Financial Sector Transformation Project Quarterly Progress Performance Report Financial Sector Transformation (FST) Activity in Ukraine FY 2021 Q1 PROGRESS REPORT

(01 October 2020 – 31 December 2020) Award No: EEM-E-00-00002-00/AID-121-BC-17-00001 Prepared for USAID/Ukraine COR: Natalia Petrova C/O American Embassy 4 Igor Sikorsky St, Kyiv, Ukraine 04112 Prepared by DAI Global LLC COP Robert Bond 7600 Wisconsin Avenue, Suite 200 Bethesda, MD 20814 United States

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Table of Contents I. ACRONYMS AND ABBREVIATIONS 3

II. CONTEXT UPDATE 4

III. EXECUTIVE SUMMARY 5

IV. KEY NARRATIVE ACHIEVEMENT 7

V. PROGRESS AGAINST TARGETS 17

VI. PERFORMANCE MONITORING, EVALUATION AND LEARNING 19

VII. LESSONS LEARNED 20

VIII. ENVIRONMENTAL MONITORING 20

IX. PROGRESS ON LINKS TO OTHER ACTIVITIES 20

X. PROGRESS ON LINKS TO HOST GOVERNMENT 21

XI. PROGRESS ON INCLUSIVE DEVELOPMENT 21

XII. FINANCIAL INFORMATION 21

XIII. SUB-AWARD DETAILS 21

XIV. ACTIVITY ADMINISTRATION 22

XV. ATTACHMENTS 23

ATTACHMENT A: STATUS OF DELIVERABLES 24

ATTACHMENT B: FUTURE EVENTS AND GEOGRAPHIC DETAILS 28

ATTACHMENT C. PROJECT DOCUMENTS AND PUBLICATIONS 31

ATTACHMENT D. PERFORMANCE DATA TABLE 32

ATTACHMENT E. SUB-AWARDS TABLE 40

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I. ACRONYMS AND ABBREVIATIONS

AML Anti-Money Laundering

BEPS Base Erosion and Profit Shifting

CDCS Country Development Cooperation Strategy

CFA Chartered Financial Analyst

DCT Digital Comparison Tool

DGF Deposit Guarantee Fund

EBA European Business Association

EBRD European Bank for Reconstruction and Development EU European Union

FATF Financial Action Task Force

FRS Financial Reporting System

FSR National Commission for Regulation of Financial Services Markets

GDIP General Directorate for Servicing Foreign Representative Offices GOU Government of Ukraine

GUC Grants under contract

ICT Information and Communication Technologies

IFI International Financial Institutions IFRS International Financial Reporting Standards

IMF International Monetary Fund

IOSCO International Organization of Securities Commissions

ISDA International Swaps and Derivatives Association

iXBRL Inline eXtensible Business Reporting Language

KPI Key Performance Indicator

MOU Memorandum of Understanding

MP Member of Parliament

NBFI Non-bank Financial Institution NBU National Bank of Ukraine

NGO Non-governmental Organization

NPF Non-state Pension Fund

NSSMC National Securities and Stock Market Commission of Ukraine OECD Organization for Economic Co-operation and Development

OECD/INFE Organization for Economic Co-operation and Development/International Network on Financial Education

P2P Lending Peer-to-Peer Lending

PFU Pension Fund of Ukraine

PSA Public Service Announcement

RFA Request for Application

RFP Request for Proposal

SEP System of Electronic Payments

SME Small and medium enterprise

SOE State-owned enterprise

US CFTC U.S. Commodity Futures Trading Commission

US SEC U.S. Securities and Exchange Commission

UUL Ukrainian Union of Lessors

XBRL eXtensible Business Reporting Language

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II. CONTEXT UPDATE The environment for achieving economic growth and reducing corruption worsened in 2020. The economy dropped by about 4.5% due to COVID-19 restrictions on business activity, direct foreign investment was a net zero, unemployment exceeded 10%, inflation was at 4-5%, and the UAH:$ exchange rate ended the year in the range of 27.5 to 28.5. For 2021, the economy is projected to grow by 4% but this will depend importantly on whether measures to control the COVID-19 pandemic succeed. During this quarter, the number of infectious cases increased from 213,028 to 1,064,500, and deaths from 4,193 to 18,680. A vaccination program is not expected to begin until the spring, and opinion polls indicate that only 40% of the Ukrainian population is willing to participate. Economic growth will also depend on attracting direct foreign investment. This, in turn, will depend on the success of the Zelensky administration in combatting corruption, reforming the court system, and respecting property rights. In the period October to December 2020, there was a sustained and successful campaign directed against Ukraine’s post-Maidan anti-corruption institutions, carried out by oligarchs and Russian-aligned interests and led ironically by the High Constitutional Court of Justice. The country also faces large foreign debt service payments the next two years and needs the continued support of the IMF and other international financial institutions. Despite almost weekly pronouncements by Ukrainian officials of progress in its discussions with the IMF on the Stand-by facility signed in June 2020, the program remains in limbo. It is doubtful that a second loan disbursement will be made until real progress is made on corruption, reducing the fiscal deficit, and gas price subsidies. One bright spot during the quarter was the stability of the banking system. Regulatory reforms introduced in 2015 (capital requirements, enhanced supervision, etc.) prevented a run on the banks. Indeed, National Bank of Ukraine (NBU) reserves ended the quarter at about $30 billion, equal to 4.5 months of imports. The discount rate remained at 6%, and borrowing costs decreased accordingly (e.g., the average cost of business borrowing was 8.2%; mortgages were at 12%). Most banks reported a small profit for the year. Nevertheless, many businesses closed, others sought refinancing, and access to credit by small and medium size businesses (SMEs) remained limited. During this quarter, there was no significant change in the conflict with Russia over the Donbas. Several international meetings and negotiations were held, and the current “truce” on hostilities resulted in fewer military incidents and casualties, but progress toward a political solution of the Donbas breakaway “republics” remains elusive. Likewise, Crimea, and by extension the Black Sea and the Sea of Azov, remain under Russian control and/or influence.

NBU Governor Kyrylo Shevchenko met with Ivanna Vladkova Hollar, Head of the IMF mission in Ukraine; November 9, 2020, Washington

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III. EXECUTIVE SUMMARY

A. Narrative Highlights

Consumer Protection – On October 1, FST launched Liga.Money, a comparison shopping site for consumer loans and personal financial advice, in partnership with nine major banks. Liga.Money is the first ever platform in Ukraine where consumers can obtain offers for loans (personal, car, credit cards, mortgages) based on the real cost of credit. In December, after just three months of operation, the website had almost 800,000 page views, and 1,800 applications for consumer loans.

Liga.Money Comparison Platform for consumer loans (www.money.liga.net)

Legal and Regulatory Reform - FST subcontracted three Ukrainian law firms to assist the Project in drafting regulations by the Securities Commission for the new Regulated Markets and Derivatives Law. This Law, adopted in June 2020 with the support of FST, establishes the basis for the development of regulated capital and commodity markets in Ukraine. In particular, FST is working on three sets of regulations, which must be completed by July 1, 2021: (1) commodity exchange licensing regulations for market operators; (2) clearing and settlement regulations for trade transactions; and (3) regulations on trade repository authorization and operations. FST is also supporting the development of an ISDA Master Agreement to facilitate the trading of derivatives contracts.

Leasing – The leasing industry performed better than any other non-bank financial institution sector in 2020. FST is assisting the Ukrainian Union of Lessors to gain access to finance for on-lending by leasing companies to its SME clients. The Project is currently negotiating with the National bank and the Ministry of Finance to gain eligibility for leasing companies to serve as intermediaries on two European Investment Bank lines of credit, worth a combined 800 million Euros. In addition, FST is negotiating for the leasing companies to gain eligibility to participate in the GOU’s 5-7-9 program for loans to SMEs.

Capital and Commodity Markets – FST continued its active support for NEXT Ukraine, a vision of an integrated multi-asset commodity and capital markets exchange. This included presentations, implementation plans and timelines, draft multiple versions of Memorandum of Understanding, and technical feasibility support. In addition, FST completed three major studies of needed reforms to the financial infrastructure (and held expert on-line discussions of them): DvP models for securities and derivatives transactions; creation of a trade repository; and an assessment of current market trading practices.

Financial Disclosure – FST organized and conducted six trainings on the Financial Reporting System in iXBRL (standardized international business language), developed by FST in 2019-20 for the NSSMC and the NBU. The system increases financial statement transparency; reporting becomes mandatory for financial entities January 1, 2021.

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NBU and Payments – FST supported the migration of Ukraine’s payments system to international standards (ISO 20022 messaging platform). In the last quarter, the NBU and FST’s subcontractor, SWIFT, jointly completed the process of creating the messages (19) required to migrate Ukraine’s SEP (System of Electronic Payments) to the ISO 20022 messaging standard. The modernized SEP will ensure the execution of settlements in hryvnia between banks within Ukraine and internationally. The NBU plans to develop the necessary software and then transition to the new system in 2022.

National Bank of Ukraine Payments and Settlements Project ISO20022 www.bank.gov.ua (https://bank.gov.ua/ua/payments/project-iso20022)

B. Quantitative Highlights

FST monitors over 30 indicators to measure the achievement of Project objectives. The performance measures are organized and presented in three categories: standard performance plan indicators, context indicators, and Project performance indicators (See Annex D). The quantitative highlights during this quarter were:

• Leasing. The number of leasing contracts concluded is 14,984 as of 09.30.2020. This exceeds FST’s end of FY20 target for leasing contracts of 11,000. The value of leasing contracts concluded was US$935.7 million as of 09.30.2020, compared to FST’s end of FY20 target of US$900 million. The leasing industry was the only non-bank sector to report growth in FY 2020 in Ukraine.

• Financial Reporting System. FST conducted 7 training seminars with 1,378 participants on the financial statements software for banks, insurance companies, capital markets entities, NBFIs, audit companies, and large enterprises. The new reporting law came into force on 1/1/2021, and FST expects that there will be over 4,000 entities reporting financial results in iXBRL standard business language.

C. Activity Administration

FST staff members continue to work remotely. The FST COP works from the Project office, and occasionally an administrative/finance or technical staff member will be present for a specific task. All technical and support staff have assignments, their performance is monitored by Team Leads and/or direct supervisors. The COP conducts teleconferences with all team leads twice per week and with individuals on an as needed basis. FST holds a weekly conference with the USAID/COR. Project staff are in regular contact with key counterparts and partners.

FST reduced its leased office space by almost half as of January 1, 2021. In late December, FST disposed of some of its office furniture and equipment to one Project recipient - the National Securities and Stock Markets Commission.

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FST signed a new Protocol of Cooperation with the National Securities and Stock Markets Commission and received a new Project registration card in December 2020.

FST extended long-term employee contracts as needed through the end date of the contract extension (August 27, 2021). FST continues to recruit local and international short-term consultants in the area of NBFI, legal, capital and commodities markets, etc. Otherwise, the Project is fully staffed.

There were no new modifications or amendments signed during the reporting period. D. Subsequent Reporting Period

FST will agree new protocols of cooperation to cover the period of its Project extension with three of its current beneficiaries, the NBU, the DGF, and the PFU. FST also expects to finalize its proposed new indicators for new Project activities in increased access to finance.

IV. KEY NARRATIVE ACHIEVEMENT

1. LEGAL AND REGULATORY REFORM

The main focus of this activity during this quarter was implementation of several priority laws to reform the financial sector that were enacted in the past two years. It is essential to give substance to the laws by drafting and approving regulations, provisions, and procedures. In particular, it is important to establish risk parameters for safeness and soundness (licensing, capital requirements, ownership, inspections, reporting, etc.) of the financial system, protect consumers, and attract investment. FST’s partners in this effort to draft implementing regulations were the NBU, the NSSMC, the Verkhovna Rada, and working groups formed from private sector financial entities and associations.

On the Split Law, FST proposed and drafted amendments to the Tax Code of Ukraine to define and reflect in law the redistribution of powers between the financial sector regulators. The NSSMC is now finalizing the draft before its submission to the Parliament.

FST also provided extensive comments to the NBU on its draft Law on Financial Services, which is the framework law to codify the NBFI regulatory reform provisions suggested in the Split Law. FST also regularly provided comments to the NBU on draft regulations it proposed to adopt in furtherance of the Split Law, including regulations on inspections, off-site supervision, sanctions, ownership structure requirements, and risk criteria.

FST was requested by the NBU to help develop the Market Conduct Regulation and Supervision Concept approved by the NBU Board in October 2020. As part of this work, FST provided comments on the implementation roadmap and prepared an overview of international practices on market integrity issues. The memorandum is now being reviewed

On the Regulated Markets and Derivatives Law (#738-IX, adopted in June 2020), FST provided intensive support to the Securities Commission. FST provided input to the drafting of legal provisions for the taxation of new financial instruments (e.g., derivatives) and of services of new market entities. The draft law proposes to introduce a special rule for VAT treatment of transactions with derivatives and special rules for VAT treatment of transactions on capital and commodity markets, to be performed by the central counterparty.

FST selected (and subcontracted) three law firms on a competitive basis to assist the NSSMC with drafting differing sets of regulations required for Law #738. Specifically, one law firm is drafting commodity exchange regulations (licensing, market operations, trading in financial instruments, etc.). The second law firm is drafting clearing regulations, and the third one is responsible for drafting regulations on the authorization and operations of a trade repository.

