UAH-USD Future: Revival of Exchange-Traded Derivatives Market Begins

For Immediate Release

UAH-USD Future: Revival of Exchange-Traded Derivatives Market Begins

Kyiv, Ukraine (9 October 2020) – The Ukrainian Exchange with support from the USAID Financial Sector Transformation Project held a panel discussion, UAH/USD Future as an Instrument to Make Money and Hedge Risks. The panelists discussed plans of Ukrainian regulators to develop exchange-traded derivatives and those of the exchange to generate initial liquidity, as well as improving tax legislation and launching new exchange-traded instruments.

"The derivatives market is once again just at the beginning of its road. The Law has opened up new opportunities, but there is still a lot of work to be done on the infrastructure development, including the creation of a full-fledged exchange holding company," said Dmytro Tarabakin, Commissioner of the National Securities and Stock Market Commission. The participating experts also included Volodymyr Kuzio, Head of NBFI Development of the USAID Financial Sector Transformation Project; Oleksiy Lupin, Acting Director of Open Markets Department of the National Bank of Ukraine; Olena Korobkova, Chief Executive of the Independent Association of Banks of Ukraine, and Oleksiy Sukhorukov, Director for Development of the Ukrainian Exchange.

In August 2020, after a two-year break, the exchange-traded derivatives market revived in Ukraine with the appearance of a future contract on UAH-USD exchange rate. At this stage, former and new participants are connecting to the market. The experts emphasized that the new Law of Ukraine #738-IX eliminated a number of legal risks, improved conditions for the use of derivatives and made them attractive for a wider range of professional market participants and their clients. The UAH/USD future will provide additional commercial opportunities for banks, traders, and ultimate investors and will allow market participants to hedge their currency positions. After the launch of UAH/USD futures, market participants expect the appearance of new derivative instruments on grain, oil, other currency pairs, etc. 

Volodymyr Kuzio, Head of NBFI Development of the USAID Financial Sector Transformation Project stated, "UAH/USD future is an important instrument to start the development of the derivatives market and we are supportive of its launch on the market. This is a signal that the market can develop, there is a demand for derivative instruments, and exchanges are willing to supply mechanisms for market hedging of investor risks and implement new business opportunities for them. However, it is also necessary to build a post-trade infrastructure that will ensure the fulfillment of contracts and manage client risks effectively."

"Derivatives market is one of the key elements of a full-fledged capital market," emphasized Artemiy Yershov, Board Chairman of the Ukrainian Exchange. "The UAH/USD future naturally complements the current over - the - counter market of forwards and, as an instrument for managing exchange risks, has its advantages. With the regulatory support, we expect to see all active foreign exchange market players participating in our trades by the end of this year."

About Ukrainian Exchange

The Ukrainian Exchange is a leading organized market of stocks and derivatives in Ukraine. Launched in March 2009, the exchange became a technological leader of the Ukrainian stock market from the first months of its operation. It was the first to introduce an order-driven market, Internet trading, repo agreements, the Central Counterparty (CCP) technology, and the derivatives market. For more information, please visit: http://www.ux.ua

About USAID

USAID is the world's premier international development agency and a catalytic actor driving development results. USAID has partnered with Ukraine since 1992. For additional information about USAID, you may also visit its website: http://www.usaid.gov/ukraine or its Facebook page at: https://www.facebook.com/USAIDUkraine.

About the USAID Financial Sector Transformation Project

The USAID Financial Sector Transformation Project supports financial sector reform in Ukraine and provides technical assistance in the following focus areas: consumer lending, legal and regulatory reform, increasing access to finance in the non-bank financial sector; expanding digital finance solutions; and promoting better involvement of the people in financial markets and financial consumer protection. More information about the USAID Financial Sector Transformation Project is available at http://www.fst-ua.info/ua/ та https://www.facebook.com/FSTProject.