees of the applicant being an asset management company in accordance with Annex 2;

 

4) the information about the conformity of the hardware and the personalised pension fund participant registration systems with requirements put forward by the State Financial Service Markets Regulation Commission under Annex 5;

 

5) the documentation of the personalised registration information system, namely:

 

a description of the personalised registration information system;

 

a user manual for the utilisation of the software of the personalised registration information system;

 

a system administrator manual for the utilisation of the software of the personalised registration information system;

 

copies of licences issued to the software developer and the applicant for all software facilities used in the personalised registration information system;

 

copies of licences of the Special Telecommunication Systems and Information Protection Department of the Security Service of Ukraine issued to the applicant for the exercise of business of the utilisation and the operation of cryptography systems and encryption facilities;

 

certificates of conformity of the information technical protection facilities used in the personalised registration information system;

 

copies of licences of the Special Telecommunication Systems and Information Protection Department issued to the software developer for the exercise of business of the development, the use, and the operation of cryptography systems and information encryption facilities, and the provision of services in the field of the cryptographic information protection;

 

6) a copy of the licence for the exercise of professional activities on the securities market, namely, the asset management activities;

 

7) a copy of the order establishing the dedicated structural unit for the pension fund administration;

 

8) the Internal Policy that meets requirements of item 3.3 of these Licensing Conditions;

 

9) copies of the document that confirms the title to the real estate or the contract of the office lease where the administrator is seated in line with requirements of item 3.4 hereof authenticated with the seal of the applicant and the signature of the applicant's chief executive officer.

 

4.4. In case of the availability of separated units of the administrator that are entered into the Register (for units of financial institutions) that are intent on exercising the pension fund administration business on the basis of the licence obtained by them, the applicant must provide the information about each unit of this kind in its application for the licence.

 

The application must be supported with documents on each separated units as listed in item 6.2 of these Licensing Conditions.

 

4.5. The documents submitted to the State Financial Service Markets Regulation Commission according to requirements of these Licensing Conditions must be set forth in the state language.

 

4.6. Documents on two and more pages must be numbered, stringed and authenticated with the applicant's seal.

 

4.7. The applicant shall be liable in accordance with requirements of the legislation for the trueness of the information provided in the application for the licence and the documents attached thereto.

 

Section 5. Procedure of the Submission and the Review of Documents for the Licence Obtainment

 

5.1. In order to obtain a licence, the applicant shall submit an application for the licence and other documents according to Section 4 of these Licensing Conditions to the State Financial Service Markets Regulation Commission.

 

5.2. The documents shall be submitted by a representative of the applicant, who shall present a passport or a substituting document making it possible to identify the person, and a document confirming his powers executed in accordance with the procedure prescribed by the legislation.

 

5.3. The application for the licence and supporting documents shall be received on the basis of an inventory, whose copy shall be issued to the applicant with an indication of the date of the acceptance of documents by the State Financial Service Markets Regulation Commission and a signature of the responsible officer of the State Financial Service Markets Regulation Commission.

 

5.4. An application for a licence shall be left unconsidered, if:

 

1) the application has been signed by an individual, who has no authority to do so;

 

2) at least one of the documents to be attached to the application for the licence is missing;

 

3) the documents are executed with the violation of requirements of the Licensing Conditions.

 

5.5. The notice of the licence application's being left unconsidered shall be served to the applicant in writing with the indication of grounds therefor within the time frame envisaged for the licence issue. Upon elimination of reasons for the decision to leave the licence application unconsidered, the applicant may re-apply for the licence.

 

5.6. The State Financial Service Markets Regulation Commission shall make a decision to issue the licence or to deny the licence within thirty calendar days of the receipt of the application for the licence and the supporting documents.

 

5.7. The notice of the decision to grant or deny the licence shall be sent (issued) to the applicant in writing within three working days of the relevant decision's having been made. The decision to deny the licence shall specify the grounds therefor.

 

5.8. The licence may be denied on the following grounds:

 

1) the false data in documents submitted by the applicant for obtaining a licence;

 

2) the non-conformity of the applicant with the Licensing Conditions ascertained on the basis of the submitted documents.

 

5.9. If the licence has been denied due to the discovery of false data in the documents submitted by the applicant, the applicant may submit a new application to the State Financial Service Markets Regulation Commission for the licence not sooner than three months of the date of the decision to deny the licence.