FST engaged with private financial market entities and business associations to develop standardized documentation for entering into over-the-counter derivative contracts. The purpose of this activity is to develop a Ukrainian version of the ISDA Master Agreement to increase derivatives trading. The

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International Swaps and Derivatives Association (ISDA) is an association that has developed the ISDA Master Agreement to reduce risks associated with derivatives. Market participants around the world use the ISDA Master Agreement because it provides certainty and consistency to contractual relationships, thereby lowering risk and facilitating trading. In October, FST created an ISDA Agreement working group with participation of the Independent Association of Banks of Ukraine (NABU), the European Business Association (EBA), the American Chamber of Commerce (ACC), and private financial entities. The associations conducted a survey of their members on interest in derivatives transactions and the use of standardized documentation.

Based on the results of the survey, and the contributions of the Working Group members, FST announced a tender for legal services to prepare the so-called “local version of the ISDA Master Agreement.” The Ukrainian ISDA Agreement will be used to standardize and document contractual relations for the Ukrainian derivatives market and thereby promote the use of derivatives for financial and commodity markets. Commodity derivatives will include financial products, agricultural products (wheat, corn, soy beans, rape seed), metals (aluminum, copper), and diesel. It is anticipated that a draft agreement will be discussed and approved by the working group next quarter.

FST monitors and supports other laws on its priority reform list. For example, FST participated in the NBU and Verkhovna Rada discussions of the draft Financial Leasing Law, which is now being finalized by the Finance, Tax, and Customs Committee of the Parliament for the second reading. It is expected that this law will be adopted in Q2 2021.

FST continued its involvement in the Base Erosion Profit Shifting legislation. In December, the Parliament passed the so-called BEPS Amendment Law in response to comments made by the business community and supported by the President. FST’s subcontractor, EY, provided proposals to the Finance, Tax, and Customs Committee of the Parliament on that law, some of which were included in the Law. The FST/EY comments were aimed to ensure the Amendment Law did not materially change the BEPS Law adopted in January 2020 that implemented the OECD Action Plan on Base Erosion and Profit Shifting.

FST’s original list (compiled in 2016) of priority financial sector reform legislation contains one item that has not yet been adopted into law – the IOSCO Principles Law. USAID/FST has worked intermittently with the Commission on this law for four years, and was one of the original drafters of the legislation. The Law provides the Securities Commission with greater political independence, funding, and enhanced powers to regulate the market.

This quarter, the NSSMC completed a draft of the IOSCO Principles Law (also known as the Independent Powers Law), which brings the regulatory powers of the NSSMC in conformity with international standards. The independent powers contained in this law will enable the Commission to implement the new Regulated Markets and Derivatives Law (#738) in full. FST translated this draft law into English and will share it with interested parties – the IMF, the EU, World Bank, US SEC, and US CFTC. FST also engaged a consultant to provide advice on the constitutionality of the draft Law. The Project will promote its passage once it is registered with the Parliament, which is anticipated in late January 2021.

In Q1 2021, FST completed its assistance to the NSSMC to increase the professionalism of financial market participants by introducing new educational standards for certification. Since FY2018, FST has supported the professionalization of securities market participants as part of its combatting corruption initiative.

In December, the NSSMC approved the new exam programs for capital and organized commodity market professionals. The exam programs developed by FST consultants are a key entry requirement

In December 2020, the NSSMC approved the new exam programs for capital and organized commodity market professionals

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for the financial markets profession. The new exam programs cover three modules (basics of economics and finance, legislation, and practical skills) for professionals of different market entities such as investment firms, custodians, asset managers, stock exchanges, commodity exchanges, clearing entities, non-state pension funds, real estate construction funds, including accountants working for such companies.

2. PUBLIC CONFIDENCE AND COMMUNICATIONS

The FST communications team conducts activities to build public confidence in the financial system. It also supports Project outreach activities and public events of FST’s partners. Financial literacy and consumer protection are primary areas of concentration, as are the public activities of FST’s grantees. Financial Literacy Training Program for US Peace Corps Ukraine

FST is partnering with the Peace Corps in Ukraine to develop and implement a program to improve financial life skills among rural youth. The Peace Corps is active in Ukraine’s rural communities and reaches an audience that is difficult to serve through the formal educational system. FST developed a customized program for the Peace Corps “Me and My Money” targeted at rural youth. This quarter, FST continued training local Ukrainian personnel in financial literacy and began preparing for the return of American Peace Corps volunteers in early summer 2021. Specifically, FST conducted on-line sessions in a “question and answer” format for those who have begun to organize activities for rural youth. In addition, FST assisted the Peace Corps in conceptualizing a monitoring and evaluation plan for the “pilot project” phase to assess results and make programmatic adjustments. FST also completed the translation into English and the copyediting of its 10th Form Financial Literacy textbook and workbook to facilitate understanding of Ukraine’s financial system by the American Volunteers. On December 14, Natalia Lozytska, FST Communications Director, and Natalia Bykova, Program Manager for Youth Development Programs at Peace Corps Ukraine, presented the new program at an international seminar of the OECD/International Network for Financial Education and the Ministry of Finance of the Netherlands. The theme of the webinar was “Addressing the Financial Literacy Needs of Rural Populations.” Support for LIGA.Money

FST continued to support the creation of content on personal finance for LIGA.Money, the bank loan comparison and financial education platform it launched on October 1. Specifically, FST produced content based on the social media event “Ask the Expert,” moderated by a popular TV presenter Yanina Sokolova, FST produced: i) 21 short video episodes for posting on social media; and

Presentation of the “Me and My Money” training program at the OECD workshop; December 14, 2020

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ii) three programs on Savings, Loans, and Financial Fraud (two programs of 10 minutes each and one program of 17 minutes) for broadcasting on TV.

21 video episodes were posted on LIGA.Money and FST Facebook pages.

The three programs on Savings, Loans, and Financial Fraud were offered for broadcasting to regional and national TV channels.

Support for NGOs/FST Grantees

During the quarter, FST participated in online events to promote financial consumer protection and education. These included:

• Presentation of grant results by the Civil Liberties NGO on November 12. FST DCOP Yulia Vitka and FST Consumer Protection Expert Tetiana Burak spoke at the event on consumer protection, alternative dispute resolution for insurance companies, and mechanisms to handle consumer complaints.

• Presentation of grant results by the Association of Legal Clinics of Ukraine on November 13. DCOP Yulia Vitka spoke on the importance of the new legal and information services provided to financial consumers by legal clinics across Ukraine.

• Presentation by the Legal Clinic of the Ukrainian Catholic University of its free legal aid and education to financial consumers conducted on November 20. FST Consumer Protection Expert Tetyana Burak delivered opening remarks.

• Digital Lending online conference organized on November 27 by the FST grantee Ukrainian Association of Fintech and Innovation Companies. FST Deputy COP Yulia Vitka spoke about changes in financial industry regulation and the importance of consumer protection legislation.

• Expert discussion held on December 14 by FST grantee Independent Association of Banks of Ukraine focusing on the findings of its Ukraine’s lending market research (SME loans, consumer loans, and mortgages).

Commentary on Consumer Protection

FST’s Tetiana Grischenko responded to a personal finance question from the media, what to do if your “Money is Stuck in an ATM,” for the Ukraina TV channel on December 4. The video commentary was broadcast in the “Today” news programs at 9 am and 11pm on December 7. Below is the link to the news program:

https://www.youtube.com/watch?v=WqQ2Edd8KhI&vl=uk&fbclid=IwAR2SdiT4rzsuNbXxKhUfYadc9of82bOsBQ5m8WCE-714qAmxwLSZ9kRfbls#t=12m26s

Expert discussion on Ukraine’s lending market; December 14, 2020

Tetiana Grischenko responded to a personal finance question, what to do if your “Money is Stuck in an ATM,” for the Ukraina TV channel on December 4, 2020

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On December 4, FST co-sponsored the II Annual Conference on Compliance Risk Management organized by Extra Consulting Company, a leading banking consulting and training provider in Ukraine. 100 participants took part in the event including representatives of banks and non-bank financial institutions and international experts from the USA, Great Britain, and France. The Conference participants shared information on assessing and managing compliance risk in financial institutions in accordance with international best practice and regulatory requirements. FST DCOP Yulia Vitka spoke on regulation and consumer protection issues and compliance in Ukraine.

The event is available for viewing at: https://www.youtube.com/playlist?list=PL5CHWYKZsRHVDobtKEoMX92l2AWD8dyK8 https://www.youtube.com/watch?v=wcsJHJx8Kbs&list=PL5CHWYKZsRHVDobtKEoMX92l2AWD8dyK8&index=6

II Annual Conference on Compliance Risk Management; December 4, 2020

3. FINANCIAL CONSUMER PROTECTION Lending Comparison Tool On October 1, FST launched Liga.Money, a digital comparison platform for bank credit products (personal loans, car loans, mortgages, and credit cards). The platform contains a Creditmeter, which allows visitors to apply for loans from participating banks and receive loan offers based on the total cost of credit. It also features personal financial advice articles and information for consumers. The objectives of this initiative are to increase disclosure of the real cost of credit to consumers, to increase competition among banks based on price/cost, and to emphasize to consumers the benefits of comparison shopping. Liga.Money now has the participation of nine leading banks, operates on the CARE principles (Clear, Accurate, Responsible, and Easy to Use) of consumer information, and aggressively puts the consumer first. The site can be visited at: https://money.liga.net/ During this quarter, FST assisted its subcontractor, Liga.Net, to maintain the platform. This included approving technology upgrades to the software (at the request of participating banks), reviewing the marketing plan to attract a wider audience, and supporting the development of visual content for the website (see above). FST’s COP chairs the steering committee with the banks, which meets monthly to discuss strategic and operational issues. In its three months of operation, the platform has received over

Liga.Money short video episode

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800,000 visitors. The number of credit applications on the Liga.Money platform was 1,797 in the 3 months from October 1 to December 31, which is 51% of the FST target of 3,500 referrals. This number needs to be increased to achieve financial sustainability of the platform, which depends on revenue generated by referral fees from banks. High Cost (Payday) Lenders In September 2020, the Parliament approved an amendment to the Consumer Lending Law which increased protection for consumers on personal loans extended by high-cost, short-term (payday) lenders. The amended law brings microloans under the scope of the regulator (the NBU), effective January 2021. Ukrainian borrowers of such loans (loans for less than one minimum salary/shorter than 1 month) will now be able to enjoy the protections offered by the Consumer Lending Law, including the requirement for the lender to state a real annual percentage rate in loan agreements.

During this quarter, FST prepared a Scope of Work to survey the practices of payday lenders prior to the effective date of the law and hired a consulting company to conduct “Mystery Shopping.” The survey report will provide a picture of the “As Is” state of compliance with the main provisions of the Consumer Lending Law by finance companies engaged in micro lending. FST will publicize the results of the survey to the public, the financial community, and to the regulators. A second survey will be conducted in June, 2021 to measure whether the finance companies are in compliance with the law, and whether their lending practices have improved in terms of advertising, disclosure, and truth in lending.

Next quarter, FST intends to conduct Mystery shopping for bank loans to measure compliance with the Law, following up on its earlier surveys. The results of this survey will also be shared on an individual basis with the members of Liga.Money, since this survey will become the basis for the quality performance ratings on the platform. 4. CAPITAL AND COMMODITY MARKETS FST continued its active support for the creation of NEXT UA, a public/private holding company for capital and commodity markets infrastructure (clearing and settlement, central counterparty, trade repository) and trading venue(s). FST reviewed and revised multiple drafts of the Memorandum of Understanding (MOU) on implementing the NEXT, to be signed by the Government of Ukraine, USAID, the EBRD, the American Chamber of Commerce, and other institutions. FST also moved forward with a draft implementation plan for the project, including milestones and a timeline. The project also did NEXT-UA pre-feasibility modelling. NEXT-UA is a very large and ambitious endeavor. Its main purpose is to create a liquid, safe and transparent market for risk management, raising capital, price discovery, and other financial activities important for investors. Prior to a full-blown feasibility study of costs/benefits of NEXT UA, FST prepared preliminary models and projections to evaluate the financial viability of the holding company under various scenarios. FST also prepared a SOW for the feasibility study, which will be circulated for comment from partners prior to entering the procurement process.

Expert discussion on futures; October 9, 2020

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FST conducted important research and analysis of Ukraine’s financial infrastructure since the post-trade environment for NEXT UA is yet to be defined. On November 11, FST held an online meeting to discuss the creation of a Trade Repository (TR). A TR for the centralized collection of information on derivatives and other trade transactions is required under the new capital and commodity market law (738-IX). The TR will bring transparency to the market, mitigate risks, and contribute to market efficiency and better regulation. FST commissioned a study of the European experience with TRs and how the lessons learned there might be applied in Ukraine. The report was discussed by about 50 experts from the government (NBU, NSSMC, NEURC), capital markets (exchanges, investment companies), major banks, and international financial institutions. The report is available on FST's landing page:

http://www.fst-ua.info/wp-content/uploads/2020/11/Ukraine_TRreport_ENG.pdf

http://www.fst-ua.info/wp-content/uploads/2020/11/Ukraine_TRreport_Ukr.pdf

The linkage of securities and derivatives transactions to the country’s payments system is also an important consideration, particularly since almost instantaneous Delivery versus Payment (DvP) is the norm internationally. FST subcontracted SWIFT to study the As Is situation with DvP in Ukraine, and to recommend a To Be model based on an examination of international experience. On October 28, FST and SWIFT representatives presented the results of the study and discussed them with the relevant stakeholders (NBU, NSSMC, National Depository, Clearance and Settlement Center, banks, capital markets and investment firms, etc.). FST circulated the study among the participants in advance to facilitate comments and discussion of the optimal model for the securities settlement system in Ukraine.

