Assessment of Warehouse Receipt System

Item Description:

The technical cooperation (“TC”) project is taking place under the European Bank for Reconstruction and Development (the “EBRD” or the “Bank”) Initiative on Local Currency and Capital Markets Development (the “LC2”). This Bank-wide strategic Initiative aims to identify and support sequenced reforms and policies in the economies where the EBRD invests that contribute to the development of local currency and local capital markets. One of the ways that the Bank supports this role is in producing focused studies and providing assistance to develop the local capital market infrastructure, legal and regulatory framework, based on international standards and best practices.

The “Comprehensive Program of Ukraine Financial Sector Development until 2020” as approved by the National Bank of Ukraine (the “NBU”), the National Securities and Stock Market Commission (the “NSSMC”) and the Financial Service Regulator (the “FSR”) stresses the importance of developing the financial sector infrastructure, including improving the functioning of the commodity stock market by ensuring transparent price formation, developing efficient supervision of the above market and protecting the market players.

Currently, the NSSMC, as the securities market regulator, focuses on developing the exchange-traded commodity market based on international standards and best practices. Among the underlying instruments to be considered are warehouse receipts. A well-designed warehouse receipt system (the “WRS”) can provide various benefits for all parties involved, including increasing trade standards and improving price transparency and market access. Currently, the Ukrainian WRS, which covers only the agricultural sector, has major limitations and does not operate to the required extent to have a meaningful impact on market participants and their financing and business activities.

The existing diagnostics and recommendations from previous TC projects on the Ukrainian WRS outlined the gaps and shortfalls of the regulatory system in place for warehouse receipts. The 2018 report on the “Assessment of Warehouse Receipt System” highlighted the need to create an electronic warehouse receipt trading system (“eWRS”) and confirmed that, among other issues, the inadequate certification and enforcement regime for commodity warehouses, the lack of financial support structures such as a guarantee or indemnity fund and protection of the rights of holders of warehouse receipts, and the confusion resulting from two overlapping legal regimes governing the general WRS and specific WRS for grain significantly hamper the proper development of the WRS. The EBRD will make the 2018 report on the “Assessment of Warehouse Receipt System” available to interested consultants upon written request.

In order to overcome the problems described above, the NSSMC has requested this TC project to analyse the existing legal and regulatory framework and propose and draft amendments to the existing laws and regulations and new provisions.

Assignment Description:

The overall objective of the project is to support efforts to develop the capital and commodity markets in Ukraine and to align them with international and EU standards to the appropriate degree.

The specific objective of the assignment is to (1) analyse the existing legal and regulatory framework for warehouse receipts; (2) prepare the Concept Paper containing detailed recommendations for the legal and regulatory reform; and (3) draft the legal and regulatory framework for WRS development including the creation of an electronic warehouse receipt system and amendments to the existing laws/regulations and new provisions.

The EBRD intends to select and contract a consulting company (the “Consultant”) to carry out the Assignment. The selected Consultant is expected to provide the following services:

Activity 1: Analyse the existing Ukrainian legal and regulatory framework for WRS and prepare a Concept Paper containing comprehensive recommendations for the legal and regulatory reform
Activity 2: Draft the legal and regulatory framework for WRS including amendments to the existing laws and regulations and new provisions.

The full Terms of Reference (the “ToR”) of the Assignment can be found here.

Consultant Selection Procedure: Single-stage open competitive selection. Interested firms are invited to submit a Technical and Financial Proposal.

Assignment Start Date and Duration: The Assignment is expected to start in January 2019 and has an estimated overall duration of 12 months.

Cost Estimate for the Assignment: Up to €130,000 (exclusive of VAT).

The Consultant must determine whether any VAT would be chargeable on the services and the basis for that determination, without taking into consideration the special status of the Bank as an international financial institution, and state this to the Bank in their response to the Invitation for Expressions of Interest. To the extent that a Consultant incurs input VAT on goods and services purchased in connection with the provision of services (for example, VAT on an airline ticket) which is not otherwise recoverable by the Consultant from the local tax authority, the gross cost to the Consultant of such expenses shall be treated as a reimbursable expense.

Funding Source: It is expected that the Assignment will be funded by the EBRD’s Shareholder Special Fund. Please note that selection and contracting will be subject to the availability of funding.

Eligibility: There are no eligibility restrictions based on the consultant’s country of origin.

