MARKET CAPITAL
- DEVELOPMENTS IN THE HARMONIZATION OF THE
LEGISLATIVE FRAMEWORKFinancial Supervisory Authority
Intermediaries
Stock
operators
UCI
Depositaries, Clearing Houses/counterparties
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New legislative aspects in the capital market field
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3
5
Rasdaq Market:
Law No. 151/2014 and
Regulation No. 17/2014
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GEO No. 90/2014
4
Draft law on alternative
investment fund
managers
Law No. 10/2015 approving
GEO No. 32/2012 and
supplementing certain
legislative acts
Central depositories:
Regulation (EU)
No 909/2014
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RASDAQ Market: Law No. 151/2014 and Regulation No. 17/2014
Novelties
I. Law No. 151/2014
• Imposing the obligation on the companies whose shares are traded on RASDAQ Market or on
the unquoted shares market to call and hold the GMS within 120 days after the entry into force of
the law to decide on the trading on a regulated market or within an alternative trading system
• Granting the shareholders of the companies on RASDAQ market the right to withdraw from the
company subject to express conditions provided by law
•
FSA’s obligation to issue regulations for the application of the legal provisions
II. FSA Regulation No. 17/2014 brings clarification on the:
•
Identification date of the shareholders having the right to withdraw from the company
•
Term within which the companies must pay the counter value of the shares held by the
shareholders having exercised the withdrawal right
•
Date/term when the shares traded on RASDAQ market/unquoted shares market shall be
withdrawn from trading and deregistered from FSA’s records
•
Documents based on which FSA’s decision on the admission to trading on a regulated
market/alternative trading system shall be issued
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RASDAQ Market: Law No. 151/2014 and Regulation No. 17/2014
Further steps
✓
The General Meetings of Shareholders shall be held based on Law No.
151/2014 and FSA Regulation No. 17/2004
✓
The companies from RASDAQ/unquoted shall be admitted to trading on the
regulated market within the alternative trading system
✓
RASDAQ market shall no longer function after the expiry of the 12 months
provided by Law No. 151/2014
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“Eight Barriers” Project – changes to the Capital Market Law
by GEO No. 90/2014
Novelties
•Modifications to reduce the period of time necessary for admission to trading;
•Improvement of certain provisions on public sale offering by aligning the provisions to the
Prospectus Directive, removal of the requirements of a public offering notice and clarification of
the advertising notices regime
•Clarification of the powers of attorney regime by introducing the possibility for the
representation of shareholders in the general meeting of shareholders also through general
power of attorney, where the power of attorney is granted by the shareholder, as client, to an
intermediary or a lawyer and provided that such shareholder is not in any of the specific situations
provided in the draft law
•Simplification of the procedures concerning the submission of documents for the
participation of shareholders in general meetings
•Modification and simplification of the procedure for voting by correspondence;
•Reducing the payment term of dividends
•Payment of dividends granted by issuers through the Central Depositary and participants in
the clearing- settlement and register system
•Introduction of the obligation to submit copies of the shareholders’ identity documents to
the central depositary
•Relaxation of the requirements on quorum and adoption of decisions in the case of
extraordinary general meetings of shareholders deciding on the suspension of the preference
right in the case of increasing the share capital by contribution in cash or in kind contribution 5
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Other changes to the Capital Market Law by GEO No. 90/2014
Novelties
• Increase to 20% the holding limit at market operators;
• Align the conditions on quorum and voting majority within the general meetings of
shareholders of market operators to the provisions of Company Law No. 31/1990;
• Align the provisions on capital requirements at investment firms (SSIFs) to the provisions
of Directive 2013/36/EU of the European Parliament and of the Council on access to the activity of
credit institutions and the prudential supervision of credit institutions and investment firms, without
imposing capital requirements other than those that are currently in place.
Further steps
✓
✓
✓
The secondary legislation shall be amended to adapt it to the
modifications brought to the primary legislation
The market operators’ and central depositaries’ codes shall be
amended
The market operators’ instruments of incorporation shall be
amended
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GEO No. 32/2012 – Overview
Essential aspects regulated in 2012
• Issued for the application of Directive (EU) No 65/2009;
• Introduction of SAI passport within the EU, i.e. SAI in a EU member state (home member
state) may manage a UCITS in another EU member state (host member state);
• Simplification of the cross-border marketing procedure of a UCITS;
• Creation of the legal framework for cross-border mergers of UCITS;
• Introduction of a new type of UCITS, the master-feeder type, to facilitate the consolidation of
UCITS units;
• Replacement of the simplified prospectus with the key information document intended for
investors (Key Information Document - KID), to provide synthetic information for investors in
UCITS;
• Improvement of the cooperation mechanisms among national supervisory authorities.
