THE PROBLEM OF LEGAL REGULATION OF THE OPERATION OF THE OVER-THE-COUNTER (OTC) CURRENCY MARKET (FOREX) IN UKRAINE AND THE EU

##plugins.themes.bootstrap3.article.main##

##plugins.themes.bootstrap3.article.sidebar##

PDF
Published: Dec 12, 2017
https://doi.org/10.30525/2256-0742/2017-3-5-367-375

  Eugene Podorozhnyi

  Dmytro Sirokha

  Pavlo Komirchyi

Abstract

The aim of the article is to evaluate the state of legal institutionalization of the OTC foreign exchange market in Ukraine, as well as its comparison with the foreign experience of legal regulation of OTC currency relations in Ukraine and EU countries. The subject of the study is the legal and administrative framework for the functioning of the OTC currency market (Forex) in Ukraine and in the EU countries. The methodology of the study consists of: historical and legal method, which allowed determining the preconditions for the emergence of OTC markets in Ukraine and the world and the principles of their functioning; system and structural method, which was used to analyse the world monetary system as an institutional and functional form of organization of international monetary and financial relations; a formal legal method that allowed us to comprehensively investigate a condition of regulation of the functioning of Forex in Ukraine, to identify its shortcomings, gaps, contradictions, and miscalculations, as well as to develop recommendations aimed at their elimination; a comparative and legal method that provided a deeper study of the specifics of the legal regulation of the functioning of Forex in the EU and to define ways of implementing a positive foreign experience in the national legal system. The results of the conducted legal study have shown that in Ukraine, the Forex market operates in legal vacuum conditions that negatively affect either the protection of the rights of forex clients or the amount of tax revenues to the state budget. The most acceptable way to eliminate this shortcoming is to implement the main principles and requirements of the MiFID in the national legislation. Practical impact. The research of experience of EU countries regarding the legal regulation of Forex companies activity and also regarding the creation of legal bases for implementation by the specified companies of self-regulation – it is a necessary condition of further improvement of the legal regulation of the OTC currency relations in Ukraine. Correlation/Authenticity. The mentioned directions of improvement of domestic legislation in the field of the functioning of the OTC currency market (Forex) are the most promising at the modern stage of development of the domestic economy. It is so because they are aimed at ensuring stability, reliability, and efficiency of the financial system, strengthening the guarantees of the rights of private investors, and increasing tax revenues from the activities of forex companies.

How to Cite

Podorozhnyi, E., Sirokha, D., & Komirchyi, P. (2017). THE PROBLEM OF LEGAL REGULATION OF THE OPERATION OF THE OVER-THE-COUNTER (OTC) CURRENCY MARKET (FOREX) IN UKRAINE AND THE EU. Baltic Journal of Economic Studies, 3(5), 367-375. https://doi.org/10.30525/2256-0742/2017-3-5-367-375
Article views: 508 | PDF Downloads: 298

##plugins.themes.bootstrap3.article.details##

Keywords

currency market, currency system, forex, forex trading company.

References

Seliuchenko, N. Ye., Shmihelska, Z. K. (2012). Upravlinnya finansovoyu systemoyu Ukrayiny [Management of the financial system of Ukraine]. Visn. Nats. un-tu "Lviv. politekhnika", № 725, p. 366-371.

Rol, V. F., Serhiienko, V. V., Popova, S. M. (2011). Finansove pravo. Navch. posib. [ Finance law. Teaching manual]. K.: Tsentr uchbovoyi literatury, p. 392. (in Ukrainian)

Kravchuk, P. (2013). Problemy ta perspektyvy rozvytku finansovoyi systemy Ukrayiny [Problems and prospects of development of the financial system of Ukraine]. Ekonomichni nauky. Cer. : Oblik i finansy, p. 129-133. Retrieved from: http://nbuv.gov.ua/UJRN/ecnof_2013_10%282%29__18. (in Ukrainian)

Chernenko, L. V. Problemy finansovoyi systemy Ukrayiny v suchasnykh umovakh [Problems of the financial system of Ukraine in the current Terms]. Retrieved from: http://www.khntusg.com.ua/files/sbornik/vestnik_105/51.pdf (in Ukrainian)

Korol, M. M. (2015). Valyutnyy rynok Ukrayiny: stan, problemy y perspektyvy [The foreign exchange market of Ukraine: state, problems and prospects]. Stalyy rozvytok ekonomiky, № 3, p. 65-70. Retrieved from: http://nbuv.gov.ua/UJRN/sre_2015_3_10 (in Ukrainian)

Bozhydarnik, N. V. (2013). Valyutni operatsiyi pidruchnyk [Foreign exchange operations. textbook]. K: "Tsentr uchbovoyi literatury", 698 p. (in Ukrainian)

Starynskyy, M. V. (2012). Valyutnyy rynok yak finansovo-pravova katehoriya [Foreign exchange market as a financial and legal category]. Pidpryyemnytstvo, hospodarstvo i pravo, № 8, p. 67-70. (In Ukrainian)

Rohach, O. I., Filipenko, A. S., Shemet, T. S. (2003). Mizhnarodni finansy: Pidruchnyk [International finance: A textbook]. K: Lybid, 784 p. Retrieved from: http://pidruchniki.com/finansi/etapi_rozvitku_svitovoyi_valyutnoyi_sistemi. (in Ukrainian)