 

5.10. If the licence has been denied due to the lack of conformity of the applicant with these Licensing Conditions, the applicant may submit a new application for the licence to the State Financial Service Markets Regulation Commission upon the elimination of grounds for the licence denial.

 

5.11. The decision to deny a licence may be disputed with court.

 

5.12. The State Financial Service Markets Regulation Commission shall have the right to require the applicant, if necessary, to provide the explanations, the necessary information and documents that confirm the information available in the documents submitted by the applicant.

 

5.13. The State Financial Service Markets Regulation Commission shall have the right to inspect the applicant in order to verify the information provided for the obtainment of the licence.

 

5.14. In case of the decision to grant a licence, the State Financial Service Markets Regulation Commission must issue the licence within five working days of receipt of the documentary proof of the licence fee.

 

5.15. The responsible officer of the State Financial Service Markets Regulation Commission shall indicate the date of the acceptance of documents confirming the payment of the licence fee by the applicant on the copy of the inventory list issued to the applicant on acceptance of the application for the licence.

 

5.16. Should the applicant fail to submit the proof of the licence fee payment within thirty calendar days of the notice of the decision to issue a licence being sent to him or fail to appear at the State Financial Service Markets Regulation Commission for the obtainment of the executed licence, the State Financial Service Markets Regulation Commission shall have the right to reverse the decision to issue a licence or make a decision to invalidate such a licence.

 

5.17. Upon the issue of the pension fund administration business licence to the applicant, the information about the issued licence shall be entered by the State Financial Service Markets Regulation Commission into the Register within three working days of the licence issue for the entities registered as financial institutions.

 

Section 6. Requirements for the Exercise of Business by Separated Units

 

6.1. The administrator shall have the right to exercise the pension fund administration business via its separated units on the basis of the licence obtained thereby subject to meeting the following conditions:

 

1) the information about such separated units must be entered into the Register (in case of a professional administrator and an asset management company);

 

2) the powers in respect of the exercise of the business or operations (functions) related to the pension fund administration must be specified in the charter of the separated unit of the administrator;

 

3) the separated unit of the administrator must meet the requirements of items 3.2 and 3.4 to 3.7 of these Licensing Conditions (except for a separated unit of the administrator that provides the advertising services only);

 

4) the administrator must provide the information about the separated unit in accordance with the procedure prescribed by the Licensing Conditions (except for a separated unit of the administrator that provides the advertising services only);

 

6.2. In case of the establishment of a separated unit by the licensee for the exercise of the pension fund administration business via such a separated unit (except for a separated unit of the administrator that provides the advertising services only), the licensee must submit an application to the State Financial Service Markets Regulation Commission for the review of documents of separated units that will operate on the basis of the licence for the non-state pension fund business in accordance with Annex 7.

 

The application shall be supported with the following documents:

 

1) a copy of the charter of the separated unit of the administrator;

 

2) the information about qualified employees of the separated unit of the applicant in accordance with Annex 4;

 

3) the information about the conformity of the hardware and the information systems used by the separated unit of the administrator for the personalised registration of pension fund participants with requirements put forward by the State Financial Service Markets Regulation Commission under Annex 5;

 

4) copies of the document that confirms the title to the real estate or the contract of the office lease where the separated unit of the administrator is seated in line with requirements of item 3.4 hereof authenticated with the seal of the administrator and the signature of the administrator's chief executive officer.

 

6.3. In its operations, the separated unit shall be guided by the Separated Unit Charter and the Internal Policy.

 

6.4. The State Financial Service Markets Regulation Commission may schedule an inspection of the compliance of the separated unit with these Licensing Conditions after the submission of the application and the appropriate documents by the administrator.

 

6.5. The State Financial Service Markets Regulation Commission shall send the administrator a notice specifying the separated units that may administer pension funds or an appropriate justified refusal in writing within thirty calendar days of the submission of the application and the appropriate documents.

 

6.6. If the location of the separated unit is changed, the licensee must notify the State Financial Service Markets Regulation Commission thereof in writing within three working days of the decision of the management of the licensee to do so. The said notice must specify the new location of the separated unit. The sending date indicated on the stamp of the post office in the location of the licensee shall be deemed to be the sending date of such a notice.

