Settlement Center

Settlement Center (Ukrainian: Розрахунковий центр; full name Public Joint-Stock Company "Settlement Center for Servicing Financial Market Agreements") is a Ukrainian financial-market infrastructure institution based in Kyiv. It was created in 2012–2013 on the basis of the All-Ukrainian Securities Depository (VDPT) following the adoption of the Law of Ukraine "On the Depository System of Ukraine". The institution was designed to perform monetary settlement for securities and other financial instruments transactions concluded on and off stock exchanges, particularly on a delivery-versus-payment (DVP) basis. Originally established as a specialized bank, Settlement Center held a banking licence, a general currency licence from the National Bank of Ukraine, and a licence from the National Commission on Securities and Stock Market for professional activity on the stock market — clearing activity. It belonged to the group of banks with a state share. As of 1 January 2020, its main shareholder was the National Bank of Ukraine with 83.5% of shares; other state institutions — the Cabinet of Ministers of Ukraine and the Ministry of Finance of Ukraine — were also shareholders, alongside a number of minority individual shareholders. From 12 September 2013 it was a participant of the Deposit Guarantee Fund for Individuals (certificate No. 224). In 2020–2021, Ukrainian legislation on capital markets and organized commodity markets separated clearing activity from banking activity as of 1 July 2021. On 3 February 2021, the bank's shareholders decided to terminate banking activity without closing the legal entity, and on 30 June 2021 the bank completed the cessation of banking activity. The institution continued as a non-banking financial institution focused on clearing. Its current services include opening and maintaining clearing accounts for clearing participants and their clients, recording rights and obligations under securities transactions, derivatives contracts, and information on funds and securities submitted for settlement, as well as clearing of rights and obligations and monetary settlement on a delivery-versus-payment basis. The company also provides REPO, SWAP and OTC with central counterparty services, electronic document flow, and communication services. It publishes a development strategy for 2026–2028, risk management and financial monitoring information, and PFMI disclosures.

The creation of the Settlement Center was driven by the Law of Ukraine "On the Depository System of Ukraine", adopted by the Verkhovna Rada on 6 July 2012. The law envisaged a new infrastructure element of the Ukrainian financial market — a settlement center for servicing financial market agreements. On 8 November 2012, the Council of the National Bank of Ukraine decided to recommend that the NBU Board initiate the creation of the Settlement Center on the basis of the All-Ukrainian Securities Depository (VDPT). On 16 November 2012, the NBU Board decided to initiate a general meeting of VDPT shareholders to consider the creation of the Settlement Center on the basis of VDPT. On 25 December 2012, VDPT shareholders supported the NBU proposal; the NBU also proposed that shareholders consider selling VDPT shares, with applications accepted until 31 January 2013. Based on the applications, agreements were concluded for the purchase and sale of securities in an amount fully ensuring the NBU's compliance with the law and allowing a decision on transforming VDPT into the Settlement Center. On 28 March 2013, VDPT shareholders decided to change the type and name of the company from private joint-stock company "All-Ukrainian Securities Depository" to public joint-stock company "Settlement Center for Servicing Financial Market Agreements". The institution operated as a specialized bank. It held a banking licence, a general currency licence from the National Bank of Ukraine, and a licence from the National Commission on Securities and Stock Market for professional activity on the stock market — clearing activity. From 12 October 2013 it held an indefinite licence from the National Commission on Securities and Stock Market for clearing activity. From 12 September 2013 it was a participant of the Deposit Guarantee Fund for Individuals (certificate No. 224). It belonged to the group of banks with a state share; as of 1 January 2020, the main shareholder was the National Bank of Ukraine with 83.5% of shares, and other state institutions — the Cabinet of Ministers of Ukraine and the Ministry of Finance of Ukraine — were also shareholders, along with a number of minority individual shareholders, among whom businessman Rinat Akhmetov held the largest block. In 2020, the Verkhovna Rada amended the Law "On Securities and Stock Market", which was approved in a new edition and received a new name — the Law "On Capital Markets and Organized Commodity Markets". It introduced fundamental changes to all types of activity in capital markets and the functioning of their participants, aimed at bringing them to modern world standards. In particular, the law provided new rules for clearing activity, which from 1 July 2021 was separated from banking activity. Thus, in 2021 the transformation of the Settlement Center into a non-banking financial institution was planned. On 3 February 2021, the bank's shareholders decided to terminate banking activity without closing the legal entity, and on 30 June 2021 the bank completed the cessation of banking activity. Active work was underway to improve the internal infrastructure of the Settlement Center, bring its activities into compliance with new legislation and world standards, and transform it into a modern clearing institution. The course for change was set at the end of 2019, when the Development Strategy of the Public Joint-Stock Company "Settlement Center for Servicing Financial Market Agreements" for 2020–2022 was developed and approved by the Supervisory Board in January 2020, envisaging the transformation of the Settlement Center. The company continues to operate as a clearing institution, publishing a development strategy for 2026–2028 and providing clearing, settlement, REPO, SWAP and OTC with central counterparty services.

• Verkhovna Rada adopts the Law of Ukraine "On the Depository System of Ukraine", envisaging the creation of a settlement center.

• Council of the National Bank of Ukraine recommends initiating the creation of the Settlement Center on the basis of VDPT.

• NBU Board decides to initiate a general meeting of VDPT shareholders to consider creating the Settlement Center.

• VDPT shareholders support the NBU proposal to create the Settlement Center on the basis of VDPT.

• VDPT shareholders decide to change the type and name to public joint-stock company "Settlement Center for Servicing Financial Market Agreements".

• Settlement Center becomes a participant of the Deposit Guarantee Fund for Individuals (certificate No. 224).

• Settlement Center receives an indefinite licence from the National Commission on Securities and Stock Market for clearing activity.

• Supervisory Board approves the Development Strategy for 2020–2022, envisaging transformation of the Settlement Center.

• Shareholders decide to terminate banking activity without closing the legal entity.

• The bank completes the cessation of banking activity.

• Clearing activity is separated from banking activity under the Law "On Capital Markets and Organized Commodity Markets".

State-owned financial-market infrastructure institution providing clearing and settlement services in Ukraine.

• Clearing services

  Opening and maintaining clearing accounts for clearing participants and their clients; recording rights and obligations under securities transactions and derivatives contracts; clearing of rights and obligations; monetary settlement on a delivery-versus-payment basis.

• REPO clearing

  Clearing services for REPO transactions.

• SWAP clearing

  Clearing services for SWAP transactions.

• OTC with central counterparty

  Clearing of OTC transactions with a central counterparty.

• Electronic document flow

  Electronic document flow services.

• Banking services (until 2021)

  Opening current accounts, correspondent accounts, settlement accounts, internet banking connection and servicing, payment of income on securities. Discontinued on 30 June 2021.

1. 1Головна - Розрахунковий центрsettlement.com.ua
2. 2Клірингові послуги - Розрахунковий центрsettlement.com.ua
3. 3Settlement center - Wikidatawikidata.org
4. 4Розрахунковий центр - Wikipedia (Ukrainian)uk.wikipedia.org