Problematic aspects of derivative financial instruments’ legal regulation

Abstract

The development of fully functioning capital markets is an extremely important task at the current stage of development of the Ukrainian economy. With the adoption of the Law of Ukraine «On Capital Markets and Organized Commodity Markets», the issue of comprehensive regulation of the functioning of modern financial instruments would seem to have been resolved. However, the analysis of the current legislation regulating derivative financial instruments shows a number of problematic aspects of their legal regulation. It hasbeenestablished that legal regulation of the market of derivative financial instruments, despite the amendments in the legislation, still contains significant gaps, which generally have a negative effect on the regulation of these financial instruments, create obstacles for the formation of trust by investors, which makes them unattractive for investment. Their fragmented legislative regulation is based on contradictory approaches both to the definition of the categorical apparatus and to the types of derivative financial instruments. The outlined problem negatively affects the active development of the derivative instruments market and creates conditions for abuse by emitters of derivative financial instruments.
 The authorshaveindicated that there is a sufficient number of works at the theoretical and legal level, the subjectmatterof which was the study of derivative financial instruments, but the issue of legal regulation of derivative instruments is gaining significant relevance in regard to: changes in the capital market situation; update of existing and introduction of new financial instruments; development of the market of derivative financial instruments that allow us to hedge risks associated with changes in exchange rates or interest rates by means of concluding various types of fixed-termagreements with derivative securities and derivatives. The spread of the use of derivative financial instruments in Ukraine is the key prerequisite for the effective implementation of the process of integration of Ukrainian financial market into the world economy and international financial markets.