The report is available on FST's landing page:

http://www.fst-ua.info/wp-content/uploads/2020/10/Ukraine_DvP_Study_Eng.pdf

http://www.fst-ua.info/wp-content/uploads/2020/10/Ukraine_DvP_Study_Ukr.pdf

With the enactment of law # 738-IX, the question of clearing in Ukraine has become even more pressing. Securities trading and derivatives trading is always accompanied by clearing services. Central Counterparties generally provide clearing and risk management services in developed markets, but in Ukraine there is only a “quasi CCP” that needs to be developed. It is very important to understand the practical, technical, legal, and business issues related to creating a CCP in Ukraine. Therefore, in December, FST hired an international expert with extensive background in developing CCPs around the globe to assist in developing a strategic roadmap for clearing and settlement in Ukraine.

An article “A Spot or Derivative Contract: Understanding Requirements of the New Financial Law" by FST lawyer Marta Savychuk, published on the Economichna Pravda website on October 19, 2020

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FST also promoted the use of derivatives. An article “A Spot or Derivative Contract: Understanding Requirements of the New Financial Law" by FST lawyer Marta Savychuk was published on the Economichna Pravda website on October 19, 2020. Below is the link for the article:

https://www.epravda.com.ua/columns/2020/10/19/666340/?fbclid=IwAR3bm5H_IdMSfNQ7XMVf_LgopiWVfDn--1to9R2ueBsJTXqkzxvFQfaJAVg

On October 9, FST co-sponsored an event with the Ukrainian Exchange on trading financial futures, “UAH/USD Future as an Instrument to Make Money and Hedge Risks.” The discussion focused on appropriate regulation for exchange-traded derivatives, taxation, liquidity and potential new instruments. The experts also emphasized that the new Law of Ukraine #738-IX facilitated market development by eliminating a number of legal risks, improved conditions for the use of derivatives, and made them more attractive to a wider range of professional market participants and their clients. The UAH/USD futures will provide additional commercial opportunities for banks, traders, and investors and will allow market participants to hedge their currency positions. After the launch of UAH/USD futures, market participants expect the appearance of new derivative instruments on grain, oil, other currency pairs, etc.

The event can be viewed at: https://www.youtube.com/watch?v=sNLq7syT1mg&feature=youtu.be 5. ACCESS TO FINANCE FST’s strategy on access to finance for SMEs has been two-pronged: 1) improve the legal and regulatory environment for NBFIs to finance SMEs and 2) support the development of the leasing industry as an alternative source to bank financing. With the Project contract extension, FST has added a new strategic element, development of classical factoring.

Leasing. Leasing finance has quadrupled in Ukraine in the last four years using traditional models, but successful adoption of Vendor Finance programs by Ukrainian lessors could expand the business exponentially. Since 2018, the USAID Financial Sector Transformation Project has promoted Vendor Finance through in-depth analysis, technical assistance, and training, including the development of manuals and guides for successful implementation of the Vendor Finance program. On October 22, FST and the Union of Ukrainian Lessors (UUL) held an on-line discussion on Vendor Finance (VF) for vendors to explain the program. Over 40 participants took part in this discussion, led by FST's International Vendor Finance Expert Katarzyna Kaczmarek. Representatives from vendors (John Deere, Canon Ukraine, etc.), banks (FUIB (PUMB), Kredobank), and leasing companies provided their perspectives on the prospects for Vendor Finance in Ukraine and the challenges to implementation.

The event can be viewed at: https://youtu.be/4xpPhe8-kjI

FST continues to provide analytical and legal support to the UUL. Under the FST Grant to the UUL, FST reviewed and commented on two reports prepared by the UUL on leasing opportunities in the road construction and renewable energy sectors. FST also assisted the UUL in preparing a leasing certification program for its members, in collaboration with the Kyiv School of Economics. The NBU agreed to provide key personnel to conduct some of the courses. FST also cooperated with the UUL on amending the draft law on Financial Leasing in discussions with

Discussion on vendor finance; October 22, 2020

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the NBU and at the Parliament working groups. The draft law is now being finalized for the second reading.

Access to finance remains the major constraint to expanding the availability of leasing finance to SMEs. FST is tackling this problem on two fronts, attempting to gain eligibility for leasing companies to secure additional sources of capital. One is the GOU’s SME loan program, known as 5-7-9, and the second is two European Investment Bank (EIB) credit facilities, collectively worth 800 million Euros.

a. FST has completed drafting the required amendments to include financial leasing in the 5-7-9 Program (Amendments to Procedures). These documents are being reviewed by the Business Development Fund (the BDF), the organization administering the Fund, and are in the process of final approval.

b. For the two EIB credit lines (SME and Agri Apex Loans), FST drafted the eligibility criteria for

leasing companies to be selected as intermediaries. These criteria were discussed with and tentatively approved by the NBU. Currently, FST and the UUL are discussing them with the MoF. FST also prepared the required amendments to the legislation (CM Resolutions #606 and #1054) to grant leasing companies eligibility status.

Factoring. FST will support two private sector efforts to build the Ukrainian factoring market. The first activity is with Supplier Plus, a private firm that provides a platform open to all banks to allocate working capital loans to small business collateralized with debtor approved receivables. Their proposition is unique to the market because it offers transaction structuring that decreases credit risk, facilitates small business onboarding, and automates information exchange between banks and borrowers. FST’s support will include developing digital platform functionality, connecting to banks, borrowers, and market infrastructures (electronic document systems, SME scoring providers, core banking systems); and promotion.

The second work stream is with the Factoring Task Force at the Independent Association of Ukrainian Banks (NABU) and will focus on two infrastructure needs.

1) Offer a concept for the Ukrainian Trade Finance Registry, an electronic registry used for registering financed invoices and clearing invoices to prevent double financing of an invoice by different financiers.

2) Developing Electronic Trade Framework (ETF) for the Ukrainian market – a review of various aspects of electronic invoice and electronic transport documents circulation and adoption in selected counties, overview of electronic ordering in public procurement.

These activities to support factoring will begin in January 2021. 6. DIGITAL FINANCE FST supports the development and use of digital technology to increase efficiency in the financial sector, foster financial information disclosure, and promote financial inclusion. Moving Ukraine to a cashless economy also supports FST’s anti-corruption goals. FST’s subcontractor, SWIFT, completed the development of ISO 20022 payment messages for the NBU. The ISO 20022 messaging standard streamlines and automates bank payments processing, and facilitates new nonbank payments providers to increase the range of payment instruments and services in the market, thereby increasing competition. ISO 20022 also enhances information content of the payment messages and supports AML monitoring and other control functions performed by the banking system. Workshop #11 was conducted by SWIFT online on November 18-19 and covered the following issues: 1) introduction into instant payments (payments service available 365/24 and end-to-end processing of 10 seconds) on the first day and 2) limits and reservations, payments tracking on the second day. FST/SWIFT will support the NBU in 2021 with implementation “troubleshooting” for the messages previously developed in the

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ISO 20022 project. This will include finalizing message content, business process solutions, and payment system software advice.

FST supported two events to promote digital finance. On November 27, FST co-sponsored the Ukrainian Association of Fintech and Innovation Companies online conference, Digital Lending. The theme of the conference was trends in digital finance and online lending during the pandemic. Topics discussed included alternative information sources in online credit decisions; remote identification; new directions in online lending; regulation of micro-finance institutions (MFIs) and consumer protection; and development of new payment instruments. Three FST-supported activities were featured at the conference: i) results of the study “Working with Consumer Complaints: Current Situation and Best Practices in the MFI Sector in Ukraine, 2020”; ii) FinSkarga national mediation platform for handling financial consumer complaints; iii) LIGA.Money, a unique free-of-charge online tool for consumers to compare loans provided by Ukrainian banks.

The event could be viewed at: https://www.youtube.com/watch?v=hLQBmlIx_LY&fbclid=IwAR0b371tkVgyCkfhCHzST3XVmlzxE38bICVZniilfUFCYg56yB5hwC0QFRY

On December 18, FST was a co-sponsor of the second annual FinTech conference. The event gathered over 3,000 representatives of FinTech companies, Ukrainian banks, card payments companies, the NBU and other government agencies, international donor institutions (World Bank, IFC), credit bureaus, auditing firms, software engineers, and others to discuss modern regulations in banking and payments, trends in digital finance, new financial products, and the latest technology innovations. Ukrainian FinTech start-ups also delivered “pitches.”

7. GRANTS PROGRAM

FST’s grant program focused on three main streams: improving financial consumer protection; promoting information disclosure and financial inclusion; and strengthening the institutional capacity of market associations. By the end of this quarter, FST had concluded most of its grants under contract activity, as anticipated with the original project completion date of December 27, 2020. FST disbursed approximately of $890,000. FST’s grantees carried out their activities and achieved their milestones. Next quarter, FST will conduct an evaluation of the program for highlights, lessons learned, and possible follow-on activities.

Digital Lending; November 27, 2020

Second annual FinTech conference; December 18, 2020

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V. PROGRESS AGAINST TARGETS

• Media. There were 433 media mentions about the Project and its activities from October 1 to December 31. Media placements were on financial consumer protection, anti-corruption (iXBRL reporting), capital and commodity market development, vendor financing and on-line loan comparisons on Liga.Money platform.

• Leasing. The latest official FSR data available for the number of leasing contracts concluded is 14,984 as of September 30, 2020. This exceeds FST’s end of FY20 target for leasing contracts of 11,000. The value of leasing contracts concluded was US$935.7 million as of September 30, 2020, compared to the FST end of FY20 target of US$900 million. The leasing industry was the only non-bank sector to report growth in FY 2020 in Ukraine.

• Financial Reporting System. FST conducted seven training seminars with 1,378 participants on the financial statements software for banks, insurance companies, capital markets entities, NBFIs, audit companies, and large enterprises. Training videos and presentations are available online https://frs.gov.ua/ixbrl-tool/pz-dlya-skladannya-finansovoyi-zvitnosti/. This completed FST’s commitment to the Financial Reporting System and the NSSMC and the other regulators.

• FST Events. There were 4,081 participants in eight events which were organized or co-organized by FST in Q1 2021, of which 1,230 (30%) were women and 2,851 (70%) men.

Panel discussion UAH/USD future as an instrument to make money

and hedge risks

9 October 2020

Total: 105 Men: 70 Women:35

Attended by banks, NBU, businesses, NBFIs, and journalists

VENDOR FINANCE NOW! Vendor finance challenge in

Ukraine

22 October 2020

Total: 41 Men: 27 Women:14

Attended by businesses and NBFIs

Ceremony to deliver the textbook and workbook “Financial Literacy. Finances. What? Why? How?" to schools of the Shevchenkivskyi

district of Kyiv

30 October 2020

Total: 11 Men: 1 Women:10

Attended by state officials, Pravex bank, school

Online discussion of establishing a Trade Repository in Ukraine

11 November 2020

Total: 64 Men: 33 Women:31

Attended by NBU, NERC, NSSMC, Ukrainian Energy Exchange, banks, investment companies, National Investment Council of Ukraine, EBRD

Conference: Digital Lending 2020 27 November

2020

Total: 450 Men: 311 Women: 139

Attended by businesses, professional associations, NBFIs, banks, state officials, and journalists

II Annual Conference: Compliance Risk Management

4 December 2020

Total: 103 Men: 38 Women: 65

Attended by banks, NBU, NBFIs

Final event. Market Research on lending in Ukraine

14 December 2020

Total: 67 Men: 29 Women 38

Attended by banks, lecturers, DGF, NBFIs

Conference: UAFinTech 2020 18 December

2020

Total: 3,240 Men: 2,342 Women: 898

Attended by businesses, professional associations, Fintech companies, IFIs, banks, state officials, and journalists

• Compliance with international standards for consumer protection is enhanced in Ukraine. This indicator is fully achieved. The actual score is 5 out of 5 (end-of-project target). The sectoral

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consumer protection framework is now in place with the passage of the draft law 1109, which brings microloans (for amounts less than 1 minimum salary, shorter than 1 month duration) by financial companies under the scope of the Consumer Lending Law. The law was signed by the President on October 6, 2020 and became effective starting January 1, 2021. Thus, borrowers of such microloans gain the protection provided by the Consumer Lending Law, including the requirement for the lender to state in the agreement the real annual interest rate showing the real cost of credit, the prohibition on unilateral changes of material terms, truth in advertising, etc.

• Share of digital payments using payment cards. According to NBU data available as of September 2020, the share of digital payments using payment cards increased to 55.4%, exceeding the target of 40% set for FY20.

• Number of digital transactions using payment cards. The indicator reached 4,310 million and exceeds the FY 20 target of 3,000 million, according to NBU data as of September 2020.

• Number of referrals from digital comparison tool to lending sources. Liga.Money, the comparison shopping site for consumer loans, was launched on October 1, 2020. The web site has three objectives: improving the financial literacy of Ukrainians, increasing competition among partner banks based on the real cost of credit, and disclosure of the real annual percentage rate by participating banks without hidden commissions. The number of credit applications on the Liga.Money platform reached 1,797 within 3 months from October 1 to December 31, which is 51% of the FST target of 3,500 referrals.

• Credit to the private sector. According to the NBU data (September 2020), credit to the private sector was $32,020.1 million, compared to FST’s end-of-FY 2020 target of $40,000 million.