 

The licensee shall notify boards of pension funds, with which contracts have been concluded on the pension fund administration in accordance with conditions of the contracts, as well as the depositors and participants of such pension funds in accordance with conditions of pension contracts of changes in the seats of its separated unit.

 

In case of the change in the office occupied by the separated unit, the licensee must notify the State Financial Service Markets Regulation Commission thereof in writing within three working days of the receipt of the document confirming the title to the real estate or the conclusion of the office lease contract, and provide the authenticated copies of the relevant supporting documents.

 

6.7. In case of the liquidation of the separated unit that has exercised the pension fund administration business within the scope of the licence obtained by the administrator, or in case of the termination of the exercise of such business by the separated unit within the scope of the obtained licence, the administrator must notify the State Financial Service Markets Regulation Commission accordingly in writing within seven working days of the liquidation date of such a separated unit or the date of the termination of the administration business by such a separated unit. The State Financial Service Markets Regulation Commission shall enter the relevant information into the Register.

 

Section 7. Re-issue of a Licence

 

7.1. The following shall be the grounds for the re-issue of a licence:

 

the alteration of the name of a legal entity (unless the alteration of the name is not associated with the separation and the termination of a legal entity being the administrator with the succession by means of the merger, the accession, the division or the transformation);

 

the change in the location of the legal entity.

 

7.2. In case of the emergence of grounds for the licence re-issue, the administrator must submit an application for the licence re-issue in accordance with Annex 8 to the State Financial Service Markets Regulation Commission within seven working days after the registration of such changes in accordance with the established procedure.

 

7.3. The licence re-issue application must be supported with the following documents:

 

1) a copy of the certificate of the state registration of a business entity that contains the relevant changes (either notarised or authenticated by the issuing agency);

 

2) notarised copies of changes to constituting documents in respect of changes in the name and/or the seat registered in accordance with the established procedure (for a sole founder of a corporate pension fund);

 

3) a copy of the documentary proof of the licence re-issue fee;

 

4) the original licence.

 

7.4. Within ten working days of the date of registration of the application for the re-issue of a licence and the documents attached thereto, the State Financial Service Markets Regulation Commission must issue the licence re-issued on the new letterhead incorporating the changes indicated in the licence re-issue application.

 

7.5. The State Financial Service Markets Regulation Commission shall make a decision to invalidate the licence letterhead that has been re-issued.

 

Within three working days of such a decision, the appropriate information about the re-issue of a licence granted to a financial institution shall be entered by the State Financial Service Markets Regulation Commission into the Register.

 

7.6. The administrator that has applied for the licence re-issue and submitted the appropriate documents shall operate on the basis of the certificate of acceptance of the application for the re-issue of the licence for the pension fund administration business to be issued by the State Financial Service Markets Regulation Commission in case of the submission of the application for the licence re-issue.

 

Section 8. Issue of a Duplicate Licence

 

8.1. The loss of the licence letterhead or the damage to the licence letterhead shall constitute the grounds for the issue of a duplicate licence.

 

8.2. In order to obtain a duplicate licence, the administrator must apply to the State Financial Service Markets Regulation Commission for the issue of the duplicate licence in accordance with Annex 9.

 

The application for the issue of the duplicate licence shall be supported with the following documents:

 

1) a copy of the documentary proof of the duplicate licence issue fee;

 

2) the original licence (in case of the availability of the damaged licence letterhead) or a copy of the printed mass medium with the publication of the announcement of the loss of the licence letterhead.

 

8.3. Within ten working days of the date of receipt of the application for the issue of a duplicate licence and the documents attached thereto, the State Financial Service Markets Regulation Commission must issue the duplicate licence to the applicant.

 

8.4. In case of the issue of the duplicate licence, the State Financial Service Markets Regulation Commission shall make a decision to invalidate the lost or damaged licence letterhead.

 

In case of the issue of the duplicate licence to a financial institution, the relevant information shall be entered into the Register within three working days of the relevant decision of the State Financial Service Markets Regulation Commission.

 

8.5. The administrator that has applied for the duplicate licence and submitted the appropriate documents shall operate on the basis of the certificate of acceptance of the application for the issue of the duplicate licence for the pension fund administration business to be issued by the State Financial Service Markets Regulation Commission in case of the submission of the application for the issue of the duplicate licence.

