The UNBA cautioned against extending securitization regulations to all non-business entities

Amendments to the Civil Code related to the launch of securitization will affect not only specialized financing platforms but also all non-business entities: public associations, charitable organizations, and professional and creative unions. However, they do not create a new legal mechanism.

This was noted by the UNBA Committee on civil law and procedure following an analysis of Draft Law No. 15175 of April 13, 2026 «On amendments to the Civil Code of Ukraine regarding the regulation of legal relations in the conduct of securitization and the issuance of covered bonds», which was adopted by the Verkhovna Rada as a basis.

The draft law accompanies Law No. 4985-IX dated September 16, 2026, «On securitization and covered bonds» (adopted on the basis of Draft No. 15172). The authors attribute the need for these changes to the requirement to align the Civil Code with the new rules on securitization and the issuance of covered bonds. These rules are being introduced to fulfill obligations to harmonize Ukrainian legislation with EU law.

The draft law itself effectively concerns a single provision. It is proposed to amend Part 2 of Article 85 (Non-Commercial Associations) of the Civil Code by adding a reference to the duties of officers of non-commercial associations, which will be defined in their founding documents. In addition, it is proposed to supplement this part with a provision stating that the specifics of the liability of officers of a non-commercial partnership for losses and damages caused by a breach of their duties to the respective partnership and/or its creditors shall be established by law.

The UNBA noted that the proposed provision goes beyond the stated objective. It was intended to apply to specialized financing platforms (SFPs), i.e., new participants in the securitization market. However, Article 85 of the Civil Code regulates the activities of non-commercial associations in general, and the draft does not contain a provision that would limit the scope of the amendments to SFPs. Consequently, the new provisions will also apply to other organizational and legal forms of non-business associations: public associations, charitable organizations, and professional and creative unions. According to the advocates, such a broad scope is not justified by the subject matter of the bill.

Another concern relates to duplication. Part 2 of Article 85 of the Civil Code already refers to a company’s founding documents and civil legislation regarding corporate governance. Article 99-1 of the Civil Code establishes the duties of officers toward the company and provides for their liability for damages caused to it. Therefore, the UNBA notes, the reference to the duties of officers does not create a separate mechanism for SPFs and duplicates existing legal regulations.

The advocates also emphasized that the concept of «creditors» requires a clear definition. The phrase “creditors of a non-business entity” does not specify exactly which persons are meant, for which violations they may seek compensation, or how their claims relate to an officer’s liability to the company. In the area of securitization, a distinction must be made between SPF creditors and holders of securitization securities or covered bonds. Furthermore, Article 9 of Law No. 4985-IX already establishes the duties and liability of SPF officers. Part 2 of that article explicitly provides for liability to the SPF and to the holders of the relevant securities or covered bonds. Thus, the general reference to all creditors in Article 85 of the Civil Code is broader than the specific regulation.

Since the proposed amendments do not establish new legal mechanisms, the UNBA considers their adoption to be inappropriate. At the same time, if it is decided to amend Article 85 of the Civil Code, the UNBA proposes to revise paragraph 3 of Part 2 of this article. This revision limits the scope of the provision to only SPF officers and aligns the terminology with Article 9 of Law No. 4985-IX: «The specifics of the liability of officials of a specialized financing platform for losses and damages caused to such a platform and to the holders of the relevant securitization securities or covered bonds by their wrongful decisions, actions, or inaction shall be determined by law».

The UNBA’s comments and proposals have been submitted to the Verkhovna Rada Committee on legal policy.