FAQ

Clearing is an integral part of exchange trading on commodity markets. A participant in exchange trading must have the status of a clearing member. The Law of Ukraine On Commodity Exchanges provides that licensed commodity exchanges independently determine the model of clearing organization - to obtain a license from the regulator or to enter into a clearing agreement with a licensed clearing institution.

UCH LLC is the first clearing institution on the commodity markets in Ukraine.

UCH LLC opens and maintains clearing accounts, handles collateral, and keeps records of rights and obligations under exchange transactions and exchange contracts concluded on the exchange.

UCH LLC ensures the reliability and security of clearing operations, full transparency and manages the risks of fulfilling financial obligations between clearing members, provides services to speed up and optimize settlements.

The commodity exchanges that entered into a clearing agreement with UCH LLC aimed not only to comply with legal requirements but also to improve the efficiency of exchange trading. Thanks to this cooperation, exchanges are able to optimize their business processes, increase the confidence of market participants and provide a higher level of service.

The conclusion of a clearing agreement is a prerequisite for participation in exchange trading on commodity exchanges with which the UCH has concluded a clearing agreement. The absence of such an agreement makes it impossible to perform the clearing function, and therefore the very participation of such a person in trading on a commodity exchange.

Legislation provides for the protection of funds belonging to clearing members and transferred by them to the clearing institution to ensure settlement. Such funds are not subject to seizure or recovery, even in the event of criminal or enforcement proceedings.

In particular, the Law of Ukraine “On Capital Markets and Organized Commodity Markets” (paragraph 3 of part 5 of Article 59 and paragraph 2 of part 4 of Article 63) and the Law of Ukraine “On Enforcement Proceedings” (paragraph 4 of part 2 of Article 48) contain direct provisions on the prohibition of seizure and/or seizure of funds and/or other assets in the relevant accounts of a person conducting clearing activities, credited to make/ensure settlements under derivative contracts and commodity transactions concluded on and outside the organized market.

If the clearing participants transfer funds to the current account of the UCH as a margin, regardless of the direction and market, such payment is always made excluding VAT, which must be indicated in the purpose of payment. Payment of guarantee fees in accordance with subpara. 14.1.185 and subpara. 14.1.191 of para. 14.1 of Article 14 of the Tax Code of Ukraine is not a supply of goods or services and therefore is not subject to VAT in accordance with subpara. 185.1 of Article 185 of the Code.

However, on some markets, for example, in the Short-Term Natural Gas Market, a preliminary deposit of funds is used as a guarantee for settlements, which is intended for full payment under the purchase and sale agreement in the event of its conclusion. Such collateral is transferred by the clearing participant to its escrow account, and its amount must be such that it covers 100% of the cost of natural gas, including VAT.

UCH, as a professional participant on the capital markets, conducting clearing activities to determine obligations in accordance with the legislation of Ukraine, complies with the established regulatory requirements regarding the openness and transparency of clearing activities.

In order to properly inform clearing participants, as well as other interested parties, UCH provides constant free and unhindered access to the current version of UCH's internal documents by posting them on its own website on the Internet at: uaclearing.com.ua.

Internal documents of the UCH include - acts of internal regulation of the UCH, which are official documents of the UCH, which, in accordance with the Rules, legislation on capital markets and organized commodity markets, regulate the organization and implementation of clearing activities in the UCH, and also regulate relations within the structure of the UCH and between the UCH and registered persons, settlement banks authorized by the UCH, delivery operators and other persons specified by the internal documents of the UCH; internal documents of the UCH may consist of one or more documents (rules, regulations, procedures, provisions, etc.).

You can find the internal documents of the UCH at the link.

Thus, any clearing participant and other interested parties have the opportunity to promptly familiarize themselves with the current internal documents of the UCH relating to the conduct of clearing activities, as well as to obtain other relevant and useful information posted on the official website of the UCH.

Any person has the right to file a complaint with the UCH regarding the UCH's actions or inaction, including regarding the UCH's decisions.

A complaint submitted to the UCH must necessarily contain:

• document name "Complaint";
• complaint number and date;
• the full name of the person filing the complaint, their location, mailing address for correspondence, and indication of means of communication;
• content and grounds for filing the complaint;
• the complainant's claims;
• list of attachments to the complaint;
• signature of the head of the legal entity / individual entrepreneur and seal (if available) or an authorized person with the attachment of documents confirming his/her authority.

The complaint is sent to the postal address specified on the UCH website in the "Contacts" section or using the Internet to the UCH email address: info@uaclearing.com.ua in compliance with the requirements of the Law of Ukraine "On Electronic Documents and Electronic Document Management" and the Law of Ukraine "On Electronic Identification and Electronic Trust Services".

The review of a complaint may not exceed 30 (thirty) calendar days starting from the next business day after its receipt. In exceptional cases, the period for reviewing a complaint may be extended by decision of the Supervisory Board or the Responsible Person of the UCH. In this case, the Responsible Person of the UCH informs the complainant about this no later than the next working day from the date of the decision to extend the deadline for considering the complaint via the UCH email.

The complainant is informed about the results of the complaint review by the Responsible Person in writing or electronically via the UCH email.

The decision of the UCH made based on the results of the complaint review may be appealed in court.

More details in the Regulation on the procedure for considering complaints in the Ukrainian Clearing House Limited Liability Company.

The clearing participant does not need to separately notify the UCH about the transfer of the guarantee fee funds to the UCH's bank account.

