Fiduciary management of assets аnd investment-driven development in Ukraine

Abstract

The paper is establishing a scientific rationale for the promising outlook for fiduciary management of assets in investment-driven development realm in Ukraine. In the paper much attention directed to civil regulatory device mechanism concerning receiving of residential space into ownership by fund’s for building financing trusters and the relevant system of investment activity, actual  problems of  balancing the legally protected interests of investors and other persons engaged in investment activity. Existing doctrines, civil regulation and judicial opinions concerning the research of promising outlook for Ukraine of escrow accounts are concluding. The paper  starts  by the concepts of investments and investment relations in residential construction under fund for building financing in aspect of economic and legal nature and then considers essence of legal investment relations respectively. Structural analysis of legal investment relations in residential construction under fund for building  financing  was summarized and concept of investment liability was characterized. Existing regulation in force and summary of Ukrainian civil and economic courts ruling about misuse of resources of the fund for building financing are concluding. Suggestions concerning legislative changes including introduction of escrow accounts are defining. In the paper the conclusion is drawn that in Ukraine it is time to apply in domain of investment housing construction under the fund for building financing  a facility based on the escrow account, which is widely spread in European and American new home loans practice and project financing as a means of securing an interest and risk reduction in aspect of performance of counter-execution. In keeping with the conception of an escrow account as specific bank account, which is managed by a third party in accordance with happening of trigger events ascertained by contract, in the article it is concluding that there has to be a change to the Law of Ukraine “On Financial and Credit Mechanisms and Property Management during House Building and Real Estate Operations” setting the escrow account as compulsory for a fund for building financing.  The suggestions aimed at prevention of misuse of resources of the fund for building financing is elaborating. Suggestions concerning legislative changes to boost investment activity in Ukraine including application of escrow accounts are defining.