The system of bidding and auctions. What is a Dutch auction Which of the following features does a Dutch auction have?

23 Jul 2008

I stumbled across the Internet by accident, maybe someone else will be interested ...

The Dutch in Europe have always been considered the most cunning hucksters. Being
once one of the great maritime powers, they brought from their
overseas colonies a bunch of all sorts of exotic junk and sold at
auctions. But with auctions, there is always the possibility that
buyers will collude and buy at a low price. And then the Dutch
figured out a trick. Unlike the traditional system, the product owner
exposes it at an initially inflated price, and then gradually reduces
her, keeping in mind a certain minimum, after which he will simply remove the lot
from auctions. Whoever shouts first: "I'll take it!", He bought it. No one knows,
what price the seller considers the minimum acceptable for himself, as well as
what price competitors are willing to buy, so the selling price in Dutch
auction has always been higher than in traditional auctions.

There are no obstacles to organize such auctions even now. By the way, I could not find normal literature at auctions, competitions, tenders. Almost everything that is dedicated to the state. procurement.

If everything has collapsed and there is nothing to store, keep calm.

23 Jul 2008

Here's what I have on this topic

REGULATIONS on the procedure for the sale of property **** (Lot No. 2) at open sales in the form of an auction
I. General provisions.
1.1. This Regulation determines the procedure for conducting the 26.12.2005. at 13:00 hrs. open bidding in the form of an auction according to the Dutch system (for increasing or decreasing the starting price to the cut-off price, but not lower than the cut-off price) with an offer at a price in an open form (hereinafter referred to as the Auction) for the sale of property **** (Lot No. 2) , namely, movable property in the amount of 76 items according to the list (hereinafter referred to as the Property), conditions for participation in the auction, the procedure for determining the winner.
1.2. The organizer of the auction is the bankruptcy trustee **** Yakimidi L.R.
1.3. The terms, procedure and conditions for the sale of property **** are approved by the meeting of creditors at the proposal of the bankruptcy trustee ****.
1.4. The starting selling price of the Property is determined based on the results of an independent appraisal. The cut-off price is determined on the basis of proposals from bidders for the acquisition of PROPERTY. The size of the auction step, the size of the deposit, and the amount of the fee for participation in the auction are determined by the organizer of the auction.
II. Conditions for participation in the auctions.
2.1. Individuals and legal entities (hereinafter referred to as the Applicants) are allowed to participate in the auction, recognized in accordance with the legislation of the Russian Federation as buyers, having the right to purchase the Property, who submitted an application in a timely manner in accordance with the conditions specified in the notice of the auction published in Rossiyskaya Gazeta dated November 26 .2005 No. 267 (3936). The obligation to prove their right to participate in the auction lies with the applicant.
2.2. To participate in the auction, the bidders shall submit to the Organizer of the auction the following documents within the period specified in the notice of the auction (duly certified copies: by a notary public or by the body that issued them):
- for individuals: passport; certificate of tax registration; the consent of the spouse (s) to conclude a contract of sale; payment documents confirming the deposit and payment for participation in the auction; representative of the applicant - a duly executed power of attorney;
- for legal entities: constituent documents; certificate of entry in the unified state register of legal entities; certificate of tax registration; certificate of the State Statistics Committee of the Russian Federation on the assignment of codes; certificate of state registration; the decision of the relevant governing body of the applicant, allowing participation in the auction and the acquisition of the Property; payment documents confirming the deposit and payment for participation in the auction; representative of the applicant - a duly executed power of attorney;
other documents - only in cases expressly provided for by the legislation of the Russian Federation for the acquisition of Property.
2.3. The deposit and payment for participation in the auction are considered received by the organizer of the auction from the moment they are credited to the account ****.
2.4. The Bidder's application shall be accompanied by a list of submitted documents signed by the Bidder in 2 copies, one of which remains with the Bidder, the other - with the Auction Organizer.
2.5. The organizer of the auction does not accept applications with the following documents attached to them:
- received after the deadline for accepting bids specified in the notice of bidding;
- filed by a person not authorized to carry out such actions.
2.6. A note on the refusal to accept the application with an indication of the reason is made by the Organizer of the auction on the inventory of documents submitted by the applicant, one copy of which remains with the Organizer of the auction. The bid and documents of the bidder, not accepted by the Bid Organizer, are returned to the bidder together with the list of documents (with a mark of refusal to accept) by handing them over to the bidder against receipt or by registered mail with return receipt.
2.7. The applicant is not allowed to participate in the auction if:
- the documents submitted by the applicant do not confirm the right of the applicant to be a buyer in accordance with the legislation of the Russian Federation;
- the applicant has not submitted all the documents according to the list specified in these Regulations;
- the copies of documents submitted by the applicant are not properly certified;
- the documents submitted by the applicant do not comply with the requirements of the legislation of the Russian Federation;
- the receipt of the amount of the deposit and (or) the fee for participation in the auction on the account **** in due time was not confirmed.
2.8. Until the bidder is recognized as a bidder, he has the right to withdraw the registered bid by written notice to the Organizer of the bidding. In this case, the deposit received from the applicant is subject to return within 5 banking days from the date of receipt by the Organizer of the auction of the notification of the withdrawal of the application, while the participation fee for participation in the auction is not returned to the applicant.
2.9. If the Bid Organizer accepts the Bidder's bid, the Bid and the documents attached to it are sealed by the Bidder in the presence of the Bid Organizer in an envelope, which is sealed with the Bidder's signature.
2.10. The auction organizer ensures the safety of the bids submitted by the bidders with the documents attached to them, as well as the confidentiality of information about the number of bidders, about the bidders who submitted bids, about the content of the documents submitted by them until they are announced at a meeting of the auction commission.
III. Preparation for the auction.
3.1. Organizer of the auction in accordance with the legislation of the Russian Federation and these Regulations:
3.1.1. Organizes the preparation and publishes the notice of tenders.
3.1.2. Accepts applications from applicants and keeps records of them as they arrive in the register for receiving applications, indicating the date and time of its receipt.
3.1.3. Concludes with applicants an agreement on a deposit.
3.1.4. Forms the auction commission, determines its tasks and powers, approves its personal composition, appoints the chairman of the auction commission.
3.1.5. Transfers to the auction commission on the day of bidding the received bids with the documents attached to them.

