Attracting individual investors to the stock market of Ukraine: technologies and tools

Abstract

The author discovered that individual (retail or mass) investors are becoming increasingly significant participants in world financial markets due to globalisation, simplification of cross-border movement of capital, technological measures to ensure direct access to trades, growth of savings and financial awareness of the population in most countries of the world, reduction of tariffs and transaction costs, expansion of the range of liquid financial instruments, and strengthening of information transparency of capital markets. It was established that in Ukraine, despite certain positive developments, regarding the activation of public investments in government bonds and the gradual movement towards the application of the technological experience of developed markets, many problems make it challenging to attract individual investors to the stock market and increase their confidence in the market tools. The paper states that certain problems (in particular, limited financial resources or low financial literacy of the population) are systemic and can be eliminated only with the general development of the national economy and capital markets. The need to reduce the financial and regulatory burden on issuers and financial intermediaries is well-founded since the supervision of non-public issuers only scatters the resources of the state and market participants, increases transaction costs, and does not provide real incentives for the development of the non-state securities market. The author emphasises the need to eliminate Ukraine’s significant lag behind developed capital markets regarding settlement infrastructure development and simplifying operations for individual investors. Considering the practice of tax relief for the investment income of individuals from transactions with state securities, the paper proposes the feasibility of introducing similar benefits for investors in securities of issuers that have been made public.