Ukraine has drafted legislation to overhaul its investment fund market and align it with European Union standards, seeking to strengthen investor protection and make it easier for Ukrainian and European funds to operate across borders, reported Ukraine Business News.

The bill, titled “On Investment Funds”, was developed by the National Securities and Stock Market Commission in cooperation with the Verkhovna Rada’s Finance Committee and the World Bank. The document has been submitted to parliament for registration.

The proposed legislation would introduce modern requirements for fund operations, asset management, transparency and disclosure, with the aim of attracting more private capital into Ukraine’s economy.

Once the law is adopted and a transition period has ended, the framework would establish two main categories of investment vehicles: public investment funds operating under the EU’s Undertakings for Collective Investment in Transferable Securities (UCITS) standards, and alternative investment funds (AIFs).

The draft also seeks to strengthen safeguards for investors by introducing additional requirements for asset management and valuation, improving disclosure and transparency, and assigning custodial institutions responsibility for safeguarding fund assets and maintaining records.

It would establish a legal basis for a broader range of investment vehicles, including venture capital funds, real estate funds, social entrepreneurship funds and long-term investment funds.

The reforms are intended to bring Ukraine’s collective investment sector closer to EU regulatory practices and broaden access to financing for businesses and projects. They would also create conditions for Ukrainian public investment funds to enter European markets and for EU-based funds to invest in Ukraine.