23 Jul 2008

3.1.6. Submits to the Auction Commission information on the deposits received on account **** and the fee for participation in the auction, indicating the name of the applicant who made the deposit, the amount of the deposit and the date of its receipt.
3.1.7. Approves all documents drawn up by the auction commission during the auction.
3.1.8. Concludes with the winner of the auction a contract for the sale of the Property.
3.1.9. Makes settlements with applicants, participants and the winner of the auction.
3.1.10. Ensures the transfer of the Property to the winning bidder.
3.1.11. Carries out the transfer and cancellation of auctions.
3.2. From the moment the bids are accepted, the Organizer of the auction provides each bidder with the opportunity to familiarize himself with these Regulations, the bid, the deposit agreement, as well as other information he has about the Property being sold on the basis of a written application from the bidder.
3.3. The organizer of the auction, together with the auction commission, considers the received applications with the documents attached to them and determines them for compliance with the requirements of the legislation of the Russian Federation and these Regulations on the day of the auction.
3.4. The tasks of the auction commission in the course of the auction are:
- verification of the conformity of the submitted documents of applicants with the requirements of the legislation and notification of tenders;
- direct bidding between all participants;
- Identification of the winner of the auction and control over compliance with the established procedure for conducting the auction.
3.5. Based on the results of consideration of the applicants' documents, the auction organizer makes a decision on the admission of applicants to participation in the auction or refusal to admit them to participation in the auction.
3.6. Based on the results of consideration of the applicants' documents, the auction organizer has the right to make the following decisions:
- on the transfer of trading;
- on the refusal to conduct bidding.
3.7. In the cases provided for in clause 2.6. of these Regulations, the Organizer of the auction decides to refuse the applicant to participate in the auction, while the protocol of admission to participation in the auction makes a note on the reason for the refusal of the applicant to participate in the auction.
3.8. The Bidder acquires the status of a participant in the auction from the moment the Organizer of the auction signs the protocol on admission to participate in the auction.
3.9. Meetings of the auction commission are held when more than half of its members from the payroll are present. The course of the auction and the results of the auction are documented in a protocol signed by the chairman and members of the auction commission.
3.10. The final protocol of the auction commission, which records the results of the auction, is signed by all members of the commission who agree with decisions taken. Decisions are considered adopted if they are signed by a majority of the members of the commission from the list of the commission.
3.11. Members of the commission who do not agree with the decisions made have the right to justify their position in writing, this document is attached to the protocol following the results of the auction.

