The National Bank of Ukraine offers for discussion the Concept of factoring regulation reform (hereinafter – the concept).
The changes envisaged by the concept will have the following main directions:
- separation at the legislative level of trade factoring from the activity of assigning the right of claim for financial debt. At the same time, the activities of companies that will carry out operations on the assignment of the right of claim under consumer credit agreements will be carried out within the limits of the lending license and will be incompatible with the provision of trade factoring services;
- factoring licenses of non-banking financial institutions will be reissued into licenses for the activities of a financial company, within which they will authorize the provision of factoring financial services. Companies will be able to continue their usual activities in accordance with the requirements of the National Bank. If a non-banking financial institution plans to provide trade factoring services, it may retain its license, but will be required to bring its activities into line with the new requirements for factoring companies;
- factoring companies will be able to combine the provision of factoring services with the provision of a number of other services, both financial (financial leasing, provision of guarantees and funds on credit, in addition to the provision of relevant services to consumers), and non-financial (keeping records of receivables, supporting work with debtors, presenting to payment of monetary claims). This will enable companies to provide their customers with a wider list of services without losing their quality;
- factoring in Ukraine will be transparent and meet the best European standards. In particular, it is planned to introduce the registration of concessions of the right of claim under contracts in the public register. This, among other things, will make it possible to reduce the risk of fraud during factoring activities and bring Ukrainian factoring closer to the best international practices.
Financing of trade activities provides ample opportunities for the development of small and medium-sized businesses, which is very important during the war and during the post-war reconstruction of the country.
Thus, from 2024, the new Law of Ukraine “On Financial Services and Financial Companies” will come into effect. It will expand the opportunities of factoring companies to attract financing, as well as make it possible to improve the regulation of factoring, in particular, in the non-banking market.
The strategy for the development of the financial sector until 2025 also foresees the reform of the regulation of factoring itself. You can familiarize yourself with the Concept of reforming factoring regulation in detail here.
Comments and suggestions for the concept are accepted until March 7, 2023 to the email address: [email protected] or to the postal address of the National Bank: str. Instytutska, 9, Kyiv-8, 01601.
