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ASF closed its annual budget in 2014 with a surplus of RON 18,288,000

Bucharest, 5 March 2015 – The Financial Supervisory Authority (ASF) is financed entirely from its own extra-budgetary revenues, according to GEO No. 93/2012, approved by Law No. 113/2013. The level of revenues from the regulatory, authorisation and supervisory activity of non-banking financial markets’ entities for 2014 was established by CNVM Regulation No. 7/2006, Law No. 32/2002, CSSPP Rules Nos. 7/2008 and 8/2008.

With effect from 1 January 2015, the level of ASF’s revenues is established by Regulation No. 16/2014.

In 2014, the revenues obtained from its core business (RON 165,920,000) increased to 118.67% as compared to the previous year, the degree of achievement being 112% by reference to the provisions of the annual budget.

The contribution of sectors to obtaining revenue was 47.26% by the capital market (up by 5.3% as compared to the share held in 2013), 29.97% by the insurance sector (down by 6%), and 20.57% by the private pensions sector (up by 2.21%).

In 2014, the fees per transactions in shares on the capital markets were reduced by 25% of the share applied to the value of transactions in financial instruments carried out on regulated markets (from 0.08% to 0.06%). Starting with 2015, reductions continued with 6.02% to the net assets of investment funds, with 21% of the share applied to the value of gross contributions of pension funds, and with 2.5% of the monthly share of the net asset value of the privately managed pension fund. Other percentages and fees were limited or eliminated.

Total expenditure (RON 147,632,000) decreased in 2014 to 98% as compared to 2013 and to 86.44% in relation to the provisions of the annual budget. Salary costs were reduced to 92.88%, while those with goods and services to 87.20% as compared to 2013.

Except for payments for severance packages of the voluntary termination plan, total expenditure in 2014 decreased by 10% as compared to the previous year. As a result of the review of the severance packages for employees in 2014 - although budgeted - the following were no longer paid: holiday bonuses, seniority bonuses, overtime, cumulative positions, allowances to persons from outside the institution, housing allowances.

At the end of the year, performance bonuses were paid to the majority of the employees, up to an average of 60% of the monthly salary. Also, bonuses for 5 projects were paid to 35 employees, up to a gross salary. Substantial reductions were registered for travelling abroad (76% of the travel costs incurred in 2013), protocol and representation (33%), mail, telecommunications and the Internet (67%), and more.

There was an increase in consultancy expenses (RON 1,464,219) in connection with the litigation of the Authority, mainly with former members of the Commissions taken over in 2013 (claims for compensatory salaries of RON 11,187,000), but also for consolidating the process of institutional restructuring and reconstruction, initiated with PWC in the first semester (RON 467,000) and continued with Hay, Deloitte, Tuca, Zbârcea & Asociații and the World Bank in the second semester (RON 907,500).

In 2014, the remuneration policy of ASF’s management and staff was revised, which entered into force gradually. Salaries and monthly meeting allowances of the executive members of the Board were reduced as of 1 June with 24%, and the monthly allowances of non-executive members with 40% with effect from 1 September, so that they should fall below those of BNR, according to GEO No. 93/2012, Art. 15. On the basis of Hay Consulting evaluations, salaries were adjusted to the level of supervised markets, according to GEO No. 93/2012, Art. 15. They were applied as of 1 January 2015 (for managerial positions), and 1 March 2015 for non-managerial positions. Personnel costs incurred with the members of ASF’s Board in 2014 were reduced by more than 78% as compared to the budgets intended for such purpose to the members of the boards of the 3 previous authorities (CSA, CNVM and CSSPP).

ASF's budget for 2015 provides further substantial reductions in personnel costs as a result of the completion of the restructuring process. When establishing the expenditure for 2015, the following were considered: the reduction of personnel as a result of the reorganisation measures adopted, and the allocation of considerably higher amounts in the 2015 budget for the improvement/modernisation of hardware infrastructure, software and IT services.

ASF's 2014 financial statements (along with those of the Policyholders Guarantee Fund) were audited by Ernst & Young and shall be presented in detail in ASF’s report to the Romanian Parliament in June of this year.

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About ASF

The Financial Supervisory Authority (ASF) is the institution that authorises, regulates, supervises and controls the entities operating on the non-banking financial market in Romania.

Established in 2013 through assuming and reorganising all powers and prerogatives of the National Securities Commission (CNVM), Insurance Supervisory Commission (CSA) and Private Pension System Supervisory Commission (CSSPP), ASF contributes to strengthening an integrated operational and supervisory frame on three markets amounting to more than 10 million participants.