Ukraine: Consolidation of Post-trade Infrastructure and Legal Framework Upgrade

Location:

Ukraine

Project number:

65213

Funding source:

EBRD Shareholder Special Fund

Contract type:

Consultancy Services

Notice type:

Invitation for expressions of interest (CSU)

Issue date:

08 Jun 2016

Closing date:

29 Jun 2016   at  23:59   London

Access eSelection

Project Description:

The National Securities and Stock Market Commission of Ukraine has requested the European Bank for Reconstruction and Development (the “EBRD” or the “Bank”) to provide technical assistance for the technical cooperation project “Ukraine: Consolidation of Post-trade Infrastructure and Legal Framework Upgrade” (the "Project").

Currently the integration of the Central Security Depositor (CSD) for Government Securities operated by the National Bank of Ukraine (NBU) into the National Depository of Ukraine (NDU) is planned and it has to be ensured that legal, institutional, operational and IT support is ready for such integration. Bringing Ukraine’s capital market infrastructure (CMI) closer to the best European standards in a phased approach is expected to assist Ukraine in developing its capital markets and attracting investment to the economy.

The introduction of new and the development of available financial sector instruments were amongst the measures identified by the EBRD in order to increase the investment attraction into reliable financial instruments, according to Strategy 2020 (The “Comprehensive Program of Ukraine Financial Sector Development until 2020” ) and in line with EU Action Plan on building a Capital Markets Union.

The market integration and efficiency enhancing objectives are also relevant for the covered bond markets which stand out prominently as a cornerstone of long term finance: they are instrumental for credit institutions to channel cheap finance to the real estate market (namely housing) and the public sector, and have also been used so far in Europe to raise funding on the back of other assets such as loans for the acquisition of aircraft or loans to SMEs.

Issuance volumes show that covered bonds remained throughout significant stressed conditions a more resilient and reliable source of funding for European credit institutions than unsecured debt and other forms of collateralised lending, key to such good performance being the perception that covered bonds are lower risk instruments.

EBRD intends to support the capital market development efforts of the National Security Commission (the “Client”), the NBU and the Government. It is expected that this assignment (the “Assignment”) will lead to a consolidation and upgrade of the post-trade environment in accordance with the reform agenda of the Ukrainian Government.

Assignment Description:

The Bank intends to engage a consulting company (the “Consultant”) for the Assignment to facilitate an improvement and consolidation of financial instruments in Ukraine, as well as improvement of the legislative basis for the post-trade environment infrastructure/services and development of new financial instruments in Ukraine.

The aim of the Assignment is to upgrade the legal and regulatory framework for post-trade infrastructure/services and for the development of new financial instruments (such as ABS/covered bonds).

The selected Consultant is expected to provide the following services:

1. For post-trade infrastructure and services:

(a) Review the existing Ukrainian laws and regulations covering post-trade infrastructure and services in order to identify any existing constraints/inconsistencies/drawbacks;

(b) Advise on the implementation of IOSCO standards and principles (including CPSS-IOSCO “Principles for financial market infrastructures”) in the local laws and regulations;

(c) Support NSSMC in updating and drafting legislation and regulations

(d) Assist NSSMC in drafting the post-trade related legal/regulatory framework.

2. For securitisation/covered bonds:

(a) Review the existing securitisation/covered bonds legal framework/legislation that impacts such instruments in order to identify the legal/regulatory constrains that are currently impeding the development or the market;

(b) Present legal and regulatory solutions (and reasons for adopting them) adopted by countries which have traditional influence on the Ukrainian financial sector and/or have a developed markets for securitisation/covered bonds but also related EU framework and proposed regulations as well as international best practices as identified during the project, including ECB’s initiatives, European Banking Authority advice to the Commission, European Commission’s initiative on high quality securitisation and the Action Plan for a Capital Markets Union;

(c) Advise on implementation of relevant EU legislation (such as relevant provisions that affect ABS/covered bonds from the UCITS Directive, the CRR, Solvency II Delegated Act, LCR Delegated Act, and the BRRD) and proposed initiatives in line with the EU Action Plan on building a Capital Markets Union.

(d) Support NSSMC in drafting legislation and regulations in conformity with European/Example Countries practices (as mentioned in Section 3 or according to potential instructions /suggestions identified and agreed during the project by the OL and the Client).

The Consultant would be expected to, inter alia, prepare the following:

1. Concept papers (the Concept Papers) analysing the legal framework (legislation and regulation) on post-trade infrastructure/services and financial instruments (ABS/covered bonds), advising on the approach to legal reform in Ukraine and providing proposed solutions, underlying reasons and examples from international practice that will serve as the basis for the development of the Ukrainian legal and regulatory framework;

2. A set of legal and regulatory provisions to update/ create the Ukrainian legal framework on post-trade infrastructure/services and financial instruments (ABS/covered bonds).

To ensure a high level of acceptance of the proposed solutions the Consultant should consult with NSSMC and the key stakeholders.

Status of Selection Process: Interested law firm or a law firm in consortium with firm(s) and/or individual expert(s) are hereby invited to submit expressions of interest.

Assignment Start Date and Duration: The Assignment is expected to start in July 2016 and has an estimated overall duration of maximum 28 months.

Cost Estimate for the Assignment: EUR 220,000.00 (exclusive of VAT).

