Ukraine takes first step into the European financial space by linking to Poland’s CSD
“Placement of Ukrainian municipal bonds on the European market will help to attract capital and create ways increasing the inflow of foreign investments to Ukraine […] This initiative also contributes to integration of Ukraine into the European financial space”.
Krajowy Depozyt Papierów Wartościowych (Central Securities Depository of Poland, KDPW) and Національний депозитарій України (National Depository of Ukraine, NDU) have signed an agreement establishing a direct operational link with the Ukrainian market.
The link with Ukraine will allow KDPW to open a depository account in the NDU system in order to make municipal bonds issued by Ukrainian regional government available to foreign investors.
Including the link with the Ukrainian CSD, KDPW currently maintains 22 operational links with foreign CSDs. Six of these are direct links, including two links with international CSDs (Clearstream Banking Luxembourg and Euroclear Bank), and 16 are indirect links (2 via international CSDs and 2 via custodian banks).
Until now, operational links with foreign CSDs have been built to enable the clearing and settlement of transactions in shares of companies that are dual-listed on the Warsaw Stock Exchange and foreign trading platforms. However, the link with Ukraine will allow KDPW to open a depository account in the NDU system in order to make municipal bonds issued by Ukrainian regional government available to foreign investors. In the future, the agreement may be extended to cover other financial instruments.
Link paves the way for Ukrainian municipal bonds on international markets
Maciej Trybuchowski, President and CEO of KDPW, said: “Since the beginning of the war, Poland has supported Ukraine’s efforts to protect the country’s sovereignty and territorial integrity. Poland’s authorities, private and state-owned enterprises and institutions are joining the plan to rebuild the war-time devastation. The agreement concluded between our CSDs is part of our support for the Ukrainian financial market and it paves the way for Ukrainian local governments to issue municipal bonds on international markets.”
Oleksiy Yudin, NDU’s Chairman of the Board, commented: “Placement of Ukrainian municipal bonds on the European market will help to attract capital and create ways increasing the inflow of foreign investments to Ukraine. We are grateful to our Polish colleagues for the support of Ukraine that we felt during our joint work. Those extremely difficult war months we actively worked to build a link that would expand the range of services for participants in the capital market of Ukraine. This initiative also contributes to integration of Ukraine into the European financial space”.
Sławomir Panasiuk, Vice-President of KDPW, added: “I am certain that the agreement between our institutions is the beginning of a long-term cooperation and will be beneficial for both the Ukrainian and Polish markets. The reconstruction of Ukrainian cities and economy will require significant financial resources, and the capital market should play a significant role in this process. We are very well prepared for this, both infrastructurally and organisationally.”
Maryna Adamovska, a Member of the NDU Board, stated: “Building a link with the Polish CSD is of significant importance for us, because it directly contributes to strengthening the financial capacity of Ukraine. Undoubtedly, the enforcening of cooperation with our Polish partners is very important, as it serves the convergence of operational approaches between CSDs. Thanks to the correspondent relations between the NDU and KDPW, we will additionally receive the practical benefit of studying the experience of the European depository system for the Ukrainian market.”