Draft Law of Ukraine

''On Commodity Exchange''

This draft defines the procedure for founding and operating commodity exchanges.

This draft provides definitions of such concepts as ‘exchange transaction’, ‘exchange trade’, ‘exchange seat’, ‘exchange clients’, ‘clearing activity’ and ‘commodity derivative’. According to this draft, the term ‘commodity exchange’ shall be understood as the organization uniting legal entities and natural persons to allow them to participate in exchange trade that takes place on the commodity exchange market.

This draft law stipulates that commodity exchange can be founded by not less than 20 legal entities or natural persons. Stake owned by the founder in the authorized fund of a commodity exchange shall not exceed 5 percent thereof. State registration of commodity exchange is to take place in line with procedure established in the entrepreneurship legislation of Ukraine.

Commodity exchange is subject to mandatory accreditation in line with the procedure set forth by the Cabinet of Ministers of Ukraine.

To protect the interests of commodity exchanges and their members, commodity exchanges may unite in unions, associations and other alliances.

According to this draft, the highest governing body of commodity exchange is general meeting of its members. Chief executive’s directorate is supposed to perform routine administration.

It is stipulated that realty cannot be an object of exchange auctions. Exchange agreements will be considered concluded from the moment of their registration with a commodity exchange and will not need further notarization.