Currently, our country lacks the necessary legislative act which can fully regulate
the system of relations that arise throughout the process of development and use of
financial derivatives that becomes an obstacle for the comprehensive provision of other
aspects of such activity.
There is a need to establish a legislative field base in which all objects and subjects
of the stock exchange and over-the-counter markets of financial derivatives interact,
the need to establish clear requirements for issuance and circulation, conditions of state
regulation, etc.
The current legislative field of Ukraine, namely the Tax Code of Ukraine,
provides only a partial definition of financial derivatives: forwards, futures, options,
swaps.
There is a need for more accurate regulation of futures relations, as the existing
legislation only provides definitions and establishes mandatory details, such as the
price of execution, the size of the contract, the size of the margin, the underlying asset,
etc.
The clause on the opening and closing of a position is not legally regulated,
because closing of positions is the delivery by assets or offset. Offset is the opposite
position of the futures when the seller has to buy and the buyer has to sell.
Consequently, the amount of open deals in futures trade is equal to the difference
between the number of purchased and sold futures. It is interesting that only 2-5% of
deals are closed by deliveries. In order to prevent speculation on the stock exchanges,
limits for the rejection of the current day's futures prices for the previous day's price
quotation are set for each type of contract.
The need for legislative regulation is also required for options, because in the
world practice there is the so-called American option, it must be repaid at any time
before the expressions, that is, it is given a term in which the buyer can close the option,
the European option should be repaid on only one date of expressions (maturity, date
of execution).
Therefore, there is a need for a legal definition of various types of operations with
options, namely:
- Straddle – together for the sale and purchase operations with call and put options
on the same basic goods with the same price strike and the date of termination of
contracts;
- Strangel – the sale or purchase of call or put options on the same basic assets
with the same terms of termination of contracts, but with different price of execution;
- Spread – is an option operation, whereby income is formed by the difference
between the premium for the sold option and the premium paid for the purchased
option.
- 685 -