The UCH receives information on the receipt of guarantee fees from the clearing participant from the settlement bank as they are credited to the UCH current account during the bank's operating hours and updates information on clearing accounts in the UCH clearing accounting system to account for guarantee fees in accordance with the schedule specified by the UCH.

The status of the section of the clearing account intended for accounting for guarantee contributions changes based on the analytical accounting data of funds credited to the current account of the UCH as a guarantee fee.

At the same time, before transferring the guarantee fee funds to the bank account of the UCH, the clearing participant must check the correctness of the details and the purpose of the payment in the account.

The Ukrainian Clearing House provides clearing in the raw wood market. The key task of the clearing house is to build a risk management system for market participants participating in exchange trading. To this end, the UCH manages the guarantee collateral, records it on clearing accounts, and applies risk management measures in the form of withholding the guarantee fee if there are grounds for doing so. In cooperation with the commodity exchanges, the UCH monitors the execution of exchange transactions and contracts, which may result in the application of risk management measures.

The Ukrainian Clearing House, in cooperation with the commodity exchanges, monitors the execution of exchange agreement and contracts. If a participant in exchange trading fails to fulfill an exchange agreement in terms of failure to conclude a purchase and sale agreement, since the agreements are signed in the ETS of the commodity exchange, the fact of failure to sign the agreement is recorded by the exchange. Information about this, together with the conclusions based on the results of the survey of the parties to the agreement on the actual circumstances of the violation of the terms of the exchange agreement, shall be transmitted to the clearing institution. Based on such conclusions, the Ukrainian clearing house shall apply risk management measures in the form of withholding the guarantee fee.

In addition, based on the results of monitoring the execution of forwards, the UCH also decides on the application of risk management measures and allocates the guarantee fee for execution based on the results of a comprehensive study of the situation that led to the failure to execute the forward (failure to reach the tolerance level of 97% of the contracted volume).

UCH shall return the guarantee fee to the unsuccessful bidder within 3 (three) business days from the day following the day of completion of the relevant bidding. Transfer of funds to the account of third parties is not permitted.

All risks associated with untimely notification to the Clearing House of information about a change in the bank account and new payment details, for which the guarantee fee is returned to the Clearing House, are borne by the clearing member himself.

The clearing participant is obliged to notify the UCH in writing about any change in bank account and payment details immediately, but no later than the end of the business day on which the auction on the commodity exchange in which the clearing participant participated took place.

The letter – notification of account change must contain the following mandatory information:

Account change letter

Full name of the enterprise or individual entrepreneur (EDRPOU CODE), please change the bank details in your personal account from _______ to _____ in __________(bank name) MFI_________________.

UCH introduced the “Single Account” system as a modern tool for guaranteeing the fulfillment of obligations under an exchange agreement (conclusion of an exchange agreement) and ensuring payment of the exchange/commission fee.

“Single Account” is a clearing account to which guarantee fees can be transferred by a clearing participant without being tied to specific exchange trades.

The Single Account system allows clearing participants to:

• avoid complications associated with the transfer of guarantee fees;
• ensure timely confirmation of available guarantee funds for admission to bidding;
• eliminate restrictions on participation in bidding for other lots due to the deadlines established for payment of guarantee fees;
• manage your liquidity more effectively and flexibly.

Thanks to the Single Account, clearing participants (buyers) can join the timber auction even after it has started, provided there is a sufficient balance of funds in the Single Account. This significantly increases the efficiency of responding to the opportunity to purchase attractive lots.

With the Single Account system, submitting a separate application is not a mandatory condition for admission to trading. The key condition is timely replenishment of the “Single Account” (transfer of the required amount of the guarantee fee to the clearing account of the clearing participant with the appropriate payment purpose).

To ensure unhindered participation in the auctions, the UCH recommends replenishing the Single Account in a timely manner, taking into account possible banking delays.

The funds of the guarantee fee of a clearing participant (bidder) who was not determined as the winner of the exchange trades, blocked at price offers (rates) in accordance with clause 6.5.1 of clause 6.5 of the Regulations, are unblocked at the stage of completion of all trades held on the relevant commodity exchange in the direction of "Untreated timber and lumber" during the relevant trading day, on which exchange trades were held with the participation of such a participant, which leads to an increase in the available balance of the guarantee fee of the clearing participant (bidder) for use within the framework of the Pilot Project on such a commodity exchange.

As a clearing institution, the UCH performs the function of ensuring the execution of agreements on the short-term natural gas market from the moment before the start of trading to the final settlement. First, prior to the start of trading, the DCC receives a 3% guarantee fee for the execution of the trade from the selling and buying participants in the exchange trades. Additionally, on the clearing accounts of the participants, the UCH keeps records of information on the collateral for settlement, which the clearing participants transfer to their escrow accounts with JSC Oschadbank, to. The UCH transmits this information to the Exchange and, within these limits, the participants may enter into agreements. After matching orders and concluding exchange trades, the Exchange creates a register of exchange trades and transmits it to the UCH for further processing. After the parties sign the sale and purchase agreement, the UCH unblocks the amount of the guarantee fee for the exchange agreement.

The UCH also organizes settlements under the exchange contract, both in terms of payment for purchased natural gas and in terms of organizing natural gas supply. Based on the results of determining the scope of rights and obligations of the parties to exchange agreements, the UCH generates a statement for transmitting trade notifications to the UGS/GTS Operator. If the re-registration of the contracted volume of natural gas is successful, the UCH sends a register of orders to the settlement bank to transfer funds from the buyer's escrow account to the seller's current account. In this way, the UCH ensures the conclusion and execution of contracts, accounts for positions, and reduces the risk for participants.