Institutional framework for the criminal law protection of capital markets in Ukraine: current state and prospects for reform

Abstract

The article examines the institutional aspects of the criminal law protection of capital markets in Ukraine in the context of European integration processes and the implementation of European Union legal standards. It is established that the Ukrainian model of combating abuses in organised capital markets generally follows the European regulatory architecture, which is based on a combination of administrative and criminal law prohibitions regarding market manipulation, unlawful use of inside information, and other forms of unfair conduct by market participants. At the same time, the effectiveness of criminal law protection remains limited due to the fragmented nature of legislative amendments, the lack of proper coherence between criminal law provisions and specialised regulatory legislation, as well as the insufficient institutional capacity of bodies responsible for supervision and prevention of market abuse. The evolution of Ukrainian capital market legislation since independence is analysed, and key stages in the formation of the regulatory framework are identified, including the impact of Laws No 738-IX and No 3585-IX on the content of Articles 222¹ and 232¹ of the Criminal Code of Ukraine. It is substantiated that the blanket nature of criminal law provisions is not a deficiency in itself; however, when combined with instability and legal uncertainty in sector-specific legislation, it creates risks of violating the principle of nullum crimen, nulla poena sine lege certa (“no punishment without a precise law”). Particular attention is paid to the issues related to the legal status of the capital market regulator, as well as to the shortage of specialised forensic expertise in criminal proceedings concerning market abuse. It is argued that improving the effectiveness of criminal law protection of capital markets in Ukraine requires комплексні solutions, including systematic legislative activity based on the principles of the Law of Ukraine “On Law-Making Activity”, stabilisation and harmonisation of sector-specific legislation, improvement of the institutional model of the regulator, and the development of specialised expert and professional law enforcement infrastructure in accordance with EU standards. Directions for enhancing the institutional component of criminal law protection are proposed.