International law firm CMS Cameron McKenna Nabarro Olswang has acted as the legal partner to NEXT-UA, a joint project launched by the Ukrainian government, USAID, EBRD and the American Chamber of Commerce in Ukraine. CMS worked with a consortium of high-profile technical and financial advisors, including Cirway Consulting, Afi, Araliya, Barva Invest and D3 Consulting.

Together with the consortium, CMS worked on a feasibility study aimed at proposing a working and commercially viable structure for the Ukrainian capital markets. The study covers both trade and post-trade pillars and takes into account the market’s perspective on the current state of play based on a series of interviews with various stakeholders and key market participants. The study recommends a product and market structure that builds upon existing players and elements, and it also recommends best practice and innovations on which Ukraine could take a lead.

NEXT-UA’s report highlights the legal deficiencies that need to be addressed to reach the target model recommended by the consortium, including the terms of ownership structures for various post-trade entities. While the results of the study raised an exciting discussion wave among various stakeholders and the political decisions are yet to be made, the findings of the experts will help to focus the overhaul of the capital markets around key “deal-breakers”. The financial models produced as part of the study can be used as a basis for financial projections and through changing various assumptions initially used in the models will provide guidance as to what different financial outcomes may be reached.

The final deliverable of the project – the study results and recommendations report – was shared with the working group created by the Cabinet of Ministers. The working group began working with the results of the feasibility study on 28 October 2021, but the implementation of the recommendations still lies ahead.

Ihor Olekhov, CMS partner and Head of the Banking & Finance Practice at CMS Cameron McKenna Nabarro Olswang in Kyiv, comments: “We are delighted to be part of such a high calibre expert group and contribute to creating sustainable, functional and viable capital markets infrastructure in Ukraine. While it has always been a “chicken and egg” question as to what comes first – volumes or infrastructure – Ukraine should now work on all fronts to maintain momentum and foreign investor interest, especially following the implementation of Ukraine’s New Capital Markets Law. We believe the NEXT-UA study will breathe new life into Ukrainian capital markets strategy and help to enable difficult but important decisions. As a top-ranked firm in Ukraine for its Banking, Finance and Capital Markets advice, and with experience in advising international clients as well as the national regulator on Ukrainian capital markets matters, CMS is happy to continue contributing to important initiatives like this one.”

The CMS team was led by Ihor Olekhov, partner and Head of Banking & Finance, supported by counsel Kateryna Chechulina and associates Khrystyna Korpan and Iryna Kravchenko. The team also included senior associate Mariana Saienko and associate Ihor Pavliukov advising on corporate matters; senior associates Mykola Heletiy, Nataliya Nakonechna and Viktoriia Stavchuk-Mulundkar dealing with IT, tax and other commercial issues; as well as senior associate Volodymyr Kolvakh and associate Anatolii Doludenko dealing with energy market regulatory aspects and assisting on state aid matters.