IV. The procedure for conducting auctions.
4.1. Bidding for participation in which no applications were submitted, or none of the applicants was recognized as a participant, or in which only one participant took part, are recognized as failed.
4.2. Bidding is conducted by the organizer of the auction, acting as an auctioneer, in the following order:
4.2.1. Only one authorized representative of the bidder has the right to participate in the auction, the presence of other persons is allowed if they are registered in the protocol of those present. During the auction, the auctioneer has the right to make video and photo shooting, which is noted in the registration protocol of participants.
4.2.2. Auctioneer before the start of the auction announces the following data:
- the name of the property sold at auction;
- names of applicants who submitted applications for the auction;
- names of participants admitted to participate in the auction;
- the starting price, the cut-off price, the size of the deposit, the step and procedure for changing the price;
- the procedure for conducting auctions.
4.2.3. In the course of the auction, a record of the auction is kept, which is signed by all members of the auction commission and approved by the auctioneer.
4.2.4. The auctioneer starts the auction from the starting price of the sale of the Property.
4.2.5. If the auctioneer names the starting price and no buyers for the Property at the starting price are found, the auctioneer lowers the starting price by one bidding step. In this case, the winner is the participant who was the first to offer the highest price for the Property, but not lower than the cut-off price, provided that the other participants did not raise their cards to the price offered by the auctioneer.
4.2.6. If the auctioneer, lowering the starting price for the next step of the auction, reaches the cut-off price, and none of the participants raises the card, then the auction is considered invalid, the property is removed from the auction.
4.2.7. If the auctioneer names the starting price and more than one buyer (the participant who raised the card) is revealed, or if the auctioneer names the offer price - the starting price minus the bidding step, and more than one buyer (the participant who raised the card) is revealed, then the auction in these cases is carried out by raising the price offers per step bidding.
4.2.8. When bidding by raising the price, further bidding starts from the offer price at which more than one buyer has been identified, and only persons who have expressed their consent to this price named by the auctioneer participate in the bidding.
4.2.9. The auctioneer names the price of the Property, increasing it by one bidding step, the participants express their consent to the price proposed by the auctioneer by raising the cards. A participant who has not expressed his consent (did not raise his card) to the price offered by the auctioneer shall not participate in the further auction. The auctioneer names the offer price until the moment when only one participant agrees with the price offered by the auctioneer, or until the moment when none of the participants raises a card about his agreement with the proposed price.
4.2.10. In the event that the auctioneer announces the next step of the auction and none of the participants raises the card of his agreement with the proposed price, the winner is the participant who first raised the card to the previous proposed price announced by the auctioneer.
4.3. The winner of the auction is the person who offered the highest price for the property and, accordingly, higher than the price offered by other participants.
4.4. The auction is considered completed and the sale price of the property is set after the third blow of the hammer, which means that the participants accept the last price offered by the auctioneer.
4.5. The winner of the auction is determined by the auctioneer together with the auction commission. In case of disagreement between the members of the auction commission, the issue of determining the winner is decided by the auctioneer.
4.6. After the end of the auction, the auctioneer announces the end of the auction, the fact of the sale of the property, names its sale price and the card number of the winner of the auction.
4.7. The protocol on the results of the auction is drawn up in 2 copies, signed by the members of the auction commission and approved by the auctioneer on the day of the auction.
4.8. The protocol on the results of the auction from the moment of its approval by the auctioneer acquires legal force and is a document certifying the right of the winner to conclude a contract for the sale of the Property. Notification of the recognition of the bidder as the winner and one copy of the protocol on the results of the bidding are issued to the winner against receipt or, in case the participant refuses to receive the notification, they are sent by registered mail with a return receipt no later than 3 days from the date of approval of the protocol by the auctioneer.
4.9. After the end of the auction, the bidders and the auctioneer sign a certificate of completion based on the results of the auction.
4.10. The amounts of deposits made by applicants (except for the winner) are returned by the organizer of the auction by non-cash transfer within 5 banking days from the date of approval of the protocol following the results of the auction. The bidding fee is non-refundable.
V. Conclusion of the contract and the procedure for notifying participants of the results of the auction.
5.1. The winning bidder is obliged to conclude a sale and purchase agreement with **** not later than 5 working days from the date of approval of the protocol following the results of the auction.
5.2. Payment for the Property by the winner is made within 30 calendar days from the date of conclusion of the contract for the sale of the Property minus the deposit paid.
5.2.1. The fact of payment for the Property is confirmed by statements from the account **** on receipt Money in the amount and within the time specified in the contract of sale.
5.2.2. The deposit made by the winner on account **** is counted towards the payment for the acquired Property.
5.3. The transfer of the Property to the winning bidder and registration of the transfer of ownership rights are carried out in accordance with the procedure established by the legislation of the Russian Federation and the contract of sale after full payment for the Property.
5.4. The organizer of the auction notifies the participants of the results of the auction publicly on the day of the auction after the auction and the signing of the protocol on the results of the auction.
5.5. The notification of the results of the auction contains the following information:
- name and location of the sold Property;
- the initial and sale price of the Property, the name (name) of the winner of the auction.

1. What are Dutch auctions?

A Dutch auction is an auction model where the (initial) starting price of an asset is equal to its face value at the start of the auction. During the open trading session, at regular intervals, the price is automatically and step by step reduced by the auction step - 1%. Thus, during the day of trading, the price may drop from 100 to 20% of the face value.

2. How does the Dutch auction system work?

Each bidder can stop bidding at an acceptable price level by clicking the "buy" button. This completes the automatic incremental price reduction of the lot. Further, according to the rules of the "pilot project", which is being implemented in the Fund, other registered participants in the auction are given time to submit their closed price offer (sealed-bid), which must exceed the bid at which the price reduction stopped.

Period for submitting closed price offers will start at the same time, regardless of the time of the bet: from 16:15 to 16:55 and will last 10 minutes. For example, if a bid is made at 11:00 or 13:00, the closed bid submission period will still only start between 16:15 and 16:55.

Upon completion of the stage of submission of closed bids, all of them are disclosed and the participant who stopped the automatic step-by-step price reduction by placing a bid, receives the right, within a certain period of time (5 min.), to "Break" at least one step of the auction the largest closed price offer of the "rival" ” and offer your last price (“best and final”). Only under this condition will he be declared the winner.

Otherwise, the winner of the auction is the participant who offered the highest price for the lot at the stage of submitting closed bids.

If there are no price offers closed, then the winner is the participant who made a bid and stopped the automatic step-by-step price reduction.

(Section 7 of the Regulations)

3. Who can participate in Dutch auctions?

An individual with full legal capacity or a legal entity (resident or non-resident) represented by an authorized representative who has discovered an intention to participate in an electronic auction, paid a guarantee fee, completed the registration procedure for participation in an electronic auction, received the appropriate confirmation of registration and an individual code participant in accordance with the ETS Regulations.

Member electronic auction, the subject of sale on which there are rights of claim under loan agreements and collateral agreements, cannot be a user who is a borrower (debtor in relation to the bank) and / or a guarantor (property guarantor) under such loan agreements and / or collateral agreements.