 

Section 9. Annulment of a Licence

 

9.1. The following may be the grounds for the annulment of a licence:

 

an application of the administrator for the licence annulment;

 

the decision to cancel the state registration of the administrator as a business entity (legal entity);

 

the detection of the false information in documents submitted by the applicant (the licensee) for the obtainment of the licence under these Licensing Conditions;

 

the ascertainment of the fact of the transfer of the licence to another legal entity or individual for the exercise of the pension fund administration business;

 

the inability of the administrator to ensure the compliance with these Licensing Conditions;

 

the commencement of the administrator liquidation procedure in accordance with the legislation.

 

the inability of the administrator to bring the value of the own capital into conformity with the target value within time frames prescribed by Law;

 

the failure of the administrator to comply with the instruction (injunction) of the State Financial Service Markets Regulation Commission sent to the administrator for the purposes of the elimination of the detected violations of the financial service legislation;

 

the failure of the administrator to enter into pension fund administration contracts within 12 months of the licence issue date;

 

the application of three or more sanctions to the administrator during a year.

 

9.2. In case of the decision made by the administrator to annul the licence, the administrator must submit an application to the State Financial Service Markets Regulation Commission for the annulment of the licence for the non-state pension fund administration business in accordance with Annex 10.

 

The licence annulment application must be supported with the following documents:

 

1) a copy of the decision of the relevant management body of the administrator on the licence annulment authenticated by the chief executive officer of the administrator;

 

2) Form No. 1 "Balance Sheet" (Annex to Accounting Policy (Standard) 2 "Balance Sheet" approved with Order of the Ministry of Finance of Ukraine No. 87 of 31 March 1999 and registered with the Ministry of Justice of Ukraine on 21 June 1999 under No. 396/3689) of the administrator for the latest reporting period;

 

3) the (duplicate) original licence.

 

9.3. Within thirty working days of the detection of grounds for the licence annulment, the State Financial Service Markets Regulation Commission shall make a decision to annul the licence to be issued (sent) to the licensee with the indication of grounds for the annulment within three working days of the decision date.

 

9.4. The decision to annul the licence may be disputed at the court.

 

9.5. The decision to annul the licence for the pension fund administration business shall be served in writing by the State Financial Service Markets Regulation Commission to all boards of pension funds, with which the administrator has entered into the pension fund administration contracts, within one working day of the date of the said decision, and must be published.

 

The decision to annul the licence shall be published within one working day of the date of the said decision on the web-site of the State Financial Service Markets Regulation Commission, and, within five working days, in the printed mass media determined by the State Financial Service Markets Regulation Commission.

 

9.6. In case of the annulment of the licence for the pension fund administration business, the administrator must cause the system of the personalised registration of participants of non-state pension funds and the relevant documentation to be fully handed over to the new administrator in accordance with the procedure prescribed by the State Financial Service Markets Regulation Commission.

 

9.7. The administrator, whose licence has been annulled, shall terminate the performance of the pension fund administration functions from the date of the transfer of the personalised registration system to the new administrator, and must assist the new administrator free of charge with the performance of duties that have come into existence before the transfer of the personalised registration system to the administrator in question.

 

9.8. In case of the annulment of the licence for the pension fund administration business, a sole founder of the corporate pension fund that simultaneously is an administrator of the said fund shall be eligible for the repeated obtainment of the said licence not earlier than in one year of the licence annulment date; a professional pension fund administrator and an asset management company shall be eligible therefor at any time.

 

Section 10. State Control

 

10.1. The state control over the compliance with these Licensing Conditions shall be exercised by the State Financial Service Markets Regulation Commission, the territorial directorates thereof in accordance with the legislation.

 

Other state authorities shall control the activities of administrators within the scope of their competence.

 

10.2. The administrator must notify the State Financial Service Markets Regulation Commission of the imposition of sanctions related to the exercise of the pension fund administration business by other state authorities within ten working days thereof, and provide copies of the relevant supporting documents.

 

10.3. In case of the detection of violations in the course of the control over the compliance with these Licensing Conditions, the penalties envisaged by the legislation of Ukraine shall be applied.

 

A.A. RYBALCHENKO, Member of the Commission, Director of the Non-state Pension Fund Supervision Department



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