Patyka, N. I. (2012). Mizhnarodni valyutno-kredytni vidnosyny : navch. posib. [ International Monetary and Credit Relations: Teach. manual]. K.: Znannya, 566 p. Retrieved from: http://pidruchniki.com/1214031047636/finansi/evolyutsiya_mizhnarodnoyi_valyutnoyi_sistemi. (in Ukrainian)

Hrontkovska, H. E., Riaba, O. I., Ventsuryk, A. M., Krasnovska, O. I. (2014). Mizhnarodna ekonomika [tekst] : navch. posib.[ International Economics [text]: teaching manual]. Kyiv: «Tsentr uchbovoyi literatury», 384 p. Retrieved from: http://pidruchniki.com/1124052562553/ekonomika/mizhnarodna_valyutna_sistema. (In Ukrainian)

Kozak, Yu. H., Rzhepishevskyi, K. I., Kovalevskyi, V. V. (2004). Mizhnarodna ekonomika: v pytannyakh ta vidpovidyakh: Navchalnyy posibnyk [International Economics: Questions and Answers: teaching manual]. Kyiv:«Tsentr uchbovoyi literatury», 676 p. Retrieved from: http://pidruchniki.com/1202022451152/ekonomika/v_chomu_polyagayut_sistema_zolotogo_standartu_bretton-vudska_valyutna_sistema. (In Ukrainian)

Chto takoe Foreks [What is Forex?]. Foreks Ukrayna –Forex Ukraine. Retrieved from: http://www.forexua.com/ru/study/aboutforex.

Paskalova A., Sibirianska Yu., Maliarchuk L., Pirnykoza P. (2017). Mizhnarodnyy dosvid rehulyuvannya rynku Foreks [International experience in regulating the Forex market]. Ofis z finansovoho ta ekonomichnoho analizu u Verkhovniy Radi Ukrayiny, p. 33. (In Ukrainian).

Otchet po Foreks za peryod 2013-2016 ot Banka mezhdunarodnykh raschetov [Report on Forex for the period 2013-2016 from the Bank for International Settlements]. Retrieved from: https://justforex.com/blog/ru/statistika-foreks/.

Holubchik, V. V. (2012). Problemni pytannya diyalnosti rynku foreks v Ukrayini [Problematic issues of Forex market activity in Ukraine]. Visnyk Natsionalnoho tekhnichnoho universytetu Ukrayiny "Kyyivskyy politekhnichnyy instytut". Politolohiya. Sotsiolohiya. Pravo, 3, p. 170-174. – Retrieved from: http://nbuv.gov.ua/UJRN/VKPI_soc_2012_3_33. (In Ukrainian)

Obsyahy rynku forex v Ukrayini syahayut 40 mln dolariv [The volumes of the forex market in Ukraine reach 40 million dollars]. Retrieved from: http://vkurse.ua/ua/business/obemy-rynka-forex-v-ukraine.html. (In Ukrainian)

Vyhody ta ryzyky instytualizatsiyi rynku Foreks v Ukrayini [Benefits and risks of institutionalization of the Forex market in Ukraine]. IA «Interfax-Ukrayina». Retrieved from: http://ua.interfax.com.ua/news/pressrelease/171723.html.

Pro vnesennya zmin do deyakykh normatyvno-pravovykh aktiv Natsionalnoho banku Ukrayiny : Postanova Pravlinnya NBU vid 3.08. 2012 r. # 327 [On amendments to certain legal acts of the National Bank of Ukraine: Resolution of the Board of the NBU dated 3.08. 2012 number 327]. Retrieved from: http://zakon0.rada.gov.ua/laws/show/z1434-12

Pro zatverdzhennya normatyvno-pravovykh aktiv Natsionalnoho banku Ukrayiny : Postanova Pravlinnya NBU vid 10.08.2005 # 281 [On approval of legal acts of the National Bank of Ukraine: Resolution of the Board of the NBU dated August 10, 2005 No. 281]. Retrieved from: http://zakon0.rada.gov.ua/laws/show/z0950-05.

Pro finansovi posluhy ta derzhavne rehulyuvannya rynkiv finansovykh posluh : Zakon Ukrayiny vid 12.07. 2001 r. # 2664-III [On Financial Services and State Regulation of Financial Services Markets: Law of Ukraine dated 12.07. 2001 No. 2664-III]. Vidomosti Verkhovnoyi Rady Ukrayiny (VVR), 2002, # 1, st. 1.

Commission Directive implementing Directive 2004/39/EC of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms, and defined terms for the purposes of that Directive. Retrieved from: http://ec.europa.eu/internal_market/securities/docs/isd/dir-2004-39-implement/dir-6-2-06 final_en.pdf

Directive 2006/49/Ec of the European Parliament and of the CounciL of 14 June 2006 on the capital adequacy of investment firms and credit institutions (recast). Retrieved from: http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32006L0049 (In Ukrainian)

Statut asotsiatsiyi «ukrayinskyy tsentr rozvytku pozabirzhovykh finansovykh instrumentiv i tekhnolohiy» vid 01.07.2014 r. [Statute of the Association "Ukrainian Center for the Development of OTC Financial Instruments and Technologies" dated 01.07.2014]. Retrieved from: http://ucrfin.com.ua/wp-content/uploads/2014/01/UCRFIN_New_Statute.pdf (In Ukrainian)

Issue
Vol. 3 No. 5 (2017): Baltic Journal of Economic Studies