(Clause 5.11 of Chapter 5 of Section V of the Regulation on the Withdrawal of an Insolvent Bank from the Market)

4. What are the main regulations governing the sale of assets at Dutch auctions?

Law of Ukraine "On the system of guaranteeing deposits of individuals".

The rules of operation of the electronic trading system for conducting an electronic auction, which consists of an automatic step-by-step reduction in the initial (starting) price of the lot, the stages of submitting closed bids and a bid for the sale of bank assets (property), are withdrawn from the market or liquidated.

Decision of the executive directorate of the FGVFL

Regulations on the organization of the sale of assets (property) of liquidated banks, approved by the decision of the Executive Directorate of the Fund dated March 24, 2016 No. 388.

Regulations on the Committee of the Deposit Guarantee Fund for individuals on the issues of consolidation and sale of assets, approved by the decision of the Executive Directorate of the Fund on July 05, 2017 No. 2837.

5. What assets will be sold at Dutch auctions?

At the first stage, as part of the implementation of the "pilot project", assets of banks will be offered for sale through Dutch auctions, the liquidation period of which ends within the next 6-9 months. These assets will be put up for sale immediately in pools, because in terms of pricing it makes no sense to sell them individually. After all, after each of them there were several cycles of individual trading, to which the market did not react. After holding the first auctions for the above categories of assets and studying the practical results of their implementation under the new model, other categories of assets will gradually be transferred to the new model while maintaining the current one.

The main assets traded on the model of "Dutch" auctions are the rights of claim on loans of individuals, secured by mortgages.

6. Who makes the decision to put a particular asset up for public auction?

Such a decision is made by the Fund (Executive Directorate or Committee)

The Committee implements its tasks for an asset (property), lot, pool of assets (property), the book value of which (which) is less than UAH 100 million and the initial price / sale price of which (which) is less than or equal to the book or estimated value (for rights of claim under credit agreements - in less or equal debt under such agreements (debt on the principal debt, accrued interest, as well as commissions stipulated by the agreement) or the estimated value).

(Section 1 of the Regulations on the Committee; subparagraph 5 of Chapter 5 of Section V of the Regulations on the Withdrawal of an Insolvent Bank from the Market (No. 2))

7. What are the differences between the Dutch auction and the traditional one?

The use of the Dutch auction will make it possible to optimize the rate of sale of assets of liquidated banks. In order for potential investors to have time to familiarize themselves with the assets, the Fund decided to revise the existing pre-sale terms for exposing assets.

During Dutch auctions, it takes 30 business days or more to familiarize the market with the lot. In addition, restrictions on the number of participants in the auction have been lifted. According to the new model, the auction will be considered completed if at least one participant takes part in it and makes a bid. At the same time, none of the potential buyers will know how many participants have registered for the auction in general. And it will be possible to join the auction even on the day of the auction after it starts.

8. Where can I find information about which lots are for sale and according to what system (classic auctions or Dutch)?

Information about the lot published on the website of the bank selling the asset, in the prozorro.sale/ system, on the Fund's website www.fg.gov.ua/ and on the information portal torgi.fg. gov.ua/. As well as on the web portals of the relevant trading platforms that have been accredited by the Fund.

9. How is the initial price of a lot determined?

The pricing ideology will be as follows: the starting price will be set at par, and during the auction it will gradually decrease to 20% (the minimum price is set by the decision of the executive directorate for each individual auction). The price will be reduced automatically and step by step during the working day. If the auction does not take place, certain assets - primarily large loans to corporate clients - by the decision of the Fund may be re-sold according to the above model (100% - 20%), but not more than twice.

If the asset has not been sold, it will be withdrawn from individual trading. In the future, it will be sold exclusively in pools, the starting price of which can be set at the level of the nominal value of the pool components or 20% (the minimum price of the pool components).

If the pool is not sold, its next starting price will be set at the level of the minimum price set in the previous unsuccessful auction and will again step by step and automatically decrease to 20% of the starting price. This procedure will be repeated until the pools are sold.

Example: 1st auction - the starting price of the lot is 100 thousand UAH. Due to the lack of bids, the price dropped to UAH 20,000, but the winner has not been determined, and the auction did not take place. The lot is put up for re-auction.

2nd auction. An asset that has not been sold before is put up for auction as part of a pool of assets and the starting price of this asset in the pool is UAH 20,000. (The total starting price of the pool is made up of the cost of the starting prices certain types assets is included in this pool).

(Subparagraph 3 paragraph 2 of the Regulations on the pilot project)

10. How can I get acquainted with the documents for a specific lot?

By signing a non-disclosure agreement, the bank grants the potential buyer the right to get acquainted with information constituting banking and commercial secrets. Familiarization with the information takes place in the data room of the bank.

11. How to get access to view documents of the Bank's asset in the virtual data room (VD)

(Section 5 of the Asset Disposal Regulations)

12. Is it possible to get acquainted with the asset purchase and sale agreement at the stage of the lot exposition?

You can familiarize yourself with the recommended form of the sale and purchase agreement by downloading it from the information portal of the Fund (http://torgi.fg.gov.ua/shabloni-dogovor-v.php) or contact the bank that sells the property that the potential buyer.

13. How long does it take to conclude a sale and purchase agreement for property purchased at an auction?

The Bank concludes a contract for the sale of an asset (property) not earlier than three business days and not later than 20 business days from the date of completion of open trading (auction) with the possibility of extending this period by decision of the Fund, in case the Fund receives a reasonable representation from the bank (the total period is not may exceed 42 business days).