• Ratio of foreign currency deposits to all deposits. The ratio of foreign currency deposits to all deposits remained at the level of the previous year. According to the NBU data, the ratio of foreign currency deposits as of September 2020 was 40.2%, which is somewhat higher than the 38% target of FST.

Other Indicators

Proportion of private and state - owned companies submitting annual standardized financial reports on time to the Financial Reporting System (FRS) Hub. Data is not available yet due to the decision by the Parliament to postpone the launch of iXBRL/IFRS reporting. The FRS reporting will begin January 1, 2021 as stipulated by the Ukrainian legislation. The first quarterly reports will be due April 25, 2021, and the first annual report is due on April 30. FST will track the number of reports received.

Non-banking financial sector as % of GDP. The current value of this indicator is 10% FY20 (as of September 2020) which is slightly higher than in FY19 - 9%. The target set by FST for FY20 is 15%.

European Business Association (EBA) Investment Attractiveness Index decreased -0.11 points (1st half 2020) and reached the level of 2013. This indicator is measured on a scale of 1 to 5 (1-2 negative value; 3-4 neutral value; 4-5 positive value). The business leaders cited the main factors that negatively affect

557426

814

Oct`20 Nov`20 Dec`20

Number of credit applications on the Liga.Money platform in Q1, FY2021

$33,298.60

$35,636.00

$34,403.10

$32,020.10

FY 2017

FY 2018

FY 2019

FY 2020

Credit to private sector, USD million

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the business climate: weak court system (94%), high level of corruption (91%), and size of the shadow economy (75%).

Number of calls to the NBU complaints center. This indicator is inoperative. The FST Project never reached an agreement with the NBU on modernizing its call/consumer complaint operations center. As a result, the NBU did not make any important call center changes (software upgrades, new staff, reporting).

Instead, FST supported an NGO to develop FinSkarga, an automated platform for receiving, monitoring and resolving consumer complaints of users of financial services. The system automatically classifies complaints received and sends them to participating financial institutions to address. This new NGO platform became operational on September 8, 2020. The number of complaints on the FinSkarga platform is 1,033, and the number of resolved complaints is 421 (about 40%) as of December 2020.

Material improvements in the Pension Fund efficiency, pension expenditures ratio to GDP (context indicator) and improvements in the pension system legislation. FST achieved its contractual objectives regarding the pension system of Ukraine in 2019 and no longer devotes resources to this component.

Indicators for New Activities for Project Extension:

In August 2020, the FST Project was extended through August 2021. New activities were added to the Scope of Work due to COVID-19, and the budget was increased by $3 million. The new activities focus on increasing access to finance for SMEs through increasing funding to leasing company intermediaries and introducing classical factoring (invoice financing) to the Ukrainian market. Proposed indicators for these activities are:

Amendments to the resolutions of the Cabinet of Ministers to make leasing companies eligible to intermediate loans from external guarantee funds achieved.

Amendments to the resolutions of the Cabinet of Ministers to allow leasing companies to participate in the State Financial Support Program 5-7-9 for SMEs.

These will be measured on a scorecard basis with points assigned based on accomplishing leasing company eligibility to gain access to finance. Points will be awarded based on identification and analysis of the eligibility issue for access by leasing companies to EIB credit lines (under Ukraine SME Apex Loan and Ukraine Agri-food Apex Loan); identification and analysis of the possibility to gain participation by leasing companies to the GOU 5-7-9 Loan Program; achievement of EIB loan intermediary status; and inclusion of leasing companies into GOU loan programs. FST is actively conducting the second stage, dialog and public discussion with UUL, NBU, BDF, and MoF, to grant eligibility to leasing companies.

For factoring, the indicators will involve the volume and value of invoices financed on a platform FST will support.

Ratio of the value of total amount of invoices that debtors have approved versus the total financed amount that suppliers actually sold on the factoring platform.

Total USD value of SME invoices financed on the FST assisted factoring platform.

VI. PERFORMANCE MONITORING, EVALUATION AND LEARNING

In Q1 2021, FST continued its performance monitoring of the routine data collection of indicators and verified their accuracy. Following the eight-month cost extension of FST and the addition of new activities into the contract, the M&E Manager in consultation with the team leads and the Chief of Party developed the four new indicators to measure progress on activities to expand digital financial intermediation for SMEs (see above). FST also drafted and submitted to USAID a memorandum

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discussing its MEP and the validity/usefulness of its performance indicators, with suggestions how some of them might be updated.

VII. LESSONS LEARNED

This quarter was quite difficult politically for Ukraine. A strong, coordinated, and successful attack on the anti-corruption institutions put in place after Maidan in 2014-15 caused serious damage to efforts to reduce corruption. The “constitutional crisis” in the court system evoked memories of the “bad old days” of raw oligarchic politics, judicial impunity and state capture. It was widely reported that the campaign was carried out by Russian-aligned interests and supported by oligarchs. One purpose of the political effort seemed to be to drive a wedge between Ukraine and its international partners. Difficult discussions with the IMF on Ukraine’s macroeconomic adjustment program were halted and the scheduled IMF loan disbursements did not occur. Lending to Ukraine by other international financial institutions was also put on hold until Ukraine and the IMF agree on measures to restore the reform program. The political events of October to December had immediate consequences financially. Interest rates on domestic government securities remained high (+10%), and access to international private capital markets was limited and expensive. Already weak direct foreign investment in Ukraine reversed course, and for 2020 it was zero, the worst in 20 years. Ukraine’s “large privatization” program to divest SOEs, thereby stopping losses by the state, was also called into question. Opponents of privatization were emboldened that they could use legal tactics in corrupt courts to delay or reverse divestiture, and potential investors expressed pessimism and caution. Investors and financial markets prefer predictability. Ukraine pays a high cost for its inability to agree upon and implement necessary reforms for a competitive market economy. The country desperately needs international capital if it is to grow economically, attend to the basic needs of its people, and combat Russian aggression. It also needs capital markets to support investors – financial instruments to manage risk, venues for trading and hedging, opportunities to raise capital and reward innovation. The Ukrainian government cannot afford international perceptions that it is backsliding on reforms. It needs to address the reforms that matter most to investors: the lack of secure property rights, the absence of the rule of law, and the corrupt court system.

VIII. ENVIRONMENTAL MONITORING

FST has an approved Environmental Mitigation and Monitoring Plan (EMMP) and updated it in FY 2018. No mitigation measures were required this period. Under its grants-under-contract program, FST is reviewing proposals for potential impact on the environment.

IX. PROGRESS ON LINKS TO OTHER ACTIVITIES

FST continued to work collaboratively this quarter with international financial institutions, USAID projects and the international private sector. Much of this effort concerned the development of the NEXT UA multi-asset capital and commodity market exchange concept. For example, FST worked on multiple drafts of the Memorandum of Understanding and exchanged ideas with the EBRD, the American Chamber of Commerce and Citibank’s representative to Ukraine. Similarly, FST continued to support the USAID Energy Security Project (ESP) in the development of its understanding of Ukraine’s financial infrastructure, especially clearing and settlement. FST engaged with various financial markets stakeholders (NBU, National depository, Clearance and Settlement Center, exchanges, banks, government agencies, etc.) on expert discussions/roundtables of its studies of DvP, ISO 20022, and creation of a Trade Repository and CCP.

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Other FST coordinating activities during the quarter included:

• Training and program development support for the US Peace Corps’ initiative to teach financial literacy to younger, rural Ukrainians.

• Formation of a financial markets Working Group to prepare a “Ukrainian ISDA Agreement” to support derivatives trading of financial and commodity futures (with NABU, the ACC, the European Business Association).

• Consultations with the IMF, World Bank, and European Union on the proposed Financial Services Law.

X. PROGRESS ON LINKS TO HOST GOVERNMENT

FST extended its protocol of cooperation with the NSSMC to cover the Project extension through August 2021. FST will sign extensions to its protocols with the NBU, the DGF, and the PFU next quarter. FST also interacts with the Presidential Administration, the Cabinet of Ministers, and the Ministry of Finance. FST continues its active participation in the Rada legislative working groups, particularly those organized by the Banking, Customs, and Tax Committee that deal with NBFI legislation.

XI. PROGRESS ON INCLUSIVE DEVELOPMENT

FST continued to apply a nondiscriminatory and inclusive development approach in all of its activities. The Project strives to advance inclusiveness and gender equality by focusing on the needs of low income individuals, young people, and retirees regarding complaints of users of financial services. The majority of FST grantees were engaged actively in providing support to vulnerable users of financial services through counseling, education, and consumer complaints resolution. At the same time, FST emphasized financial consumer protection as a fundamental requirement for the new implementing regulations of the NBU for non-bank financial services providers.

During the Quarter, FST assisted the U.S. Peace Corps to develop a program for its 400 Volunteers to teach financial literacy to young people in rural areas of Ukraine. FST provided training to local Peace Corps staff, and prepared training materials for American Volunteers for when they return to Ukraine. FST also completed the translation of its 10th Form financial literacy textbook and workbook into English to support the training.

XII. FINANCIAL INFORMATION A financial report for FST will be submitted separately to USAID/Ukraine by DAI/HQ.

XIII. SUB-AWARD DETAILS

FST engaged several firms as subcontractors during the reporting period. The purposes of the awards are described below; more detailed information on the subcontracts is provided in Table E.

• Subcontractor Ernst and Young, LLP completed two task orders for the Project during first quarter of FY 2021. One of these was to monitor amendments to the BEPS tax reform legislation, and the other was to analyze and recommend appropriate tax measures for derivatives trading. - Task Order #11 on further development of BEPS Legislation in Ukraine; - Task Order #12 on analysis and advice for the development of a comprehensive tax

framework for financial sector reform in Ukraine.

• FST has an active subcontract with INFORMATSIINE AGENTSTVO LIGABIZNESINFORM, TOV (LIGA) to manage and promote a Digital Comparison Tool (Liga.Money) that complies with international standards on transparent, accurate, and fair comparisons of bank consumer credit products. The objectives of Liga.Money are to improve the disclosure of information to consumers about the real cost of credit, to empower them to make quality decisions for their

22

financial well-being, and to introduce competition among banks for customers based on price and quality of service.

• The Society for Worldwide Interbank Financial Telecommunication SCRL, S.W.I.F.T. SCRL completed a contract that consisted of two tasks:

1) SEP migration to ISO 20022 messaging platform. As part of its long-term strategy, the National Bank of Ukraine (NBU) determined that Ukraine’s high-value payments real time gross settlement system (HVP RTGS) called SEP (System of Electronic Payments) will migrate to the ISO 20022 messaging standard. The SEP ensures the execution of settlements in hryvnia and foreign currencies among banks, both on behalf of bank customers and under obligations of banks and other system participants. SWIFT, with input from the NBU, developed 19 customized messages and held several workshops with the NBU personnel who will implement the system in 2022. 2) Developing a policy framework for access of CSD/CCP (central securities depository/central counterparty) to the RTGS. The National Securities and Stock Market Commission of Ukraine (NSSMC) and the NBU requested the FST Project to assist them in examining models to accomplish Delivery versus Payment for securities trades in Ukraine. The report analyzed possible models for the settlement of the cash leg for all securities based on ISO 20022, and recommended possible models in the Ukrainian context.

• PONTON GmbH completed a “Study on Establishing a Trade Repository in Ukraine.” The goal of this activity is to determine the most impactful and cost-effective approaches to create a Trade Repository for gathering and analyzing information for on-exchange and OTC transactions. The study covered technical aspects and requirements for trade repository introduction in Ukraine as well as needed primary and/or secondary legislation regarding trade repository to align Ukrainian standards with those of the EU.

• In June 19, 2020, the Parliament passed draft law #2284 "On simplification of attracting investments and implementing new financial instruments" (now Law #738-IX). The new law establishes the legal framework for capital and organized commodity markets in Ukraine. It also provides that the NSSMC should adopt all required regulations by July 1, 2021, and for commodity markets - by January 1, 2021. At the request of the NSSMC, FST awarded sub-contracts on a competitive basis to three law firms to assist the Commission to draft the required implementing regulations. The law firms are: - with CMS Cameron McKenna on drafting regulations on clearing; - with EKVO on drafting regulations on a trade repository; - with Sayenko Kharenko on drafting regulations on functioning organized markets;

• Finally, FST has an active purchase order with Info Sapiens LLC to perform a Microlending Mystery Shopping Survey. The purpose of this study is to analyze and evaluate the compliance by finance companies with the Consumer Lending Law, the Consumer Protection law, and other consumer-oriented legislation. The focus is on microloans for consumers.

XIV. ACTIVITY ADMINISTRATION

A. Constraints and Critical Issues FST continues to implement a remote work policy, with most staff working from home and most events and meetings held on-line. The FST COP works from the Project office, and occasionally an administrative/finance or technical staff member will be present in the office if a specific task requires it. All technical and support staff have assignments, the performance of which are monitored by Team

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Leads and/or direct supervisors. The COP conducts teleconferences with all team leads twice per week and with individuals on an as needed basis. FST holds a weekly conference with the USAID/COR. Project staff stays in regular contact with key counterparts and partners.

Given that the Project completion date is August 27, 2021, and given the worsening COVID-19 situation in Ukraine (it is unlikely that a vaccination program will be started until May), FST reduced its leased office space by almost half as of January 1, 2021. In late December, FST transferred some office furniture and equipment to one Project recipient - the National Securities and Stock Markets Commission.

FST signed a new Protocol of Cooperation with the National Securities and Stock Markets Commission and received a new Project registration card in December 2020. DAI expects to sign additional protocols with other beneficiaries in the 2nd Quarter.

