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Secondary Legislation Amendments adopted by FSA to eliminate the obstacles identified in the document “Eight Systemic Barriers to the Development of Modern Capital Markets in Romania”

21 August 2014

In the meeting held on 20 August 2014, the Financial Supervisory Authority’s Board decided to make permanent/assume the discounts applied to the tariffs and commissions charged to the capital market participants (ordered by Regulations No. 5/2014 and No. 10/2014), as well as to introduce new decreases:

  • the rate of the value of bonds transactions, including of those convertible into shares, is reduced by 50% down to 0.02%;
  • the rate of the value of government securities transactions (0.0004%) is no longer applied;
  • the tariff for the registration of financial instruments (other than government securities) with FSA is reduced by 50% down to 500 lei;
  • the tariff for the registration of financial instruments in the case of government securities with FSA is no longer applied;
  • the rate charged for monitoring transactions made outside the regulated markets/alternative trading systems (OTC) is reduced from 0.15% to 0.06% of the value of the reported transactions;
  • the rate charged for transactions operated outside regulated markets and/or alternative trading systems, such as turnaround transactions is reduced by 50%, from 0.04% down to 0.02%.

The reduced tariffs shall apply starting from 16 September 2014.

The new amendments are part of the action plan related to the STEAM project (objective – to increase the market’s liquidity and attract investors on the capital market by reducing the rates/tariffs charged by FSA).

In the same meeting, the FSA’s Board adopted certain amendments of the secondary legislation (another objective assumed by the STEAM project, as part of the action plan to obtain the emerging market status) in order to eliminate certain obstacles identified by the Coalition for Romania’s Development/BSE in the document “Eight Systemic Barriers to the Development of Modern Capital Markets in Romania’’. The most important amendments are presented below:

Amendment of certain provisions regarding the public sale offering:

  • introduction of the possibility for the prospectus to be prepared also in a wide circulation language in the international financial field, with FSA’s consent;
  • introduction of several facilities (for example, eliminating the provisions regarding the minimum duration of the offer) or of express provisions clarifying certain rights of the offeror/issuer (such as the fact that the decision regarding the allocation is incumbent upon it);
  • the simplification of the documents/procedures related to such offers (for example, the elimination of certain documents that were required to be submitted to FSA, the elimination of the provisions regarding the confirmation by FSA, within a certain term, of receiving the offer results).

Optimizing the procedures regarding the exercise of the legal rights by involving the depository of the financial instruments and by amending the procedures regarding payments and the transfer of the ownership right over the paid shares in the case of global accounts opened in the financial instruments depository’s system.

Improving the procedures regarding the admission to trading on a regulated market (for example, specifying the existence of an agreement in principle of the market operator and subsequently of a final agreement regarding the admission to trading, reducing the terms within which the securities are registered with FSA or within which the application for admission to trading is submitted with the market operator).

Introducing the issuer’s obligation to determine and include certain key data (such as the payment date) in the GAA resolutions and to send certain information provided in the issuers’ report to the central depository.

Improving the procedures regarding the exercise of several rights of the shareholders during the GAA (for example, introduction of provisions regarding the acknowledgement of the capacity as legal representative based on the list received from the central depository, introduction of provisions regarding the replacement of the vote by correspondence).

Simplifying the obligations regarding the translation of the documentation for opening an account.

Simplifying the content of the presentation document provide by Regulation No. 32/2006 to be prepared by the intermediary and presented to the client.

Another action approved by the FSA’s Board on 20 August 2013, part of the STEAM project (objective – improvement of the accounting system of the entities authorized, regulated and supervised by FSA on the capital market), refers to the elaboration of a draft regulation for the approval of the regulations in line with the IFRS rules applicable to capital market entities. The bill shall be submitted for public consultations prior to 9 September 2014.

The Financial Supervisory Authority will continue to improve the secondary legislation for the sustainable development of the market by regulations benefiting to the investors.

The explicit purpose of the STEAM project (which includes the 3 decision packages of FSA) is to obtain the status as emerging market of the Romanian capital market within maximum two years, and its implicit purpose is that the market participants may acknowledge and benefit from the characteristics of an emerging market throughout the implementation of the FSA’s plan, not only when the objective is achieved.

FSA is part of the working group Great Barriers Shift whose purpose is to identify and eliminate the barriers preventing the development of the national capital market. The measures adopted by FSA in its meeting of 20 August 2014 shall be added to those communicated on 23 June 2014 – for details, please click here.

For details regarding the STEAM project and the related action plan, please click here.