Trading operations with securities

Operations with securities and services at the stock market of Ukraine

OJSC "Megabank" carries out professionally all the operations with securities permitted in Ukraine. The bank has the License of the State committee of securities and stock market for the activities of issue and distribution of securities, series AA №549038 of 22.04.2003, as well as National bank of Ukraine license for:

• buying, selling securities and operations with them;
• buying, selling state securities and operations with them;
• securities issue;
• investment to statutory funds of other legal bodies.

OJSC "Megabank" renders services with the following kinds of securities:

• stocks;
• Bills of exchange:
  • bills of exchange of economy subjects;
  • bills of exchange of the Pension fund of Ukraine.
• state securities:
  • bonds of internal state loan;
  • bonds of internal state loan for the offset of overdue budgetary debt with VAT.
• corporate bonds.

Securities and monetary assets management at the stock market:

• utilization of direct investments in the stock (share) capital;
• distribution of investors means, including full or partial buying of companies, financing investment projects, organization of joint ventures, increasing liquidity and earnings yield of the client securities.

Confidential estate administration of legal bodies:

• forming securities holdings of the client;
• managing securities holdings of the client providing the agreed level of profitability.

Consulting analytical service of the clients:

• working out optimal structure of securities holdings of the client;
• evaluation of market value and liquidity of the securities holdings of the client including during crediting on the security of stocks;
• rendering consultations concerning legislation and taxation of operations with securities.

Informational analytical service of the clients:

• preparation of analytical reports on investment fitness of the issuers;
• preparation of informative reports on securities trading in PFTS.

Organization of issue and distribution of securities

OJSC "Megabank" renders services of General agent of securities distribution – stocks, bonds, etc.

The issue of corporate bonds is a solution of the problem of capital formation for a long term and an alternative of credits.

The main advantages of stock loans include:

• possibility of independent definition of profitability of stocks, economically profitable for the investor and acceptable for the issuer (as a rule, lower than credit rate);
• independent determination of bonds issue terms and redemption conditions;
• the right to choose potential investors;
• positive influence on the credit rating of the issuer;
• the absence of the necessity to provide for resources attraction.

The traditional scheme of bond placement admits the cooperation of the bond issuer with the bank – General agent of issue. The status of OJSC "Megabank" as a universal credit institution enables to render a range of services of issue and placement of bond loans to the issuers.

OJSC "Megabank" renders the following services:

Trading operations with securities (brokerage services):

Securities purchase and sale on behalf of the client:

• at the stock exchange by broker’s offices;
• at the after-market;
• by the First fund trading system (FFTS) and by the South Ukrainian trading information system (STIS);
• from the population (only purchase) on the territory of Ukraine.

Operations with bills of exchange

The banks service the major part of the bills of exchange circulation. Only in a close cooperation of the company economists and bankers with a sufficient qualification and experience makes it possible to elaborate most efficient payment schemes, to create additional circulation of operating assets and to minimize the risk of the operations with bills of exchange.

OJSC "Megabank" renders o full range of services with bills of exchange:

Accounting (discounting) bills of exchange. The credit operation consists in bill of exchange purchase by the bank from the bill of exchange legal holder before the maturity of its payment term by the means with discount. In this case the discount is a payment for the pre-term payment by the bill of exchange (credit) and it is defined on the basis of the bank account rate and the number of days left before the date of the payment by the bill of exchange. If the bill holder makes a provision without resource by the bill of exchange presented for the accounting, then for the additional risks connected with the reduction of the number of persons obliged by the bill, the bank charges additional commission.

Avalizing bills of exchange. Assuming obligations by the bank of the bills payment in case of failure to pay by the payer. According to the regulatory documents of the National bank of Ukraine aval can be made only by the banks – legal bodies. The bank avalizes bills of exchange according to the requirements of the NBU during a banking day. The bank aval makes the bills of exchange more liquid ensuring their free circulation at the stock market of Ukraine.

OJSC "Megabank" avalizes tax anticipation bills issued by the tax payers for the added value for the amount of tax dues.

Bank execution of the functions of a special payer by domiciled and non domiciled bills. The payment of the bill on behalf and at the expense of the bill drawer, reserved at the account of domiciliation. This operation enables to simplify the payments for the clients with their partners and to move them closer to the canters of business activity, and also it is often used in different settlement schemes with payment guarantee. The domiciliation account is a bank account and it is inaccessible for charging by the tax inspection. Providing bills of exchange with means possibly at the expense of the credit assets received at the bank.

Collection of the bills of the clients by the bank permits the clients to simplify considerably the transfer of the bills to the partners in distant regions and to get rid of complicated specific work of presentation and if necessary – protest bills to receive payments by them.

Bills holding is carried out by the bank for the clients convenience with aim of their safety and in settlement schemes to ensure the execution of the contract by the parties.

Purchase, sale, exchange of bills is carried out on behalf and at the expense of the clients on a commission basis.

Organization of payments with bills of exchange is carried out by the bank specialists on an individual basis for each client on the ground of the analysis of the client’s financial flow considering specific character of the activity and the needs.

Crediting on security of bills of exchange is carried out by imputed market value. The use of this operation in the settlement schemes permits the clients to solve many current issues of production provision activities. The correlation between the amount of the guarantee and the credit is defined in accordance with the current legislation.

Consulting services of bills circulation are rendered by the specialists on a negotiable basis.

Operations with the bills of Pension fund of Ukraine. OJSC "Megabank" is an empowered bank for the issuance of bills on debt to the Pension fund of Ukraine:

• preparation of the documents for debt registration of the payments to the Pension fund of Ukraine;
• participation in trading, concerning buying-out the bills of the Pension fund of Ukraine;
• buying-out the bills of economic agents issued to recover debts of the payments to the Pension fund of Ukraine.

Operations with bills of internal state loan to recover overdue budget debt of VAT

OJSC "Megabank" as a keeper of securities signed the Depositary contract with the National bank of Ukraine of the service of state securities, namely the bills of internal state loan to recover overdue budget debt of the value added tax:

• securities account opening and servicing, keeping bills of internal state loan at the account to recover overdue budget debt of the value added tax;
• buying-out bills;
• crediting on security of bills.

Organization of securities issue and placement

1. Financial adviser services:

• elaboration and preparation of securities issue prospectus, estimation of the amount and structure of the issue;
• elaboration and preparation of investment memorandum;
• issue prospectus registration at the State committee of securities and stock market;
• preparation of the report on securities placement.

2. Underwriting services:

• elaboration and conduction of advertising campaign;
• securities listing at stock exchange and after-market trading systems;
• initial securities placement among the investors;
• support of the secondary market (quoting at stock and after-markets);

3. Payment agent services:

• payment of coupon yield (dividends);
• redemption of term securities.

30 Artyoma Street,
61002, Kharkiv
Main Department of Securities and Share Market
tel. (057) 714-33-62; fax.: (057) 714-06-12