The Consultant must determine whether any VAT would be chargeable on the services and the basis for that determination, without taking into consideration the special status of the Bank as an IFI and state this to the Bank in their response to the Invitation for Expressions of Interest. To the extent that a Consultant incurs input VAT on goods and services purchased in connection with the provision of services (e.g. VAT on airline ticket) which is not otherwise recoverable by the consultant from the local tax authority, the gross cost to the consultant of such expenses shall be treated as a reimbursable expense.

Funding Source: It is anticipated that the contract will be financed by EBRD Shareholder Special Fund. Selection and contracting are subject to the availability of funding.

Eligibility: There are no eligibility restrictions.

Consultant Profile:

The Consultant will be a law firm or a law firm in consortium with firm(s) and/or individual expert(s) with previous project experience in advising regulatory authorities, preferably in Ukraine, on capital market related reform projects; experience focusing particularly on CSD and post-trade development, as well as financial instruments (such as ABS and covered bonds).

The Consultant is expected to propose a team of highly specialised legal experts who will carry out the assignment. The provided expertise should cover all areas as defined in the scope of work.

It is expected that the Consultant’s team of key experts will consist of:

(a) Key Expert 1: Team Leader / Legal Expert

­ preferably 8 years’ of consultancy experience related to capital markets development covering trading, clearing and settlement/and financial instruments (such as ABS and covered bonds);

­ Preferably 5 years of project management experience including acting as Team Leader on similar assignments, including without limitation in minimum 2 similar assignments;

­ Excellent knowledge of international standards and r EU Directives & regulations relevant to the Assignment, as well as relevant latest legislative developments;

­ Previous experience on post-trade infrastructure/services and/or financial instruments (such as ABS and covered bonds) legislation and regulations is preferred;

­ Experience in supporting governments in legal and regulatory reform projects;

­ Excellent communication, analytical, report writing and presentation skills;

­ Assignment related experience including without limitation network with related stakeholders in Ukraine will be an advantage;

­ Proficiency in written and spoken English language.

­ Ability to speak and write in Ukrainian will be an advantage.

­ (b) Key experts 2: Pool of Legal, Regulatory and Subject Experts

­ Preferably 2 years of professional experience as a legal and regulatory expert with focus on capital markets legislation in the post-trade infrastructure and services and/or financial instruments (ABS and covered bonds);

­ As a minimum a Master degree or equivalent in legal studies;

­ Practical experience as legal/regulatory expert in at least one capital market development projects;

­ Extensive experience in drafting laws and regulations;

­ Excellent knowledge of international standards (i.e. PFMI) and EU Directives related to post-trade institutions and activities (i.e. CSDR, EMIR, Settlement Finality, Collateral Management, CRD IV/CRR, MiFID2/MiFIR);

­ Excellent knowledge of EU acquits and initiatives as well as other countries’ legislation (international best practices) on securitisation/covered bonds

­ Knowledge of the international and especially the Ukrainian legal and regulatory environment;

­ Proficiency in written and spoken English language.

It is important that at least one key expert has in-depth knowledge of the Ukrainian capital market/legislation and relevant network experience with local market players, especially institutional investors.

If one expert can cover various expert roles this has to be clearly stated in the Expression of Interest and reflected in the CV(s) and the proposed work plan accordingly.

Key Experts 2 Pool of Legal, Regulatory and Subject Experts should contain some experts fluent in Ukrainian.

Submission Requirements: In order to determine the capability and experience of consultants to be shortlisted, the information submitted should include the following:

1. Company/group of firms’ profile, organisation and staffing (max. 2-4 pages).

2. Details of previous project experience or similar assignments particularly undertaken in the previous five years, including information on contract value, contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided (if different from duration) , main activities, objectives.

3. CVs of key experts who could carry out the Assignment detailing qualifications, experience in similar assignments, particularly assignments undertaken in the previous five years, including information on contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided, assignment budget, main activities, objectives.

4. Completed Consultant Declaration Form and Contact Sheet, the template for which is available from the following web-link:

http://www.ebrd.com/pages/workingwithus/procurement/notices/csu/contact_sheet.doc.

The expression of interest shall not exceed 20 pages (excluding CVs and Consultant Declaration and Contact Sheet).

Failure to submit duly completed and signed Consultant Declaration may result in the applicant being disqualified from the selection process for this assignment.

The complete expression of interest (including CVs, Consultant Declaration and Contact Sheet) should be submitted, in English via eSelection to reach the Bank not later than the closing date. The expression of interest shall be one file (pdf). The Bank reserves the right to reject applications of firms submitting more than one file. Only if any limitation on the permissible file size is exceeded, the Consultant may split the expression of interest into further files.

The EBRD Contact Person:

Marina Matushina

Advisor, Technical Cooperation

European Bank for Reconstruction and Development

One Exchange Square

London EC2A 2JN

Tel: + 44 20 7338 6577

Fax: +44 20 7338 7451

E-mail:MATUSHIM@ebrd.com (DO NOT send the Expressions of Interest to this e-mail address)

Important Notes:

1. The selection will normally be made from responses to this notification only. Consultants will not be asked to submit a proposal. The highest-ranked Consultant will be selected from a shortlist and be invited to negotiate the contract, subject to availability of funding.

2. The shortlist criteria are as follows:

(a) Firm’s previous project experience in advising regulatory authorities, preferably in Ukraine, on capital market related reform projects (40%)

(b) Firm’s previous project experience focusing particularly on CSD and post-trade development, as well as financial instruments (such as ABS and covered bonds) (30%)

(c) CV of Key Experts proposed (30%) (thereof Team Leader (45%), pool of legal and regulatory experts (55%))