B. Personnel FST extended long-term employees fixed-term employment agreements until the Project end date based on the Project needs and employees functions. FST continues to recruit local and international short-term consultants in the area of NBFI, legal, capital and commodities markets, etc. Otherwise, the Project is fully staffed.

C. Contract Modifications and Amendments There were no new modifications or amendments signed during the reporting period.

D. Status of Deliverables/Milestones See the Deliverables Table in Annex A.

E. Summary of Future Activities and Geographical Information See the Future Activities table in Annex B.

XV. ATTACHMENTS A. Status of Deliverables

B. Future Events and Geographic Details

C. Project Documents and Publications

D. Performance Data Table

E. Sub-Awards Table

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ATTACHMENT A: STATUS OF DELIVERABLES

FST – Deliverables Completed Q1 2021, Octoder-December 2020

DO1: Corruption Reduced in Target Sectors

Deliverable (Name & Description) Date Contribution to Key Objective

Framework Element 3: Financial Disclosure / Transparency

1. Support implementation of BEPS principles Oct-Dec 2020

Proposals provided to Rada’s Committee on the BEPS amendment law. Reports on BEPS law and BEPS amendment laws to assess compliance of key changes with OECD Action Plan completed.

2. Certification of stock market professionals Dec 2020 Exam program taxonomies updated by FST to take account of new regulated markets law (#738) and approved by the NSSMC. Exams under the new procedures can start from September 1, 2021

3. Implementation of the digital comparison tool (DCT): - LIGA.Money officially launched on www.money.liga.net on October 1, with 7 partner banks (ОТP, Akord, Tascombank, Pravex, Ukrsibbank, Raiffeisen Aval, Bank of Investments and Savings) - During October- November, 2 more banks - Forward Bank and Credit Agricole Bank - joined the platform. - In the first three months of its operation, Liga.Money has attracted 214,840 website visitors and generated 1,797 applications for loans in the total amount of over UAH 92,5 mln - Based on the launch event Ask the Expert call-in show, FST produced: 21 short video episodes for posting on social media, and 3 programs on Savings, Loans and Financial Fraud for broadcasting on TV.

Oct-Dec 2020

Promotion of transparency, financial disclosure, banking sector competitiveness. “Just-in-time” financial education for consumers. Empowering consumers to make better choices in selecting credit products based on comprehensive cost analysis. Private sector partnership with banks.

DO4: Inclusive, Sustainable, Market-driven Growth

Deliverable (Name & Description) Date Contribution to Key Objective

Framework Element 1: Enabling Environment

A. Legal / Regulatory

1. Support the development of new regulations for NBFI markets Oct-Dec Memo on supervisory approaches to fit and proper status of owners of qualifying holdings submitted to the NBU. Comments provided to the NBU on the roadmap for implementation of the market conduct regulation and supervision concept. Comments provided to draft NBU regulations on enforcement measures, risk criteria, ownership structure, offsite supervision and inspections

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Deliverable (Name & Description) Date Contribution to Key Objective

2. Legal advice on financial services framework law, financial companies law, financial leasing and microfinance legislation

Oct-Dec Comments provided to the NBU on draft financial services law. Comments provided to the Parliamentary working group on the draft financial leasing law.

3. Legal and regulatory advice to NSSMC, ministries (IOSCO, IOPS and EU Directives)

Oct-Dec Draft law on taxation matters needed to implement the regulated markets and split laws for the NSSMC. Work initiated on various regulations for the NSSMC for the regulated markets law (on licensing and operations of commodity exchanges; operators of trading in financial instruments; clearing entities; and trade repository). Working group for the development of local ISDA master agreement for OTC derivatives created and RFP issued to provide legal support for the development.

4. Review of a draft law on consumer protection in real estate construction financing schemes

Oct-Nov Comments to a draft law developed by the Ministry For Communities and Territories Development.

B. Public Confidence

1. Research on complaints handling practices at financial companies November 27, 2020

Survey report produced. Public presentation conducted (Digital Lending Conference).

2. Mystery shopping survey on payday lending practices and compliance with consumer protection laws

December, 2020

Survey field work completed. Raw data collected and structured.

3. Closure of activities/projects of FST grantees December, 2020

Grant projects closed according to the Grants Manual, results estimated.

4. Communications support to the Pension Fund of Ukraine: - brandbook development completed - online presentation to the PFU staff, regional offices

Oct 2020 Improve public confidence in the PFU. Support the PFU strategic communications.

5. Support Peace Corps Ukraine financial literacy program, “Me and My Money” for rural youth: - Two Q&A training sessions to the US Peace Corps Ukrainian personnel on "Me and My Money" educational materials - FST financial literacy textbook and workbook translated and copyedited for Volunteers for training

Oct-Dec 2020

Expand the financial inclusion of the Ukrainian population. Promote a more knowledgeable, empowered financial consumer.

6. Presentation on US Peace Corps/FST rural youth program OECD/Ministry of Finance – Netherlands webinar “Addressing the Financial Literacy Needs of Rural Populations in South East Europe”

Dec 2020 Highlight and share Ukraine’s experience in delivering financial education to vulnerable groups.

7. With Pravex Bank, transfer ceremony of 500 sets of FST financial literacy textbook “Financial Literacy: Finance. Why? How?” donated to Kyiv schools of Shevchenkivskyi district.

Oct 2020 Raise levels of financial literacy and consumer protection among the younger generation. Partnership with banks.

8. Video commentary on the topic “Money Stuck in ATM” provided by FST Head of Legal Department Tatiana Grischenko for the Ukraina TV channel

Dec 2020 Promote a more knowledgeable, empowered financial consumer.

9. An article “A Spot or Derivative Contract: Understanding Requirements of the New Financial Law" by FST lawyer Marta Savychuk published on Economichna Pravda

Oct 2020 Facilitate developing of new financial instruments in Ukraine. Support for capital and commodity market reform.

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Deliverable (Name & Description) Date Contribution to Key Objective

10. With the Ukrainian Exchange, seminar on trading financial futures on exchange “UAH/USD Future as an Instrument to Make Money and Hedge Risks”

Oct 2020 Facilitate developing of new financial instruments in Ukraine. Support for capital and commodity market reform.

11. Online expert discussion of a Trade Repository (TR) in Ukraine, based on a study of the European experience with TRs

Nov 2020 Increase transparency on the market, mitigate risks, and contribute to market efficiency and better information disclosure.

12. With the Ukrainian Association of Fintech and Innovation Companies online conference on Digital Lending in the era of COVID-19

Nov 2020 Highlight trends in digital online lending during the pandemic. Promote consumer protection.

13. Co-sponsored the 2nd Annual Compliance | Risk | 2020 Conference

Dec 2020 Contribute to market efficiency and better regulation.

14. Support for public events/presentations by FST grantees - 10th CFA Society Ukraine Investment Forum and Global Ethics Day celebration - Civil Liberties NGO presentation of the results of its alternative dispute resolution mechanism for insurance companies and consumer complaints - Association of Legal Clinics of Ukraine presentation of the legal consultancy and financial education activities of its member clinics - Independent Association of Banks of Ukraine (NABU) presentation of research findings on Ukraine’s lending market (SME loans, consumer loans, mortgages)

Oct - Dec 2020

Emphasize the importance of ethical decision-making on capital markets. Increase financial literacy and promote consumer protection. Improve lending environment and practices in Ukraine. Promote development of new financial products and practices to improve the well-being of Ukrainians

Framework Element 2: Access to Finance

1. Draft new regulations for NBFI markets (leasing and factoring) Oct-Dec 2020

Comments provided to draft NBU regulations on Inspections and Licensing.

2. Draft financial leasing law Oct-Dec 2020

Comments provided to the Draft Law #1111 on Financial Lease for the second reading at the Parliament.

3. Monitor the UUL Grant Oct-Dec 2020

Provided technical monitoring and support for activities to strengthen the capacity of the UUL.

4. Achieve eligibility for leasing companies to participate in EIB Apex Loans (800 million Euro)

Oct-Dec 2020

Eligibility criteria for leasing companies drafted and discussed with UUL, NBU, MoF.

5. Support on including leasing in GOU 5-7-9 Program Oct-Dec 2020

Drafted 5-7-9 Resolution and Program prepared and discussed at the working group (BDF and UUL)

6. With the Union of Ukrainian Lessors (UUL), an on-line discussion of Vendor Finance by FST expert Katarzyna Kaczmarek

Oct 2020 Promote vendor finance business model on Ukrainian leasing market. Increase SME access to finance via leasing.

7. Training on leasing for NBU and UUL Oct-Dec 2020

Expert recruited and training curriculum approved by the NBU.

8. Conference on Digital Consumer and SME Lending Nov 27, 2020 Support for digital on-line lending and payments transactions. Facilitation of FinTech and bank networking.

9. Conference to discuss FinTech innovations, payments, and market regulations, convening over 3000 Ukrainian and international FinTech companies/entrepreneurs, bankers, card payments companies, market regulators, international institutions (World Bank, IFC), credit bureaus, auditing firms, and software engineers

Dec 18, 2020 Promote cashless transactions. Promote the development of FinTech.

27

Deliverable (Name & Description) Date Contribution to Key Objective

Framework Element 4: Financial Infrastructure

1. Study on establishing a Trade Repository in Ukraine completed, published and circulated.

Nov 4, 2020 Support reform of trading, clearing and settlement systems in capital and commodity markets. Comment: Trade Repository is an entity that is responsible for collecting and storing information for on exchange and OTC derivatives transactions. Law #738-IX stipulates that such an entity has to be created in Ukraine.

2. EOI for education program on derivatives, dedicated to agricultural market participants published.

Dec 7, 2020 Support the development of derivatives users/traders in agricultural commodity markets. Comment: FST is exploring local capacity to create and deliver a course on derivatives specifically for the agricultural market. Before moving on to drafting an RfP, FST team decided to issue an EOI, to estimate the costs and assess the capacity of educational institution in Ukraine.

3. NEXT-UA implementation plan drafted. Nov 3, 2020 NEXT-UA implementation plan drafted and circulated among stakeholders to use a basis for drafting a MoU among various stakeholders.

4. Study on clearing and creation of a CCP in Ukraine Dec 12, 2020 Support reform of trading, clearing and settlement systems in capital and commodity markets. Clearing expert recruited and hired.

5. EOI for NEXT-UA feasibility study drafted Dec 30, 2020 Support the development of capital and commodity markets, consolidation of financial infrastructure and attracting anchor investors into Ukrainian energy, agro and capital markets.

6. Margin analysis Dec 24, 2020 A brief report was done to analyze transferring settlements on derivatives market from exchanges to the Central Counterparty. Comment: Margins are the most efficient tool for risk management

methodologies.

7. Pre-Feasibility Financial Model for trade and post-trade infrastructure development 2021-2030.

Dec 31, 2020 First stage completed: calculation for Exchange and CCP for the model. Comment: In developing NEXT-UA’s feasibility study, the FST team made some financial projections on NEXT-UA internally.

8. Transferring the Ukrainian RTGS payment system SEP (System of Electronic Payments) to a new messaging platform based on ISO 20022 standard. The final Workshop under this contract was held, completing the messaging system content.

Nov 18-19, 2020

The ISO 20022 enhances information content of the payment messages that facilitates AML monitoring and other control functions performed by the banking system.

28

ATTACHMENT B: FUTURE EVENTS AND GEOGRAPHIC DETAILS

FST – Projected Q2 Activities, January-March 2020

DO1: Corruption Reduced in Target Sectors

Activity/Description Partners Date Location Objective

Framework Element 3: Financial Disclosure / Transparency

1. Implement Digital Comparison Platform. Liga.net, Ukrainian banks

Jan-March 2021

National Create sustainable platform, promote its use to consumers, increase competition among banks, provide consumer protection.

DO4: Inclusive, Sustainable, Market-driven Growth Activity/Description Partners Date Location Objective

Framework Element 1: Enabling Environment

A. Legal / Regulatory

1. Support the development of new regulations for NBFI markets

NBU, NSSMC

Jan-March Kyiv Gap analysis of Ukrainian laws on market integrity with international best practices to assist the NBU to develop and implement market conduct regulations and a market supervision concept. Comments to draft NBU regulations on licensing and other issues.

2. Legal advice on financial services framework law, financial companies law, financial leasing and microfinance legislation

NBU, Rada Committee

Jan-March Kyiv Work in the Parliamentary/NBU working groups on financial leasing and financial services draft laws.

3. Legal and regulatory advice to NSSMC, ministries (IOSCO, IOPS and EU Directives)

NSSMC, NBU

Jan-March Kyiv Licensing rules and requirements for commodity exchanges approved by the NSSMC. First drafts of NSSMC regulations for trading of financial instruments, for clearing entities, and for trade repository. First draft of local ISDA master agreement for OTC derivatives developed and discussed with the stakeholders. Comments on draft NSSMC independent powers law (IOSCO principles), and presentation on the key issues of the law prepared.

B. Public Confidence

1. Mystery shopping survey on payday lending practices and compliance with consumer protection laws

NBU, Associations (AFI, VAFK),

March 16, 2021

Kyiv Survey report produced and public presentation conducted.

29

Activity/Description Partners Date Location Objective

2. Mystery shopping survey in retail lending for DCT Banks March 2021 Kyiv Survey fieldwork completed Data on lending banks and for DCT collected and analyzed

3. Promote LIGA.Money platform, both creditmeter and personal finance content

Liga.net, banks

Jan-March 2021

Promotion of transparency, financial disclosure, banking sector competitiveness. “Just-in-time” financial education for consumers. Empowering consumers to make better choices in selecting credit products based on comprehensive cost analysis. Private sector partnership with banks.