(Clause 4 of section 7 of the Regulation on the sale of assets)

14. I took a loan from a bank and pay it according to the terms of my agreement. On what basis is the claim on my loan put up for auction?

The sale of the right to claim under a loan agreement takes place in pursuance of the requirements of Articles 48, 51 of the Law in compliance with the provisions of Articles 512, 514, 516 of the Civil Code of Ukraine. Regardless of whether the borrower repays the loan or not, the Bank may put the claims under the loan agreement up for auction for sale.

(Articles 512, 514, 516 of the Civil Code of Ukraine)

II. Detailed consideration of the "Dutch auction" mechanism

1. What is the Dutch auctions selling model for?

Unlike English auctions (the so-called English Forward), where participants gradually increase the price of their offer, Dutch auctions (Dutch auction) work with a price reduction. During the auction, the price automatically decreases until one of the participants stops this decrease. This means that he is ready to buy a lot for this amount.

The Dutch auction is not better or worse than other auction models. It is simply more efficient for a certain type of asset. First of all, to those for which it is difficult to determine the market price - this price is determined by the participants.

2. What are the main stages of a Dutch auction (an overview of the stages of the auction)?

a. preparatory stage

At this stage, the authorized person submits an asset sale plan to the Fund, the Fund's executive directorate or the Asset Sale Committee approves the decision to sell the bank's assets (property). The decision formalizes the main parameters for the sale of an asset.

b. exposition

Information about the asset is published on the information portal of the Fund http://torgi.fg.gov.ua/, http://www.fg.gov.ua/ as well as on the ProZorro.Sales portal and on the websites of accredited exchanges. Potential buyers get acquainted with the public passport of the asset. If desired, they can also get acquainted with detailed information about the selected asset containing commercial or banking secrets, having previously signed a non-disclosure agreement.

c.Trading session

The buyer registers for the auction: chooses a trading platform and pays a guarantee fee.

On the declared day, the trading session starts (from 9:30 to 10:00).

The first stage: automatic step-by-step price reduction. This stage lasts 6 hours. 45 min. and ends between 16:15 - 16:45. Any of the participants can make a price offer, after which the auction stops.

The period for submission of closed bids. At 16:15 - 16:45 the period of closed price offers begins, it lasts no more than 10 minutes. Participants offer their price, can not be less than the rate in effect at the time the auction was stopped. The participant who stopped the auction does not participate at this stage.

Bid submission period. From 16:25 to 17:00 closed price offers are disclosed, the stage lasts 5 minutes. Only the participant who stopped the auction during the first stage of the trading session participates. He may improve his quotation by submitting a quotation that must be at least 1% higher than the most closed quotation submitted during the previous stage.

The winner is automatically determined and the bidding protocol is generated. The protocol is signed within 3 working days and uploaded to the ProZorro.Sales system.

d. End of auction

The winner transfers the required amount for the acquired property (assets) to the bank details and signs the contract of sale. It should be noted that payment and signing of the contract of sale is carried out within 20 working days.

(Section 7 of the Regulations)

3. To what level can the price fall during the auction?

Automatic step-by-step price reduction from the initial to the sale price will occur within one day. In general, during the day of trading, the price may drop from 100 to 20% of the face value.

(Subparagraph 1 paragraph 2 of the Decision on the pilot project)

4. Will all assets be sold on the Dutch auction model from now on?

Tentatively, by the end of 2017 there will be a pilot project for the introduction of "Dutch auctions". First auction for new system took place on October 30, 2017 (two auctions for the sale of assets of Erde Bank OJSC (lots FG21EK01 (pool of assets) and FG21EK02 (individual lot for the sale of the right to claim under a loan agreement). The first auction for the "Dutch model" was recognized, did not take place.

The pilot project will sell:

Assets of banks whose liquidation period ends within the next few months;

Rights of claim on loans of individuals secured by mortgages of such banks: Delta, Nadra, Finance and Credit, Fido, VAB and other banks;

Rights of claim on loans of individuals not secured by mortgages, debts over UAH 3 million.

At the same time, loans for which the decision to sell was made earlier continue to be traded until the end of the corresponding trading cycles.

Mortgages from other banks are traded according to the old system (“English auctions”).

(First Dutch auction - https://prozorro.sale/auction/UA-EA-2017-10-09-000224-c)

5. What happens to the assets (property) that could not be sold at the first Dutch auction?

Pools will be formed from assets not sold at retail. The starting price of such pools is equal to the price of the pool components, namely, 20% of their face value.

(Subparagraph 3 paragraph 2 of the Decision on the pilot project)

6. What is the minimum number of bidders that can bid?

One bidder can participate in the auction.

7. What is the auction step for the Dutch model?

The auction step (decrease step) is set by the decision of the Fund and is noted in the announcement of the sale of the asset. Typically, the reduction step is 1%.

8. What is the amount of the guarantee fee?

The cost of the guarantee fee is 5% of the initial price of the lot, the guarantee fee is returned to those participants who are not recognized as winners in the auction. The guarantee fee is returned to the winner after the full payment for the lot and the signing of the purchase and sale agreement, minus the commission of the trading platform (exchange). The winner of the auction, who won the auction, but violated the terms and conditions of sales, the guarantee fee is not returned.

