Legal support for the purchase/sale of financial institutions in Ukraine

The process of buying or selling financial institutions in Ukraine is complex and regulated by a number of legislative norms.

Especially during the war, these processes became more difficult due to the interaction with the regulatory authorities, which are very attentive to any changes in the field of financial service providers.

At the same time, we, as the Law Company “Prikhodko and Partners”, have considerable experience in accompanying such agreements and are ready to reveal the main stages, nuances and requirements of this process.

The preparatory component of the process of buying/selling a financial institution

Before starting the transaction of buying/selling a financial institution, it is necessary to assess the legal and financial situation of the enterprise, as well as to understand what regulatory requirements need to be met.

The procedure includes the following key stages:

1. Legal audit (Due Diligence):

• This can be attributed to the first and most important step. Our team at the Prikhodko and Partners Law Firm conducts a full legal audit of the company to identify risks, including checking licenses, compliance with legal requirements, debt obligations and other possible issues.
• It is especially important to conduct a financial audit to assess the assets, liabilities and financial stability of the institution.

2. Verification of legal requirements:

• Buying or selling a financial institution in Ukraine is regulated by laws that establish rules for financial services, including the Law of Ukraine “On Financial Services and State Regulation of Financial Services Markets”.
• In order to carry out the transaction, the approval of the National Bank of Ukraine (NBU) or another regulator, depending on the type of institution, is required. We, as JK “Prikhodko and partners”, accompany clients at all stages, including obtaining the necessary permits.

The main stages of the procedure

1. Preparation of the purchase/sale contract:

• Legal support for contract preparation is a critical stage for minimizing the risks of both parties. Our lawyers work out in detail the conditions related to the distribution of assets, liabilities and responsibilities of the parties.

2. Execution of the agreement:

• After all terms have been agreed upon, the agreement must be notarized. In case of purchase of a significant participation, it is necessary to follow the corporate procedures provided for by the company’s charter.

3. Obtaining regulatory approval:

• An important part is obtaining the consent of the NBU or another state regulator for the purchase and sale of a financial institution. The National Bank checks the buyer’s compliance with the requirements for owners of significant participation in financial institutions.
• Our team provides full support in the process of communication with the NBU, prepares all the necessary documentation and accompanies at all stages of the process.

Requirements for subjects of purchase/sale of a financial institution

It is important to understand that the buyer of a financial institution must meet a number of requirements:

• Financial stability: The buyer must be financially capable and confirm the availability of the necessary capital. Moreover, such capital must be official, that is, with the ability to confirm the source of the funds.
• Compliance with legislation: The buyer must have an impeccable reputation and not be involved in violations of financial or tax laws.

In addition, please note that the seller, in turn, must fulfill all obligations to customers and counterparties stipulated at the time of sale.

Buying or selling financial institutions requires careful compliance with all legal regulations. In particular, deals may be suspended or canceled if the requirements for public tenders are not met, especially in cases with state-owned banks or institutions of strategic importance.

Conclusion

Buying or selling a financial institution in Ukraine is a complex process that requires a high level of legal expertise.

Specialists of the legal company “Prikhodko and Partners” have extensive experience in conducting transactions of various levels of complexity, which is why we can provide a full range of services to support such transactions, starting from conducting a legal audit to drawing up all documents and obtaining permits.

Contact the Legal Company “Prikhodko and Partners” for reliable and professional support of transactions in the field of financial institutions.