“The system is equally fair for both large enterprises and small businesses on the timber market” - Olena Velyka on the risk-based approach of the counterparty assessment system

On March 27, a joint expanded meeting of the Councils of the "Untreated timber and lumber" sections of the Ukrainian Energy Exchange and the Ukrainian Universal Exchange was held. The main topic of the meeting was the analysis of the results of the pilot project of Ukrainian Clearing House LLC on the implementation of a risk-based approach to the system of guaranteeing obligations on the exchange market. The meeting participants discussed the successful application of the counterparty risk assessment system in the Zhytomyr region and the possibility of scaling this experience across the country.

Olena Velyka, Director of Ukrainian Clearing House LLC, emphasized that all the tasks set before the start of the pilot have been fully achieved to date. The developed methodology has proven its effectiveness in practice, demonstrating a real streamlining effect. The introduction of new clearing instruments has already led to a noticeable stabilization in the timber market, ensuring transparency and predictability of trading processes for all participants.

- We see that our methodology really works, and most importantly - the scale of the business has no impact on the final result of the assessment. The system is equally fair for both large enterprises and small businesses. The main tasks that we set for ourselves at the start have been achieved, - noted Olena Velyka.

Yuriy Dyug also expressed his position:

The system is effective and fits organically into what we have been building for two years. It strengthens market discipline and makes the rules of the game clearer for all participants.

Following the meeting, the parties agreed to continue joint work and coordination of actions. In particular, it was decided to expand testing of the rating system - its testing will take place at quarterly auctions in all regions of Ukraine with the prospect of further full-scale implementation. The participants also supported the idea of testing the effectiveness of the system within the framework of concluding forward contracts.

In addition, they discussed the development of the "single account" mechanism and its integration with risk-based approaches during quarterly auctions. A special emphasis was placed on the market of wood for plywood production (alder, birch), where continuity of supply and predictability of financial settlements are of key importance.