(Established in accordance with the decision of the Executive Directorate of the Fund)

9. To what details is the guarantee fee paid?

To the details of the exchange, through electronic platform which the participant has registered to participate in open bidding (auction).

(PP. 1.1. clause 1, PP. 7.5 clause 7 of the Regulations)

10. In what cases is the guarantee fee refunded?

The guarantee fee is returned after the end of the auction within 3 working days to the participants of the open bidding (auction), except for the winner. The guarantee fee is also returned to the winner of the auction minus the commission of the trading platform (stock exchange) after signing the contract of sale.

(Clause 4 of Section VII of the Sales Regulations)

11. Can I register for a Dutch auction during the auction?

Yes, but you must register for the auction before 16:00 on the day of the auction (information with the exact date and time is published in the announcement of the auction). Access to participate in the auction will be provided to the buyer after the paid guarantee fee is credited to the exchange account.

12. How to get acquainted with the regulations of the selected electronic trading system?

On the websites of each of the exchanges, accredited and working through the ProZorro.Sale system, there is an opportunity to familiarize yourself with the regulations of this exchange.

13. By what principle will assets be grouped that are not sold at retail?

Currently, several approaches are being considered. One of the possible criteria by which pools can be formed is a grouping by belonging to a bank, that is, “one pool - one bank”. Another scenario that is currently being considered is the grouping by region of assets - north, south, west and east. The third approach assumes grouping by asset categories - for example, if mortgage loans of individuals have not found their buyer at retail, they will be formed into pools according to the criterion of belonging to this category of assets (mortgage loans of individuals).

14. Does the borrower redeem the right of claim on his loan?

No. The borrower and the guarantor (if any) cannot participate in the auction.

If after the end of the auction it is found that the winner of the auction is the borrower or the guarantor, the auction will be declared invalid, and the guarantee fee will not be returned to the winner.

15. Why are there so many electronic trading exchanges and how are they different from Prozorro.Sales?

The Fund is constantly selecting exchanges for the sale of assets (property) of banks for the sake of greater convenience for potential buyers, improving competition between operators, and bidding.

All exchanges accredited by the Fund are part of the Prozorro project. The sales portal https://prozorro.sale/ is not an exchange and acts as information platform("Single Cabinet"). It is not possible to take part in the auction directly through this portal. However, you can select an auction, read the open auction documentation, terms, select trading exchange(follow the link to the site of the organizer of the auction), as well as follow the link to the auction page and monitor its progress in real time.

16. I want to purchase assets (property) of the bank. How do I know when the auction for this property will take place?

If the property you are interested in is not yet sold at auctions, you should contact the authorized person of the Fund to liquidate the bank on whose balance sheet it is recorded, with a proposal to put it up for sale.

18. I won the open auction, but did not pay the full amount determined by the results of the auction on time. Is my security deposit refunded?

No, in such cases the guarantee fee is non-refundable. If a potential buyer believes that his rights have been violated, he can file a complaint for consideration with the Fund (see section 5).

19. Procedure for payment of funds for the purchased lot

After signing the protocol by the Winner Marketplace(exchange) and the Bank, the Bank will upload it to the Prozorro central database. Sales, and the uploaded protocol will appear on the lot page on the prozorro.sale website.

After that, the winner pays money for the acquired asset to the bank details recorded in the protocol.

Then the guarantee fee is returned to the winner, minus the operator's remuneration.

20. Is it possible to extend the payment term for the purchased lot and the signing of the sales contract?

In the presence of good reasons, the Bank has the right to submit a letter to the Fund with a request to extend the term for payment of the lot and signing the contract of sale. The Complaint Review Commission has the right, based on the results of the consideration of the complaint, to recommend to the Executive Directorate to take a decision on extending the term for signing the sales contract.

(Clause 4 of section 7 of the Regulation on organizing the sale of assets)

21. In what cases is it necessary to certify a contract of sale by a notary?

According to Article 55 of the Law of Ukraine "On Notaries", transactions on the alienation of property subject to state registration are certified subject to the submission of documents confirming the ownership of the alienated property. When certifying transactions for the alienation of immovable property, the absence of a prohibition on the alienation or attachment of property is verified.

At the request of an individual or legal entity, any transaction with its participation can be notarized.

(Article 209 of the Civil Code of Ukraine)

22. Who decides to cancel the auction results?

Electronic trading or its results may be canceled (cancelled) by the bank at any stage solely on the basis of the relevant decision of the Executive Directorate of the Fund.

(Clause 7.3 of section 7 of the Regulation on organizing the sale of assets)

23. How to return the funds paid for the asset by the winner, if the auction is declared invalid, not through the fault of the buyer?

Is the security deposit refundable?

Returned in full.

How is the principal amount (price) of the asset returned?

In the event that a contract for the sale of assets (property) of the bank (s) is concluded and payment is made under such an agreement, the funds paid are returned to the winner of the open auction in the manner and within the time limits specified by the legislation on the transfer of funds. At the same time, if such funds are received on the bank's savings account, the bank is obliged to inform the new creditor about their return to the borrower.

(According to paragraph 7 of section 7 of the Regulation on the organization of the sale of assets)

If the buyer made payment for the asset (s) (property) of the bank before the conclusion of the contract for the sale of the asset (s) (property) of the bank and the Fund decided to cancel the results of open trading (auction), the bank returns to such a buyer the funds transferred by him within three working days from the date of such decision by the Fund.

