legislative basis for the functioning of the
institutional structure of the financial services
market is also being gradually updated. The
requirements for the functioning of the
foundations of consumer financial services are
changing. In that way, in the research process,
it`s necessary to ascertain which financial
intermediaries will have the right to provide
financial services to individuals as consumers
and specify the types of such services and the
requirements to which these entities must
respond. Such research will allow analyzing the
expedience of relevant legislative changes in
Ukraine, incorporating the positive foreign
experience in this area and formulating a
generalized characterization of financial
intermediaries as providers of consumer financial
services.
Subjects of the right to carry out financial
services operations are defined by Article 5 of the
Law of Ukraine «On Financial Services and State
Regulation of Financial Services Markets»
(Law No. 2664-III, 2001). Financial services are
provided by financial institutions, as well as, if it
is expressly provided by law, by natural persons
- entrepreneurs. The possibility and procedure for
providing certain financial services by legal
entities that are not financial institutions by their
legal status are determined by laws and
regulations of state bodies that regulate the
activities of financial institutions and financial
services markets, issued within their competence.
Instead, in Art. 1 of the Law of Ukraine «On
Financial Services and Financial Companies»
(Law No. 1953-IX, 2021), the approach to
determining the requirements for such entities
has been changed and the provider of financial
services is named a financial institution, and in
cases expressly defined by special by law -
another legal entity or a branch of a foreign legal
entity that has the right to provide financial
services in accordance with this Law and special
laws. At the same time, natural persons and
natural persons - entrepreneurs, along with legal
entities, can provide accompanying (auxiliary
and intermediary) services.
In Art. 1 of the Law of Ukraine «On Financial
Services and Financial Companies»
(Law No. 1953-IX, 2021) proposes the definition
of a financial institution as a legal entity, the
purpose of which is to provide financial services,
which, in accordance with the law, provides one
or several financial services based on the relevant
license issued by the regulator. Providers of
accompanying services who do not also provide
financial services at the same time, as well as
other persons who received a license to provide
financial services without acquiring the status of
a financial institution, are not financial
institutions. Therefore, according to the
functional purpose, such participants of the
financial services market are more clearly
divided as providers of financial and
accompanying services. At the same time, the
issue of using legal terminology remains
debatable. Article 83 of the Civil Code of
Ukraine (Code No. 435-IV, 2003) refers to any
legal entity as an organization, and distinguishes
a partnership and an institution as organizational
and legal forms of legal entities under private
law. That is, all legal entities are organizations,
but some of them can be created in the form of
companies, others - institutions. Therefore, the
term "institution", guided by the norms of the
Civil Code of Ukraine, should also be used in
other legislative acts to denote the organizational
and legal form of a legal entity. Therefore, for
financial organizations, only an institution
should act as an organizational and legal form in
accordance with the above legislative provisions.
Financial institutions include, in particular,
banks, credit unions, pawnshops, leasing
companies, insurance companies, and others.
The largest group among them are banks that are
created in the form of a joint-stock company or a
cooperative bank. Also, insurance companies,
pawnshops, and financial companies are business
associations, not institutions. In addition, the
very definition of the concept of an institution as
an organization created by one or more persons
(founders) who do not participate in its
management, by combining (separating) their
property to achieve the goal determined by the
founders, at the expense of this property, does not
comply with the principles of functioning of the
specified legal entities engaged in financial
activities. Borysov V. I. (2016) notes that there
are significant differences between the types of
financial institutions that are created only in the
organizational and legal form established by
special legislation, and which can be both non-
entrepreneurial and entrepreneurial, public and
private legal entities, do not provide an
opportunity to recognize the institution as an
organizational and legal form of legal entities -
participants in the financial services market. In
order to avoid inaccuracies in the application of
legal terminology, it would be more correct to
call legal entities engaged in professional
activities related to the circulation of financial
assets financial organizations, rather than
institutions. Therefore, entities providing
financial services (banks, insurance companies,
financial companies, etc.) by their legal status are
financial organizations under private law, and
entities such as the National Bank of Ukraine, the