Consultant Profile: The Consultant will be a law firm which specialises in legislation and regulation for commodity markets and for capital markets. The Consultant must have a proven record of working with government authorities on similar consulting assignments and experience in supporting governments in legal and regulatory reform. In-depth knowledge of the commodity market and warehouse receipt system as well as understanding of new legal and regulatory developments as proven in previous assignments is required.
The Consultant has to propose a team of highly specialised legal experts who will carry out the assignment. The expertise provided should cover all areas as defined in the scope of work of the ToR and the experts must have a proven deep knowledge of the Ukrainian legal and regulatory system.
The Consultant’s expert team is expected to include as a minimum the following key experts (the “Key Experts”):
a. The Consultant Team Leader
– Preferably more than 8 years of legal and regulatory experience in the field of commodity and capital markets laws and regulations, preferably covering warehouse receipt system;
– Preferably more than 5 years of project management experience including acting as team leader on similar assignments;
– Excellent knowledge of international standards and best practice related to/impacting the warehouse receipt system as mentioned in Section 3.- Scope of Services;
– Experience in supporting governments in legal and regulatory reform projects;
– Excellent communication, analytical, report writing and presentation skills;
– Excellent proficiency in written and spoken English.
b. Pool of Legal and Regulatory Experts
– Preferably 5 years of professional experience as a legal and regulatory expert with focus on commodity and capital market legislation;
– Acted as legal and regulatory expert in at least one capital market development project.
– Proven experience in drafting laws and regulations.
– Excellent knowledge of international standards and best practices related to warehouse receipt system.
– Knowledge of the international and especially Ukrainian legal and regulatory environment.
– Proficiency in written and spoken English and Ukrainian language.
It is important that at least one expert has in-depth knowledge of the Ukrainian capital market and its laws and regulations.
Submission requirements: The Consultants are now invited to submit a completed Technical and Financial Proposal as per the standard templates and instructions available at this link http://www.ebrd.com/documents/procurement/one-stage-rfp.docx. Interested Consultants should make themselves familiar with these Standard Templates, Standard Instructions and Conditions of Contract in preparation of their proposals.

1. The Technical Proposal shall be submitted in English electronically via eSelection not later than the Closing Date, as one single PDF file. The technical proposal should not exceed 20 pages excluding the Declaration Form and CVs (Form 1 – TP 1 and Form 1 – TP 6).

2. The Financial Proposal (Form 2 – FP 1 and FP2) shall be submitted in English separately by email only to the Bank Contact Person. Consultants are reminded of the requirement to ensure the confidentiality of the Financial Proposals. A Technical Proposal that contains elements of a financial proposal shall be declared non-responsive.

Bank Contact Person:
Larissa Gosling
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
Tel: + 44 20 7338 6338
e-mail: goslingl@ebrd.com

Technical submissions should be sent through eSelection and NOT to this email address.

Financial Proposal should be sent to this email address and NOT through eselection.
Deadline to Submit Clarification Questions: Via e-mail to the Bank Contact Person by 06/12/2018

Selection Method and Evaluation Criteria:

1. Technical Proposal Evaluation Criteria
(a) Firm’s previous project experience in similar assignments preferably in Ukraine (30 per cent)
(b) Quality of the methodology proposed for the Assignment (30 per cent)
(c) CVs of the Key Experts (40 per cent), with 20 per cent allocated to the team leader and 20 per cent allocated to the other team members.
The minimum technical score (St) required to pass is 70 per cent.

2. Opening of Financial Proposals

After the technical evaluation has been completed, only the submissions which score 70 per cent or above of the total marks available for the technical criteria will be eligible to have their financial proposals opened.

3. Combined Technical and Financial Evaluation

The lowest evaluated Financial Proposal (Fm) is given the maximum financial score (Sf) of 100. The formula for determining the financial scores (Sf) of all other Proposals is calculated as follows:

Sf = 100 x Fm/ F, in which “Sf” is the financial score, “Fm” is the lowest evaluated Financial Proposal, and “F” the price of the Proposal under consideration.

Proposals are then ranked according to their combined technical (St) and financial (Sf) scores using the weights (T = 80; F = 20) T + F = 100 as follows: S = St x T% + Sf x F%.

Important Notes:
1. The proposal validity period is 120 days from the deadline date for the receipt of submissions. During this period, the Consultant shall maintain its original Proposal without any change, including the availability of the Experts, the proposed rates and the total price.

2. The selection will be made from the Proposals received in response to this notification only, on the basis of the submission requirements and selection criteria set out in this Procurement Notice. The highest-ranked Consultant will be selected and invited to negotiate the contract, subject to availability of funding.

3. Any updates of and clarifications on this procurement notice shall be announced as updates on this notice, without any other notification. In the event of changes consultants will need to download the updated versions. Consultants are required to periodically check the notice for updates. Failure to take the updates into account while preparing the Proposal may result in disqualification or penalties to the scores in the evaluation.