(Clause 7 of Section 7 was supplemented with a new paragraph in accordance with the decision of the Executive Directorate of the Fund dated 23.08.2017 No. 3778)III. WORK WITH SITES HTTPS:// PRO ZORRO.SALE / TA HTTP://TORGI.FG.GOV.UA/

V. NON-STANDARD QUESTIONS AND SITUATIONS:

1. Does the Fund have the right to sell the right to claim on a loan taken in foreign currency if the Law on Foreign Exchange Moratorium is in force in Ukraine?

The effect of the norm of the Law "On the moratorium on the recovery of property of citizens of Ukraine provided as security for loans in foreign currency" in terms of the assignment (sale, transfer) of debt or debt in favor (in ownership) of another person does not apply to banks classified as insolvent and according to which the procedures for withdrawing from the market are carried out in accordance with the Law of Ukraine "On the system of guaranteeing deposits of individuals".

(Clause 1 of the Law of Ukraine "On the moratorium on the recovery of property of Ukrainian citizens provided as collateral for loans in foreign currency")

2. At the first stage of the Dutch auction, I placed a bid and stopped the price reduction. Does this mean that I am the winner of this auction?

Not yet. In the period from 16:15 to 16:55, the next stage of the auction will begin - the period for submitting closed bids. Other participants (everyone except the participant who stopped the auction) can make their bids (at least 1 step upwards from the fixed price (the one at which the auction was stopped).

At the next stage, after opening the participants' closed bids, the participant who stopped the auction has the right to raise the highest bid.

3. At the first stage of the Dutch auction, I placed a bid and stopped the price reduction. Can I place a bid during the closed bidding period?

No, the participant who made a bid and stopped the price reduction at the stage of closed bids does not participate.

4. At the first stage of the Dutch auction, I placed a bid and stopped the price reduction. What are my actions after opening closed bids?

If one of the other participants during the second stage did high stakes than the one at which the fall in the value of the asset was stopped, the participant who made a bet during the first stage and stopped (fixed) the price, at the third stage (after opening price offers) decides:

He can make a bid higher than the highest bid made in the second stage (in this case, this participant will be declared the winner)

Refuse the bid (in this case, the participant who made the highest bid during the closed bidding stage will be declared the winner).

5. I took part in the auction, but did not win. Will my security deposit be refunded and when?

So, the guarantee fee is returned within 3 business days after the end of the auction.

6. I took part in the auction and was declared the winner. What are my next steps?

Within 3 working days to sign the protocol of open trades (auction).

Within 20 working days after the end of the auction, pay the full cost (minus the amount of the guarantee fee) of the asset, determined as a result of the auction, according to the details.

After paying the full price for the asset, sign the contract of sale.

7. I took part in the auction and was declared the winner. Do I have to go to Kyiv so that within 3 days I sign the original protocol of the auction?

Within 3 working days, the winner is obliged to sign the protocol of the auction at the location of the organizer of the auction - the electronic trading system through which the winner of these open auctions took part in the auction.

8. I won an open bid but don't have enough money to pay. How long do I have to deposit this amount?

Full payment for the purchased lot is made within 20 working days after the end of the auction. In exceptional cases, the term for signing the sale and purchase agreement may be extended up to 42 working days by the decision of the Fund (the proposal of the Executive Directorate of the Fund is submitted by the Complaints Committee).

(Subparagraph 6 of paragraph 6 of Section 3 of the Regulations on the Complaints Review Board)

9. I won the open auction, but within a certain time I did not deposit the full amount determined by the results of the auction. Is my security deposit refunded?

No, the winner of the auction, who refused to purchase the lot, will not be refunded the guarantee fee.

10. I purchased an item at auction, but the actual characteristics do not match those stated in the public asset data sheet?

A participant in an open bidding (auction) may file a complaint in the prescribed form by e-mail This email address has been protected from spambots. you need to turn on JavaScript to make it work. which will be considered by the Fund's Complaint Review Board. The complaint form can be found at http://torgi.fg.gov.ua/komisiya.php

Dutch auction: from tulips to tokens

Second-Price Dutch Auction is relatively new model tokensales. So far, this model has only been applied by three projects: Gnosis, Polkadot, and Raiden Network.

The Gnosis project auction in April 2017 became a prime example how the idea of ​​rationality, which guided the organizers of the auction, did not coincide with the rationality of its participants. Their rationality was the fear of missing out, and today we can argue that this fear was fully justified, since the market price of GNO at the time of writing was four times the closing price of the token sale ($120 vs. $30).

What is the main difference between the Gnosis auction, which its authors called the modified Dutch auction, and the Polkadot and Raiden Network auctions? The fact that the target amount of fees was set, upon reaching which the tokensale was closed, and the Spend-All principle was not used. Fixing the target amount at a relatively low level, combined with an insufficiently high starting price, led to the fact that, in fact, the Dutch auction of the second price did not take place. The target amount was reached at the first, maximum price of GNO, at which 4.19% of GNO were distributed.

Projects that do not assign a maximum fee amount are sometimes referred to as greedy. At first glance, Gnosis doesn't look as greedy as Polkadot and Raiden Network, as there was a fee cap on the sale of GNO. However, in fact, the greed of the Gnosis token sale manifested itself in a different way. The model of this token sale was based on the possibility of selling 4.19% of GNO for the maximum amount of fees, while at Polkadot and Raiden Network buyers received all tokens, regardless of the amount collected.