4. Trainings for the PFU Communications officers on Effective Communications with Mass Media and Public and Public Speaking

PFU Feb-March 2021

Kyiv Increase the PFU communication and outreach capacities.

5. Produce video instructions on how to use PFU e-services

PFU March 2021 Kyiv Raise awareness about PFU e-services Increase and make more effective PFU e-services. Increase public confidence.

6. Support to the Peace Corps Ukraine on financial literacy program “Me and My Money” for rural youth

Peace Corps Jan-March 2021

Kyiv Expand the financial inclusion of the Ukrainian population. Promote a more knowledgeable, empowered financial consumer.

7. Support for the Global Money Week educational activities

NBU, DGF, MinEdu

Feb-March 2021

nationwide Raise levels of financial literacy and consumer protection awareness among the younger generation.

8. Support to the NBU for a consumer protection campaign, “Know your Rights”

NBU Feb-March 2021

Kyiv Promote a more knowledgeable, empowered financial consumer. Support grantees.

Framework Element 2: Access to Finance

1. Support on drafting new regulations for NBFI markets (leasing)

NBU, UUL Jan-March 2021

Kyiv Legal comments to improve regulations.

2. Support on drafting the financial leasing law NBU, UUL Jan-March 2021

Kyiv Finalize the Draft Law #1111 on Financial Lease for the second reading at the Parliament.

3. Support on factoring issues NABU Jan-March 2021

Kyiv Study/plan on building an e-invoice registry. Factoring Association support.

4. Support on access of the leasing companies to EIB Apex Loans

MoF, NBU, UUL, NIRAS

Jan-March 2021

Kyiv 1. The eligibility criteria and collateral requirements for leasing companies are finalized within working group (MoF, NBU, UUL, NIRAS); 2. The amendments to Resolutions #606, # 1054 to include leasing companies as Intermediaries into the EIB Apex Loans Programs drafted and discussed within working group (MoF, NBU, UUL, NIRAS).

5. Support on including leasing in 5-7-9 Program MoF, NBU, UUL,

Jan-March 2021

Kyiv Draft 5-7-9 Resolution, Program, Template Agreement discussed and finalized with UUL and BDF.

30

Activity/Description Partners Date Location Objective

6. Guide on restructuring issues for NBFI and SME MoF, NBU, UUL, NABU

Jan-March 2021

Kyiv First draft of the Guide on Restructuring provided.

7. Training on leasing for NBU and UUL NBU, UUL Jan-March 2021

Kyiv Training conducted both for NBU and UUL.

Framework Element 4: Financial Infrastructure

1. Study "Implementation of DvP securities settlement system in Ukraine."

NSSMC, NBU, Market Participants

Feb-March 2021

Kyiv Support reform of trading, clearing and settlement systems in capital and commodity markets.

2. "Roadmap development of establishing a CCP in Ukraine."

NSSMC, NBU

Feb 2021 Kyiv Support reform of trading, clearing and settlement systems in capital and commodity markets.

3. Legal advice on CCP regulations NSSMC Feb 2021 Kyiv Support reform of trading, clearing and settlement systems in capital and commodity markets.

4. Pre-Feasibility Financial Model for the trade and post-trade infrastructure development in 2021-2030

EBRD, ESP, NBU, NSSMSC

Feb-March 2021

Kyiv Support reform of trading, clearing and settlement systems in capital and commodity markets.

5. Feasibility Study on NEXT-UA launched EBRD, ESP, NBU, NSSMSC

Feb-March 2021

Kyiv Support reform of trading, clearing and settlement systems in capital and commodity markets.

6. Public Opinion Survey and Report on Financial Literacy and Financial Inclusion, using OECD methodology to measure the progress and report results (MEP)

NBU March 2021 nationwide Assess levels of financial literacy and financial inclusion of Ukrainians. Survey data for FST M&E purposes. Better targeting of financial literacy activities.to restore confidence in the financial system. Internationally comparable data with OECD countries.

7. Support private sector development of factoring as a financing tool for SMEs. Promotion/marketing/introduction of classical factoring to the Ukrainian market; software development for linking banks and SMEs; development of the concept of a Ukrainian Trade Finance Registry.

Supplier Plus, NABU Factoring Task Force

Feb-Aug 2021

Kyiv Access to alternative finance for SMEs. Development of software to link banks and SMEs to an e-invoicing platform. Increase transparency in business transactions and taxation, automation of document flow and trade financing transactions.

8. FST/SWIFT support for the NBU in implementing the messages designed in the stages 1 and 2 of the ISO 20022 project

NBU, SWIFT Complete the implementation of the ISO messaging platform and design the instant payment module that will give business users and consumers 365/24 access to the payment system.

31

ATTACHMENT C. PROJECT DOCUMENTS AND PUBLICATIONS

1 Draft Law introducing changes to the Tax Code of Ukraine for implementation of the Split Law and the Law on Regulated Markets

2 Reports on BEPS Law and on Amendments to BEPS Law*

3 Exam program taxonomies prepared for the NSSMC as part of the professional certification reform approved by the NSSMC

4 Memo to the NBU analyzing European supervisory approaches to fit and proper status of owners of qualifying holdings in NBFIs

5 Report on the results of the Research on complaints handling practices at financial companies (November 2020)

6 Report on Renewable Energy sector potential for the leasing companies

7 Report on Road Construction sector potential for the leasing companies

8 NEXT UA Master Implementation Plan.docx**

9 EOI NEXT-UA Feasibility Study.docx**

10 EOI Course on derivatives*

11 Margin Analysis: Transferring Settlements in the Derivatives Market from Exchanges to the Central Counterparty (Current Margining Practices)**

12 NEXT-UA. Pre-feasibility financial projections**

13

Presentation for OECD/International Network for Financial Education and the Ministry of Finance of the Netherlands webinar “Addressing the Financial Literacy Needs of Rural Populations in South East Europe” http://www.fst-ua.info/wp-content/uploads/2020/12/USAID-Peace-Corps-Presentation-for-Dec14-2020-OECD-workshop-on-FE.pdf

14

Video commentary “Money Stuck in ATM” for Ukraina TV Channel by Tetiana Grischenko broadcast on December 7, 2020 https://www.youtube.com/watch?v=eCnCSJZcUWQ&fbclid=IwAR0KMVW4VyYSLErOVHJZoZJ3qz4ErfGLl9vAMeyPdDPe0uFl9kO6eJk3Nek#t=35m

15 21 short video episodes on LIGA.Money produced for social media based on the launch event Ask the Expert call-in show moderated by Yanina Sokolova https://www.facebook.com/FSTProject/videos/

16

3 programs on LIGA.Money produced for TV broadcasting based on the launch event Ask the Expert call-in show moderated by Yanina Sokolova: -on Savings, Loans and Financial Fraud. https://drive.google.com/drive/folders/1w7Y5hZWxrgUArHQTlGTRe26oq4d2tPyt?usp=sharing

17 PFU brandbook https://drive.google.com/drive/folders/1vZfsEpv12dyelc3XIO8h-IC_BnbWT1YK?usp=sharing

18

Article “A Spot or Derivative Contract: Understanding Requirements of the New Financial Law" by FST lawyer Marta Savychuk, the Economichna Pravda, October 19, 2020: https://www.epravda.com.ua/columns/2020/10/19/666340/?fbclid=IwAR3bm5H_IdMSfNQ7XMVf_LgopiWVfDn--1to9R2ueBsJTXqkzxvFQfaJAVg

Report on Establishing a Trade Repository in Ukraine http://www.fst-ua.info/wp-content/uploads/2020/11/Ukraine_TRreport_ENG.pdf http://www.fst-ua.info/wp-content/uploads/2020/11/Ukraine_TRreport_Ukr.pdf

19 DvP Study in Ukraine http://www.fst-ua.info/wp-content/uploads/2020/10/Ukraine_DvP_Study_Eng.pdf http://www.fst-ua.info/wp-content/uploads/2020/10/Ukraine_DvP_Study_Ukr.pdf

* Limited distribution ** Not for distribution

Formatted: Spanish (Colombia)

Field Code Changed

Formatted: Spanish (Colombia)

Formatted: Spanish (Colombia)

32

ATTACHMENT D. PERFORMANCE DATA TABLE

Performance Indicator List and Tracking Table (PILTT)

Possible new Mission PMP indicators

Context indicators

Unit of Measure and Source

FY

17

Tar

get

FY

17

Act

ual

FY

18

Tar

get

FY

18

Act

ual

FY

19

Tar

get

FY

19

Act

ual

FY

20

Tar

get

FY

20

Act

ual

FY

21

Tar

get

FY

21

Act

ual

Frequency

of

Collection

DO1: Corruption Reduced in Target Sectors

Sub-IR 1.2.2 Increased financial sector transparency

DO1_1

Proportion of private and state

owned companies submitting

annual standardized financial

reports on time to the

Financial Reporting System

Hub

Unit of Measure: Percent

Source: FRS Public Portal

N/A N/A 1.6% N/A 100%

Data not

available yet

due to the

Parliament

decision to

launch FRS

reporting for

2020 in 2021.

90%

Deadline for

providing

reports for

2020 is end of April

2021.

Annual

Definition: This is a direct indicator of increased financial transparency due to the Financial Reporting System (FRS) based on IFRS standards and implemented as a result of the U.S. Government assistance.

Justification: The FRS system will include financial data on 3,000-5,000 reporting financial companies, banks, and state-owned enterprises. It is a major step forward in standardizing financial information

reporting, promoting transparency and competition, and encouraging foreign investment. The FRS collects, validates and processes financial statements created under the IFRS taxonomy in XBRL

(standardized business reporting language) format.

Disaggregated by: N/A

Baseline: 0

Project Purpose: Create a financial sector that supports businesses of all sizes with products which serve a wide range of business needs

0.1 Overall non-banking financial

sector as % of GDP

Unit of Measure: %

Source: National

Commission for Financial

Services Regulation

9% 10% as of

09.30.2017 11%

8.1% as of

09.30.2018 13%

9% as of

09.30.2019 15%

10% as of

09.30.2020 8% Annual

Definition: This indicator directly measures growth of the non-banking financial sector supporting production, consumption and capital formation affecting economic activity in Ukraine (such as finance and

leasing companies, moneylenders, etc.) Justification: Indicates changes in the volumes of assets of non-banking financial sector providing support to production, consumption, and capital formation.

Disaggregated by: N/A

Baseline: 7% as of 2016

0.2

Person hours of training

completed by management and

or staff of financial

intermediaries supported by

USG assistance

Unit of Measure: number (of

person hours)

Source: project records

0 0 790 3.622 1.530

7.848

as of

09.30.2019

2.230

8.278

as of

09.30.2020

10.000 13.528

as of

12.31.2020

Annual

Definition: This standard indicator EG4.2-4 uses the following equation to express the number of USG-supported training hours that were completed by training participants: Hours of USG supported

training course x Number of people completing that training course. Inclusive financial markets are defined as supporting equitable access to essential financial services (credit, savings, insurance, leasing,

remittances and payment services) of diverse providers (including banks, credit unions, NGOs, non-bank financial institutions, buyers, and suppliers) to low-incomes families and female and male-owned

micro-scale enterprises/activities.

Justification: Indicates expenditure of USG funds to build country capacity. This will be used to demonstrate financial inclusion and depth of access to finance.

33

Unit of Measure and Source

FY

17

Tar

get

FY

17

Act

ual

FY

18

Tar

get

FY

18

Act

ual

FY

19

Tar

get

FY

19

Act

ual

FY

20

Tar

get

FY

20

Act

ual

FY

21

Tar

get

FY

21

Act

ual

Frequency

of

Collection

Disaggregated by: sex (male/female)

Baseline: 0

0.3 Credit to private sector

(context indicator)

Unit of Measure: million

USD

Source: NBU

$34,000

$33,298.6

mln as of

09.30.2017

$35,000

$35,636

as of

09.30.2018

$37,000

$34,403

as of

09.30.2019

$40,000 $32,020.1 as

of 09.30.2020 $34,000

$31,197.8

as of

11.30.2020

Annual

Definition: This indicator expresses the value of financial resources provided to the private sector by the banking system of Ukraine.

Justification: Indicates changes in the financial support of production, consumption, and capital formation affecting economic activity in the country. The number reported is the remaining balance as of the

end of the reporting period.

Disaggregated by: N/A

Baseline: $33,736.1mln as of 12.31.2016

0.4

European Business Association

(EBA) Investment

Attractiveness Index (context

indicator)

Unit of Measure: Score from

1 to 5 (best)

Source: EBA

3.0 3,03

2nd half 2017 3.1

3.07 2nd half

2018 3.2

2.95

2nd half 2019 3.25

2.4

2nd half 2020 2.6 Annual

Definition: This context indicator is the Index developed by the European Business Association which measures the confidence of businesses operating in Ukraine (1-3 negative value; 3-4 neutral value; 4-5

positive value)

Justification: Measures the level of satisfaction with the current investment climate in Ukraine

Disaggregated by: Year

Baseline: 2,85 2nd half 2016

0.5

Ratio of foreign currency

deposits to all deposits

(context indicator)

Unit of Measure: %

Source: NBU 46%

46.1%

as of

09.01.2017

44%

44,6%

as of

09.30.2018

40%

40.3%

as of

09.30.2019

38% 40.2% as of

09.30.2020 39%

39.8% as of

11.30.2020 Annual

Definition: This context indicator is a proportion of FCD to all deposits in the banking system of Ukraine. This indicator should decrease as confidence in local currency grows.

