Shareholders of Ukraine's PFTS exchange to discuss annulling licenses

MOSCOW. April 23 (Interfax) - The shareholders of the PFTS Stock Exchange, Ukraine's largest by trading volume, will make a second attempt at a meeting on April 29 to approve almost doubling its charter capital from UAH32.01 million to UAH62.01 million, but as an alternative minority shareholders have raised for consideration the issue of annulling the exchange's licenses.

Holders of more than 5% of shares say the reason for the possible cancellation of the PFTS's exchange and other licenses is the inability to fulfill the prudential standards of Ukraine's National Securities and Stock Market Commission (NSSMC), Ukrainian media reported citing the exchange's website.

However, another alternative proposal from the minority shareholders is to require the exchange's largest shareholder, China's Bohai Commodity Exchange (BOCE Co. Limited, Hong Kong), which holds 49.90003% of shares, to provide non-repayable financial assistance in the amount needed for the PFTS to comply with these prudential standards.

The issue of raising PFTS's charter capital to UAH62.01 million was scheduled for a vote at a shareholder meeting on February 6, but it was not held.

In March, the NSSMC warned market participants, representatives of relevant associations and the management of exchanges that there was a high risk of two of Ukraine's three operating exchanges, PFTS and the Ukrainian Exchange losing their licenses. Possible reasons for this included failure to meet prudential standards for liquidity and shareholder capital structure.

PFTS's largest shareholder since the beginning of 2022 has been BOCE Co. Limited, and as of the end of 2023 there were no other shareholders with a stake of more than 5%, but on April 2 the exchange reported that Emporium LLC, a division of Rinat Akhmetov's SCM, had acquired 8.856607% of shares in PFTS.

PFTS last published financial statements for the first nine months of 2021. The exchange has only said that in 2023 its net loss grew to UAH4.303 million after falling by 8.6% to UAH3.641 million in 2022.

Trading volume on the PFTS surged 260% to UAH320.8 billion in 2023 and amounted to 63% of the total trading volume of securities trading organizers in Ukraine. Trading in government bonds on the PFTS tripled to UAH308.6 billion, trading in corporate bonds surged 20-fold to UAH1 billion thanks to the recovery of primary placements and trading in foreign government bonds quintupled to UAH0.7 billion, while trading in equities totaled just UAH19.4 million.

Exchange licenses in Ukraine are held by the Ukrainian Exchange, PFTS and Perspektyva Stock Exchange.

The official exchange rate was UAH39.79/$1 on April 22.