Prospects for the Dutch auction in the world of token sales

The auction model of token sales has already become mainstream in the ICO world. It is not customary to call it an auction, but the gradual decrease in bonuses or discounts during the token sale is essentially a variation of the auction, where the price of the lot increases according to the initially set algorithm.

The advantages and disadvantages of a Dutch second price auction with a full sale and no bonuses or discounts have been described above. So far, Dutch token sales have not become mainstream ICOs, but the presence of the mentioned advantages allows us to expect the emergence of new successful examples of the implementation of this model.

The cryptocurrency industry is distinguished by the fact that projects often appear in it, problem solving which do not exist today. At the end of the article, we will also try to fantasize a bit on the subject of token sale auction models.

The Dutch auction can be not only direct, but also reverse. In the reverse Dutch auction, the price of the lot does not decrease, but increases. If in an English auction several buyers compete for the right to purchase a lot, naming an increasing price, then in a reverse Dutch auction the scheme is different. In this model, there is one buyer who starts bidding by declaring a minimum price and gradually raises it, and several sellers compete for the right to sell their goods to him. The seller who first agrees to sell his goods to the buyer wins. This auction model can also be applied to a token sale, and it will be a completely different kind of token sale than the Dutch second-price auction.

A reverse Dutch auction token sale involves one buyer, for example, a large institutional investor, and several sellers of tokens. These may be sellers of the same token, but more interesting option, when the buyer selects several projects that sell their tokens, and organizes a competition between them for the right to sell their tokens to him.

First, the buyer names the most low price, and then gradually increases it until one of the projects is the first to agree to sell its tokens at this price. Today, projects are simply traded with large buyers of tokens one on one, and in the proposed model, the buyer arranges open competition between projects.

This competition can also be organized in the form of an English auction, when the lot is a certain amount of money, and the rates are the number of tokens that a particular project is ready to sell for this amount of money. In this case, the project that sold its tokens at the lowest price still wins.

If the current growth rates in the number of projects entering the ICO, as well as the trend towards concentration and centralization of the capital of token buyers, continue, then the necessary conditions for holding such an auction may form in the very near future.

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Auction trading is a common occurrence in our time. And this is not so surprising, because it helps some sellers to profitably sell certain goods, and others to buy what they need at a favorable price for themselves. It is difficult to overestimate the importance of this type of trade. Evidence of this are international auctions, through which huge volumes of goods are sold. So, about 70% of tea, 90-95% of unwashed wool, significant volumes of furs are sold in this way. There are constantly working flower auctions in Holland.

Some believe that the sale of goods at auction is beneficial only to sellers, because the price is constantly growing with each step and it seems that it just winds up. However, this is only partly true for traditional type auction to which we are all accustomed. But the auction can be carried out in a different way, when the price does not increase with each step, but decreases. Such trade is called Dutch.

The Dutch auction is a type in which a deliberately high starting price is immediately assigned, and then they begin to gradually reduce it until someone buys the exhibited goods. If there are several sellers, then the buyer chooses the one who asks for the lowest price.

This type of auction sales in international practice is sometimes called wading. Its essence is as follows: the seller determines the maximum price for his product, which can be seen on a special dial installed in the hall, and begins to reduce it until one of the participants presses the button assigned to him and thereby expresses his intention to make a deal .

The Dutch auction is usually used to sell a large number of identical items. It is very convenient for both small wholesale buyers and wholesalers. By the way, it was invented by tulip sellers, because they were very interested in wholesale sales of their perishable goods. The undoubted advantage for the seller is the ability to easily and quickly sell their goods. And buyers benefit from the fact that the price will be higher than the starting price only if demand exceeds supply. The Dutch auction is also called the reverse auction, as opposed to the traditional way of this kind of trade. Anyone can participate in it, since there are a lot of websites on the Internet that allow you to both sell and buy goods using an auction. As an example, consider the Dutch auction on eBay.

There may be several winners. Another feature is that the participant, in addition to the price, must also indicate the quantity of goods that he wants to purchase. The "proxy bidding" system does not work here, which means that maximum bet of each participant is known to all potential buyers. The buyer has the right not to purchase a lot if it suddenly turned out that he had a smaller number of goods than he ordered. In this case, the rest of the products will be offered to the next bidder after you.

A curious detail: according to eBay rules, when the auction comes to an end, each winner pays at the price that was indicated in the minimum successful bid! Since eBay does not send notifications that you "left" the list of winners of the ongoing Dutch auction, you should check the progress of the auction from time to time in order to, if necessary, make new rate. Looks a bit confusing, doesn't it? So let's look at some examples.

Let's say a certain seller decided to put up 10 digital cameras, the starting price of each of which is 200 USD. If there are 10 or fewer people who are completely satisfied with it and they made bets of 200 USD, then they will all be on the list of winners. And if there are more applicants, for example, 15 people, then only the first 10 will win. Suppose, among these 15 participants, 7 people bet 150 USD, and 5 participants - 130 USD. In this case, the first 7 people with 150 USD stakes and 3 people who bet 130 USD before the others will get the cameras. And all of them will pay the price of 130 USD, since this is the size of the minimum winning bid.