FEAS Yearbook FEAS Yearbook 2002 | Page 84

FEDERATION OF EURO-ASIAN STOCK EXCHANGES > YEARBOOK 2002/2003 > PAGE 82 UKRAINIAN STOCK EXCHANGE LETTER FROM THE CHAIRMAN The Exchange carried out activities on the development of new services, improvement of legislation and a normative basis to supply trader activities on the organized market. This past year has not shown an increase in activity on the securities market of the Ukrainian Stock Exchange (USE). The annual exchange stock turnover decreased 51% times in comparison to 2001. The number of transactions completed decreased 1.31 times. This reduction in exchange figures can be explained by a number of objective factors. First of all, there was a change in regulations for bill trading,which narrowed the organized market. According to Ukrainian legislation at the middle of the year 2002, the market tool ‘bill’ disappeared from the market. In 2001 the volume of bill trading made 62% of annual exchange turnover. The second factor was the priority, in the process of privatization in the Ukraine, which influenced the development of the corporate securities market. Consolidation of huge shares resulted in a reduction of stocks of investment in attractive companies. At the same time the majority of shares realized through the stock exchange experienced a low-level liquidity because of the absence of influential opportunities. The political situation did not promote an improvement in the investment climate of the Ukraine. In spite of difficult situations in the management of the USE, the Exchange carried out activities on the development of new services, improvement of legislation and a normative basis to supply trader activities on the organized market. It is our belief that the chosen strategy will gradually result in the creation of a transparent, liquid investment attractive to the national capital market, increasing the market’s role as a way of solving the questions of accelerating the economic growth in the country. During the 8th Annual General Assembly of FEAS held in Kiev Ukraine, the USE was elected Vice President of the Federation for a 2 year term ending May 2005. Valentin Oskolsky Chairman of the Board HISTORY AND DEVELOPMENT The Ukrainian Stock Exchange (USE) is the pioneer in the capital market of the Ukraine and was created according to the law “On Securities and Stock Exchanges” and registered by decision of the Cabinet of Ministers of the Ukraine on 29 October 1991. The USE is a closed joint-stock company. Its authorized capital is divided into 222 ordinary named shares that belong to legal entities. The USE was granted a registration certificate by the Securities and Stock Market State Commission in June 1997 according to the law “On State Regulation of Securities Market in Ukraine.” Since June 1998 the USE has been self- regulating and has 140 registered brokerage companies as members. There are 12 USE branches. In 1993, the USE became a pioneer of money privatization and implemented the exchange mechanism of price creation. University. Additionally, the USE has developed relationships with the Frankfurt, Korean, Istanbul, Moscow and Kyrgyz Stock Exchanges along with the Austrian Options and Futures Exchange. The USE is a member of the Coordinating Council for solving questions about functioning of securities market as charged by the President of the Ukraine. The USE is member of the Consulting & Experts Council in the Securities and Stock Market State Commission. The official publication is “Hermes” which can be found in the daily newspaper, “Business Ukraine.” The USE has created many educational programs in association with the Slavonic FUTURE OUTLOOK The following are planned for the coming year: implementation of the System of Electronic Trading (SET of USE); expansion on SET of the secondary securities turnover and trading of internal state loan bonds; creation of conditions and bases for the formation and development of market derivatives; growing participation of the USE in privatization processes in the implementation of the State Privatization Program and the law of Ukraine “On State Budget of Ukraine for 2003”; further improvement of technologies for trading state- owned shares of privatized companies; promotion of the attraction of direct national and foreign investments to develop strategically important industries during the process of privatization; development of exchange information areas, expansion of publishing, scientific, methodical and educational activities in order to prepare specialists for the national capital market; strengthening international cooperation with foreign stock exchanges and international financial organizations.