Justification: Allows to understand the level of confidence in the local currency of Ukraine and the level of currency substitution.

Disaggregated by: N/A

Baseline: 46,3% as of 01.01.2017

0.6 Financial System Score

Unit of Measure: Score

(0=the worst; 100=the best)

Source: World Economic

Forum Global

Competitiveness Report

50 42.3

(as of 2019) 52 N/A 44

The World Economic

Forum (WEF) is

reviewing its

methodology for this

index.

Annual

Definition: This context indicator is a composite score of the financial system based on nine sub-indexes. The score is weighted against results of all participating countries. This index is a part of the overall

Global Competiveness Index 4.0, which measures national competitiveness defined as the set of institutions, policies, and factors that determine the level of productivity.

Justification: This context indicator is a score measuring the depth (the availability of credit, equity, debt, insurance and other financial products) and the stability (the mitigation of excessive risk-taking and

opportunistic behavior) of the financial system.

Disaggregated by: N/A

Baseline: 48.7 (as of 2018)

Cross-Component Indicators

34

Unit of Measure and Source

FY

17

Tar

get

FY

17

Act

ual

FY

18

Tar

get

FY

18

Act

ual

FY

19

Tar

get

FY

19

Act

ual

FY

20

Tar

get

FY

20

Act

ual

FY

21

Tar

get

FY

21

Act

ual

Frequency

of

Collection

0.7

Person hours of US-funded

training provided to support

financial sector development

Unit of Measure: Number

(cumulative)

Source: Implementing

partners; reports, activity

reporting

39,060

37,180

Males:

5,936

Females:

31,244

(as of 09.30. 2017)

41,060

89,143

Males:

17,690

Females:

71,453

(as of 09.30.2018)

42,660 89,143 44,020 89,143 102,000 117,207

(as of

12.31.2020)

Quarterly

Definition: This indicator measures the number of USG-supported training hours that were completed by training participants and is calculated by using the following equation - number of persons trained

multiplied by the number of hours in the training curricula. Indicator is cumulative for each reporting period. A person should meet training completion criteria in order to be counted. Training is considered

a project provided if it is conducted by the project directly, is directly sponsored by the project, or implemented under MOU by partners engaged by the project.

Justification: A measure of intensity of trainings provided by the project on financial understanding and awareness.

Disaggregated by: Project sub-component, sex, topic, region of Ukraine, international, local; category of participants Baseline: 0

0.8 Number of media placements

produced with USG assistance

Unit of Measure: Number

Source: Implementing

partners’ reports, activity

reporting

250 822 550

1,978

(as of

09.30.2018)

900 1,988 (as of

09.30.2019) 1250

3,157 (as of

09.30.2020) 3,700

3,590 as of

12.31.2020 Quarterly

Definition: Number of media placements (audio, video, text messages) produced by the project in a given time period. Each airing/printing of the same message is counted separately.

Justification: A measure of intensity of project media campaigns

Disaggregated by: Project-subcomponent, type of media, region of Ukraine

Baseline: 0

Sub - Component A: Increased Public Confidence in, Understanding, and Use of Financial System

A9

Compliance with international

standards for consumer

protection is enhanced in

Ukraine

Unit of Measure: Score from

1 to 5 (best)

Source: Implementing

partners’ reports, activity

reporting

1 1 4 1 5 3 5 4 5 5 Annual

Definition: This indicator measures changes in financial consumer rights protection, which leads to increased public confidence and use of financial system in Ukraine. Assigns score to current state of

legislation that implements European Union directives and international standards (higher score means better compliance of the legislation)

Justification: A measure of progress towards compliance of financial consumer rights protection with EU standards and international standards.

Disaggregated by: N/A

Baseline: 0

A10 Index of financial literacy and

awareness

Unit of Measure: score

Source: public opinion

survey

N/A N/A N/A Bi-annual

Definition: This is a direct measure of public understanding of the financial system and financial services offered by the financial institutions in Ukraine

Justification: A measure of progress towards increasing confidence and use of the financial system of Ukraine by public

Disaggregated by: N/A

Baseline: 51 as of 2018

A11 Loans to population as % of

the total bank loans

Unit of Measure: percentage

Source: National Bank of

Ukraine

17%

17,4%

as of

09.30.2017

18%

19,8%

as of

09.30.2018

19%

24.6%

as of

09.30.2019

21% Data not

available N/A Annual

Definition: This is a direct measure of public use of the financial system and financial services offered by the Ukrainian financial sector.

Justification: A measure of progress towards increasing the use of the financial system of Ukraine by public.

35

Unit of Measure and Source

FY

17

Tar

get

FY

17

Act

ual

FY

18

Tar

get

FY

18

Act

ual

FY

19

Tar

get

FY

19

Act

ual

FY

20

Tar

get

FY

20

Act

ual

FY

21

Tar

get

FY

21

Act

ual

Frequency

of

Collection

Disaggregated by: N/A

Baseline: 16,3% as of August 2016

A12

Trustworthiness and

confidence in financial system

index (context indicator)

Unit of Measure: Score 1-7

(best)

Source: WEF Global

Competitiveness Index

3.4

3,2

WEF Report

2017-2018

3.5

This index

component

was

discontinued

in 2018

3.5 N/A 3.6 N/A N/A Annual

Definition: This context indicator is a part of indexes under pillar 8 of the World Economic Forum Global Competitiveness Index.

Justification: This indicator allows to receive independent measure of business confidence in financial system from an internationally trusted source.

Disaggregated by: N/A

Baseline: 3,4 WEF Report 2015-2016

A13 Number of calls to the NBU

call center

Unit of Measure: Number

Source: National Bank of

Ukraine

N/A N/A 20,000

TBD when

the call

center is

operational

40,000

The NBU

refused from

FST

assistance

22,074 as of

09.30.2020

40,000 Annual

Definition: This is an indicator of expanded inclusive innovative finance due to better access of population to information on innovative financial products through the establishment of a reliable information

channel at the National Bank of Ukraine as a result of the U.S. Government assistance.

Justification: Creation of a fully functioning call center at the National Bank of Ukraine will help (1) expand innovative financial products by providing information to people about them and (2) protect

financial sector consumers by providing advice on how to resolve their complaints and by taking action to resolve the systemic problems.

Disaggregated by: N/A

Baseline: 6,100

A14

Number of referrals from

digital comparison tool to

lending sources

Unit of Measure: Number

Source: Google Analytics;

FST Activity records

N/A N/A 14,000

DCT launch

moved

down to

Mid-

September

2020

60,470

(target

revised due

to the

delays in

launch)

DCT

launched on

October, 1st

2020

3,500 1,797 as of

12.31.2020 Annual

Definition: The digital comparison tool (DCT) presents the cost of credit in real terms (all costs paid to the creditor) and in total terms, (all costs paid to the creditor and the third parties for services

required in the credit agreement) and, hereby, enables consumer loan comparison. The tool provides technical possibility to link the interested consumer with selected creditors and documents the lead

referrals.

Justification: This indicator measures the number of referrals from the DCT, which demonstrates action taken by consumers empowered to make rational decisions in selecting creditors and credit

products mainly based on total costs.

Disaggregated by: N/A

Baseline: 0

Sub - Component B: Transformed Non-Banking Financial Sector Regulatory Environment

B15 Improvements in the securities

and capital markets legislation

Unit of Measure: Score (see

scorecard from 1 to 4)

Source: Activity reporting

1 0 3 2 4 2 4 3 4 3 Annual

Definition: This is a direct indicator of a transition to a more effective regulation of securities and capital markets and of better compliance of this regulation with international practices. This change allows

to achieve higher investor confidence and protection thus better servicing the needs of Ukrainian citizens and enterprises in raising the capital.

Justification: This is direct measure of the securities and capital markets regulatory environment change

Disaggregated by: N/A

36

Unit of Measure and Source

FY

17

Tar

get

FY

17

Act

ual

FY

18

Tar

get

FY

18

Act

ual

FY

19

Tar

get

FY

19

Act

ual

FY

20

Tar

get

FY

20

Act

ual

FY

21

Tar

get

FY

21

Act

ual

Frequency

of

Collection

Baseline: 0

B16

Number of new products

introduced or contracts

developed in capital and

commodity markets with the

assistance of FST

Unit of Measure: # of new

products introduced or

contracts developed

Source: Activity reporting

1 1 3 7 4 7 5 7 5 7 Annual

Definition: This is a direct indicator of financial products introduced and contracts developed with the USG assistance.

Justification: This is direct measure of results which happened due to the securities and the capital markets regulatory environment change

Disaggregated by: N/A

Baseline: 0

B17 Ukraine’s compliance with

IOSCO principles

Unit of Measure: Score from

1 to 9

Source: NSSMC reports,

activity reporting

0 0 3 0 6 0 9 0 9 0 Annual

Definition: This indicator is a direct measure of change introduced to the laws, rules and regulations, which enable compliance of the National Securities and Stock Market Commission with IOSCO

principles in the area of inspection, investigation, and enforcement and allow the NSSMC to use these powers to assist its foreign counterparts. The indicator is based on a scorecard and assigns score to

each change introduced, that implements IOSCO principles. Total possible points - 9

Justification: A measure of progress towards transformation of the non-bank financial sector regulatory environment

Disaggregated by: N/A

Baseline: 0

B18 Operational and IT functions

improvements in NSSMC

Unit of Measure: Score

(Score card from 1 to 9)

Source: Technical Leads and

implementing partners’

reports

5 3 9 9 0 9 0 9 0 9 Annual

Definition: This indicator measures the operational and IT functions improvements of NSSMC. The indicator assigns a score to improvements in the area of the NSSMC’s IT system, strengthening of

information security process and infrastructure modernization.

Justification: This is a measure of improved efficiency of NSSMC, which is a major partner in the legislative work directed to transformation non-banking financial sector regulatory environment.

Disaggregated by: N/A

Baseline: 0

Sub - Component C: Increased Access to Finance for SMEs

C19

Number of leasing contracts

concluded during the

reporting period.

Unit of Measure: Number

Source: Regulator, surveys 8,500

7,502

as of

09.30.2017

9,700

9,124

as of

09.30.2018

10,000

13,544

as of

09.30.2019

11,000

14,984

as of

09.30.2020

9,000 Quarterly

Definition: This is a direct indicator of increased access to finance for SMBs as a result of USG assistance expressed by a number of leasing contracts concluded within the reporting period.

Justification: Indicator of development of the leasing market and improved capacity of leasing companies to finance private sector of Ukraine including SMEs.

Disaggregated by: N/A

Baseline: 7,401 as of October 31, 2016

C20

Value of leasing contracts

concluded during the

reporting period.

Unit of Measure: Millions of

US dollars

Source: Regulator, surveys

330

421.1

as of

09.30.2017

380

789

as of

09.30.2018

820

919.5

as of

09.30.2019

900

935,7

as of

09.30.2020

500 Quarterly

Definition: This is a direct indicator of increased access to finance for SMBs as a result of USG assistance expressed by value of leasing contracts concluded with the reporting period.

Justification: Indicator of development of the leasing market and improved capacity of leasing companies to finance private sector of Ukraine including SMEs.

37

Unit of Measure and Source

FY

17

Tar

get

FY

17

Act

ual

FY

18

Tar

get

FY

18

Act

ual

FY

19

Tar

get

FY

19

Act

ual

FY

20

Tar

get

FY

20

Act

ual

FY

21

Tar

get

FY

21

Act

ual

Frequency

of

Collection

Disaggregated by: N/A

Baseline: 288 as of October 31, 2016

C21 NBFI Legal and Regulatory

Environment Reform

Unit of Measure: Score from

1 to 4

Source: Verkhovna Rada

reports, activity reporting

0 0 2 1 4 2 4 2 4 Annual

Definition: This indicator is a direct measure of NBFI legal and regulatory reform, which enable environment for the NBFI market development including increased access to finance for SMEs. Total possible

points are 4.

Justification: A measure of progress towards NBFI legal and regulatory reform.

Disaggregated by: N/A

Baseline: 0

Sub - Component D: Increased financial inclusion and expanded digital finance solutions

D22 Share of digital payments using

payment cards

Unit of Measure: Percent

Source: NBU 33%

39% as of

2017 35%

44%

as of

09.30.2018

38% 50% as of

09.30.2019 40%

55.4% as of

09.30.2020 55%

57,2% as of 11.30.2020

Annual

Definition: Percent of cashless transactions by volume. The indicator of a share of cashless payments out of the total amount of operations conducted with the help of payment

cards

Justification: Indicator of expanded cashless economy

Disaggregated by: N/A

Baseline: 31,2% as of 2015

D23 Number of digital transactions

using payment cards

Unit of Measure:

Number in millions

Source: NBU

1,600 2,311 as of

2017 2,000

2,200

as of

09.30.2018

2,500

2,992

as of

09.30.2019

3,000

4,310

as of

09.30.2020

3,500 958 as of

11.30.2020 Annual

Definition: This is a direct indicator of increased financial inclusion and expanded digital finance solutions in Ukraine Justification: Measures the number of digital transactions in the economy that should increase due to expansion of digital financial services and increased financial inclusion.

Disaggregated by: N/A

Baseline: 1,287 as of 2015

D24 Improvements in the Digital

Finance Legislation

Unit of Measure: Score from

1 to 4 (best)

Source: Verkhovna Rada,

activity reporting

1 1 2 1 3 1 4 1 4 1 Annual

Definition: This indicator measures improvements in the digital finance legislation leading to better financial inclusion of population and expanded use of digital financial services.

Justification: Improved legislative environment boosts increased financial inclusion of population and expanded use of digital financial services.

Disaggregated by: N/A

Baseline: 0

D25

Female participants in USG-

assisted programs designed to

increase access to productive

economic resources (assets,

credit, income or

employment)

Unit of Measure: Percent

Source: Financial Sector

Transformation Activity

database

N/A N/A 47%

48%

50% 54% 50% Annual

Definition: This indicator is a ratio of women to all males and females who participate in activity interventions [GNDR-2].

Justification: This indicator measures progress towards gender inclusion in USG assistance interventions.

Disaggregated by: Sex

38

Unit of Measure and Source

FY

17

Tar

get

FY

17

Act

ual

FY

18

Tar

get

FY

18

Act

ual

FY

19

Tar

get

FY

19

Act

ual

FY

20

Tar

get

FY

20

Act

ual

FY

21

Tar

get

FY

21

Act

ual

Frequency

of

Collection

Baseline: N/A

D26 OECD Financial literacy index

Unit of Measure: Score

Source: Financial Literacy,

Financial Inclusion and

Financial Wellbeing in

Ukraine Report of survey

company

N/A N/A N/A N/A N/A N/A 12

The next

wave of the

survey and

numbers

update is

planned to

conduct in

early 2021

12 Bi-annual

Definition: This index is based on scores for financial knowledge, attitudes and behavior. The survey used to collect data is based on a questionnaire developed by the Organization for Economic Co-

operation and Development / International Network on Financial Education (OECD / INFE). This allows calculation of the OECD financial literacy index and comparison with 30 other countries.

The survey measures:

• the overall level of financial literacy of Ukrainians, including financial knowledge, behavior and attitudes

• financial product awareness and use

• levels of financial well-being

• awareness of financial consumer protection rights

• demographic differences, such as by income, age and gender.

Justification: Financial literacy is a vital condition for promoting financial inclusion and stability. Financial education plays an important role in helping individuals to access and use the financial services.

Improvement of financial literacy levels is associated with higher levels of financial inclusion. Disaggregated by: N/A

Baseline: 11.2 (as of December 2018)

D27

Interquartile Range of the

Cost of Credit for Personal

Unsecured Loans in Ukraine

Unit of Measure: Percentage

Points

Source: Mystery shopper survey

N/A

N/A N/A N/A

Baseline

collected in

2019

35

The next

wave of the

survey and

numbers

update is planned to

conduct in

early 2021

35 Annual

Definition: This indicator measures interquartile range of the annual percentage rates (total cost of the credit including fees and third party costs) of bank personal unsecured loans. This range provides a

measurement of the spread within the data set and how far apart the first and third quartile are. If the interquartile range is large this means that the middle 50% of observations are spaced wide apart and

that there is a significant difference between the total annual percentage rates of different bank personal loans. Total annual percentage rate is the total cost of a credit to the consumer, including fees and third party charges (e.g., required insurance). APR provides borrowers with a bottom-line number they can use to compare the total cost of a loan.

Justification: Decrease in difference between the annual percentage rates of different banks is an indication of increased competition in the consumer lending market, improved efficiency of banks and

associated strong impact on public confidence in the banking system.

Disaggregated by: N/A

Baseline: 39.15 pp. as of September 2019

Sub - Component E: Balanced and Sustainable Pension System

E28 Material improvements in the

Pension Fund efficiency

Unit of Measure: Score

(Score card from 1 to 5)

Source: Technical Leads and

implementing partners’

reports

5 2 0 5 0 5 0 5 0 5 Annual

39

Unit of Measure and Source

FY

17

Tar

get

FY

17

Act

ual

FY

18

Tar

get

FY

18

Act

ual

FY

19

Tar

get

FY

19

Act

ual

FY

20

Tar

get

FY

20

Act

ual

FY

21

Tar

get

FY

21

Act

ual

Frequency

of

Collection

Definition: This is the indicator of the extent, to which the Pension Fund is able to maintain a balanced and sustainable pension system. Specifically, it demonstrates (1) to what extent the Pension Fund has

modernized ICT facilities, which enable it to reduce administrative costs and provide improved services; (2) developed and started implementing action plan to improve financial sustainability of the pension

system. The indicator assigns a score to improvements in the area of the Pension Fund IT system, infrastructure modernization, development of a roadmap and implementation of the information campaign

on the pension system.

Justification: A direct measure of progress towards effective pension system

Disaggregated by: N/A Baseline: 0

E29 Pension expenditures ratio to

GDP (context indicator)

Unit of Measure: Percent

Source: Ministry of Finance

of Ukraine, Pension Fund of

Ukraine

11,2%

9,8% as of

March 2019 (actual

expenditures)

11%

10,8%

as of March

2019 (PFU

report)

11%

10.8% (as of

March 2020

(PFU

report)

10,5%

PFU report

expected to

be published

in March

2021

10%

PFU report

expected to

be

published in

March 2022

Annual

Definition: This is context indicator - percent of total pension fund expenditures to GDP

Justification: A measure of success of reforms of the pension system; can be used to understand effectiveness of the pension system

Disaggregated by: N/A

Baseline: 11,2% as of December 2016

E30 Improvements in the pension

system legislation

Unit of Measure: Score from

1 to 4 (best)

Source: Verkhovna Rada,

activity reporting

1 1 4 1 0 1 0 1 0 1 Annual

Definition: This indicator measures progress in pension related legislation towards more sustainable and balanced pension system

Justification: A measure of the pension system improvements.

Disaggregated by: N/A

Baseline: 0

40

ATTACHMENT E. SUB-AWARDS TABLE

US

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AID-121-BC-17-

00001

1002990-IQC-

17S-27368-00,

Task Order

#11

Financial Sector

Transformation (FST)

Activity in Ukraine

Ernst & Young LLP 22-Jun-

20 30-Dec-20 $58,251.00

Kyiv,

Ukraine

DO1. Corruption

Reduced in Target

Sectors

A. Creation of Fair,

Transparent Markets 1.

Support for BEPS

implementation

https://www.ey.co

m/

Completed

Michael

Beaulieu,

Manager

1776 Tysons

Blvd. Tysons, VA

22102, USA

Further

Development of

BEPS Legislation in

Ukriane

Indefinite

Quantity

Contract (IQC),

Firm Fixed Price

Task Order

October -

December

2020

24-Jul-20

AID-121-BC-17-

00001

1002990-IQC-

17S-27368-00,

Task Order

#12

Financial Sector

Transformation (FST)

Activity in Ukraine

Ernst & Young LLP 1-Oct-

20 30-Dec-20 $103,010.00

Kyiv,

Ukraine

DO4: Inclusive,

Sustainable, Market-

driven Growth. A.1. Legal and regulatory

advice to NSSMC, other

GOU entities on key

legislation (IOSCO, IOPS

and EU Directives)

https://www.ey.co

m/

Completed

Michael

Beaulieu,

Manager

1776 Tysons

Blvd. Tysons, VA

22102, USA

Analysys and advice

for development of

comprehensive tax

framework on

connection with

financial sector

regulation reform

in Ukraine

Indefinite

Quantity

Contract (IQC),

Firm Fixed Price

Task Order

October -

December

2020

6-Nov-20

AID-121-BC-17-

00001

Subcontract

No. PUR-

KYV-19-0089

Financial Sector

Transformation (FST)

Activity in Ukraine

INFORMATSIINE

AGENTSTVO

LIGABIZNESINFO

RM, TOV (LIGA)

10-Oct-

19 30-Jun-21 $421,168.00

Kyiv,

Ukraine

DO1. Corruption

Reduced in Target

Sectors

A. Creation of Fair,

Transparent Markets A.4.

Digital Comparison Tool

(DCT) for retail loans

implementation

http://www.lbi.ua/ Ongoing

Dmitry

Bondarenko,

Director

23.Parkovo-

Syretska Str.,

Kyiv, 04112,

UKRAINE

Digital Comparison

Tool development,

media promotion,

and operation.

Comparison of

credit products and

creation of

explanatory

content on financial

matters.

Fixed Firm Price

Subcontract

October -

December

2020

10-Oct-19

AID-121-BC-17-

00001

Subcontract

No. 1002990-

19S-34148-00

Financial Sector

Transformation (FST)

Activity in Ukraine

Society for

Worldwide

Interbank Financial

Telecommunication

SCRL, S.W.I.F.T.

SCRL

1-Apr-

20 30-Dec-20 $176,600.00

Kyiv,

Ukraine

DO4: Inclusive,

Sustainable, Market-

driven Growth.

A.8. ISO 20022 messaging

implementation

https://www.swift.c

om/

Completed

Ilona Pouna

Senior

Account

Director,

CEE

Avenue Adèle 1,

1310 La Hulpe,

Belgium

Tel: + 32 2 655

3111

SEP migration to

ISO 20022

messaging platform.

Developing a policy

framework for

access of CSD/CCP

(central securities

depository/central

counterparty) to

the RTGS.

Firm Fixed Price

(FFP)

October -

December

2020

15-Apr-20

AID-121-BC-17-

00001

PO #1002990-

PO20-34331-

00

Financial Sector

Transformation (FST)

Activity in Ukraine

PONTON GmbH 1-Jun-20 30-Nov-20 $40,000.00 Kyiv,

Ukraine

DO4: Inclusive,

Sustainable, Market-

driven Growth.

B.4. Support reform of

trading, clearing and

settlement systems in

capital and commodity

markets

https://www.ponto

n.de/

Completed

Tico

Zimmerman,

Managing

Director

Dorotheenstr.

64, 22301

Hamburg,

Germany

Study on

Establishing Trade

Repository in

Ukraine

Purchase Order

October -

December

2020

12-Jun-20

41

US

AID

Aw

ard

No

.

IP N

am

e (

Pri

me

)

Pro

ject

/ A

cti

vit

y N

am

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baw

ard

ee

Nam

e

Sta

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ate

En

d D

ate

Su

baw

ard

Am

ou

nt,

US

D

Lo

cati

on

(L

ati

tutd

e,

lon

git

ud

e,

tow

n,

dis

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or

each

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Su

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Sig

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AID-121-BC-17-

00001

PO #PUR-

KYV-20-0119

Financial Sector

Transformation (FST)

Activity in Ukraine SIEMES KAMERON

MAKKENNA

ELELSI, TOV

23-Dec-

20 15-Jun-21 $45,999.20

Kyiv,

Ukraine

DO4: Inclusive,

Sustainable, Market-

driven Growth.

A.1. Legal and regulatory

advice to NSSMC, other

GOU entities on key

legislation (IOSCO, IOPS

and EU Directives)

https://siemens-

kameron-

makkenna-

elelsi.biz-gid.com/

Ongoing

Ihor Olekhov,

Deputy

Director

38 Volodymyrska

Str., 6th floor,

Kyiv, 01054

T +38 (044) 391

33 77 M +38

(063) 442 65 84

Drafting regulations

on clearing for

implementation of

Law 738-IX

Purchase Order

October -

December

2020

23-Dec-20

AID-121-BC-17-

00001

PO #PUR-

KYV-20-0117

Financial Sector

Transformation (FST)

Activity in Ukraine

YURYDYCHNA

FIRMA EKVO,

ADVOKATSKE

OBEDNANNYA

14-Dec-

20 15-Jul-21 $16,994.40

Kyiv,

Ukraine

DO4: Inclusive,

Sustainable, Market-

driven Growth.

A.1. Legal and regulatory

advice to NSSMC, other

GOU entities on key

legislation (IOSCO, IOPS

and EU Directives)

https://aequo.ua/ua

/ Ongoing

Yulia Kyrpa,

Partner

32/2 Moskovska

Str., BC Senator,

15th floor, Kyiv,

01010

+38 097 448 15

05, +38 044 490

91 00

kyrpa@aequo.ua

Drafting

regulationson trade

repository for

implementation of

Law 738-IX

Purchase Order

October -

December

2020

23-Dec-20

AID-121-BC-17-

00001

PO #PUR-

KYV-20-0108

Financial Sector

Transformation (FST)

Activity in Ukraine

SAENKO

KHARENKO,

ADVOKATSKE

OBEDNANNYA

27-Nov-

20 31-May-21 $91,999.23

Kyiv,

Ukraine

DO4: Inclusive,

Sustainable, Market-

driven Growth.

A.1. Legal and regulatory

advice to NSSMC, other

GOU entities on key

legislation (IOSCO, IOPS

and EU Directives)

http://www.sk.ua Ongoing Oleksii

Shevlyakov,

Director

10 Museynyi lane,

Kyiv, 01001

+38 044 499 60

00

info@sk.ua

Drafting regulations

on organized

markets for

implementation of

Law 738-IX

Purchase Order

October -

December

2020

16-Dec-20

AID-121-BC-17-

00001

PO #PUR-

KYV-20-149

Financial Sector

Transformation (FST)

Activity in Ukraine

Info Sapiens, TOV 27-Nov-

20 30-Jun-21 $39,041.29

Kyiv,

Ukraine

DO4: Inclusive,

Sustainable, Market-

driven Growth.

D.1. Mystery Shopping

Survey in Retail Lending

https://sapiens.com

.ua/ Ongoing

Vadym

Syvohlaz,

Director

34 Lesi Ukrainky

Blvd, 2nd

entrance,

6th floor, suite

606, Kyiv, 01133

+380 (99) 659 61

27

Microlending

Mystery Shopping

Survey

Purchase Order

October -

December

2020

26-Nov-20

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