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Law No. 10/2015 approving GEO No. 32/2012 and
supplementing certain legislative acts
Novelties
• Introduction of a provision imposing that the evaluation of the creditworthiness of UCITS units
must not be exclusively/automatically based on credit ratings issued by rating agencies
• Consolidation of FSA’s supervisory prerogatives related to the operations on the capital
market in line with the European Union’s legislation
• Appointment of FSA as competent authority responsible for the fulfillment of the tasks
resulting from Regulation (EU) No. 648/2012 (on OTC derivatives, central counterparties and
trade repositories)
• Possibility granted to market operators to choose between the monistic and dualistic
administration systems
•Irrevocability of transfer orders placed in the clearing-settlement system
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Law No. 10/2015 approving GEO No. 32/2012 and amending
certain legislative acts
Novelties
• Introduction of explicit provisions on the criminalisation of the deeds of theft of financial
instruments of clients and/or money funds related thereof as felony, given their social danger
• Modifications brought to create the legal prerequisites to amend the instruments of incorporation
of investment companies (SIFs), in accordance with the provisions of Law No. 31/1990 on the
conditions on quorum and voting majority required for the investment companies’ general
meetings of shareholders
•Modifications of the penalizing regime
•Further steps
✓
✓
FSA shall modify the secondary legislation to adapt it to the
modifications brought to the primary legislation by Law No. 10/2015.
The investment companies’ instruments of incorporation shall be
amended
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Draft law on alternative investment fund managers
Novelties
• The main purpose of this draft legislative act is to transpose Directive No. 61/2011 (AIFMD) into
the legislation of Romania
• AIFMD aims to provide at the level of the European Union a harmonized regulatory and
supervisory framework for alternative investment fund managers (AIFMs), and to regulate the
activity of all alternative investment fund managers (AIF), other than undertakings for collective
investment in transferable securities (UCITS), marketing units in particular to professional
investors, establishing authorisation requirements, capital requirements, risk and liquidity
management operational requirements, organisational requirements inclusively on the
evaluation of the assets of AIF portfolio, depositary requirements, requirements on the possibility
of delegation of AIFM functions, transparency requirements, cross-border marketing
requirements
• The definition of AIFM and AIF, indicating that AIF are both the NON-UCI regulated by the capital
market legislation, and those which do not currently fall within the scope thereof
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Draft law on alternative investment fund managers
Novelties
•
Imposing certain transparency and reporting obligations on NON-UCI administrators currently
falling, or not, within the scope of the capital market legislation, which, given the value of the managed
portfolios, do not require authorisation in accordance with AIFMD, in line with the provisions of Art.
22-24 of AIFMD and Art. 103 - 110 of Commission Delegated Regulation (EU) No 231/2013 of 19
December 2012 supplementing Directive 2011/61/EU of the European Parliament and of the Council
with regard to exemptions, general operating conditions, depositaries, leverage, transparency and
supervision
•
Imposing the possibility that the function of depository of AIF assets of Romania be held also
by an investment firm (SSIF) authorised by FSA or the branch of an investment firm authorised in
another member state, whose object of activity includes the non-core service of safekeeping and
administration of financial instruments for the account of clients, including custodianship and related
services, such as cash/collateral management, referred to in Art. 5 Para (1)1 Letter a) of Law No.
297/2004 and forming the object of the capital adequacy requirements, including of the capital
requirements for operational risks, and which holds, in all cases, own funds at least equal to the
value of the initial capital in line with the provisions of Directive 2013/36/EU and Regulation (EU) No
575/2013
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Draft law on alternative investment fund managers
Novelties
•
Imposing the authorisation obligation by FSA within 12 months after the entry into force of the
law of:
1. the NON-UCI administrators authorised/licensed by FSA until the entry into force of such
law and fulfilling the criteria provided by AIFMD (the value of total assets of managed AIF
exceeds EUR 500 mil. or EUR 100 mil. by leverage) to be included in the category of the
administrators which must unconditionally comply with AIFM
2. administrators of investment funds falling within the scope of AIFMD and which have not
been authorised/licensed by FSA until the date of the entry into force of such law
•
Imposing the registration obligation with FSA within 12 months after the entry into force of the
law on all alternative investment fund managers which currently do not fall within the scope
of the capital market legislation which, given the value of the managed portfolios, do not
require authorisation in accordance with AIFMD. This category also covers the venture capital
fund managers, and the social entrepreneurship fund managers, intending to market the units
on the territory of the states of the European Economic Area as EuVECA or EuSEF, whose
activity is regulated as of 22.07.2013 by the provisions of Regulations (EU) No. 345/2013 on
European venture capital funds and No. 346/2013 on European social entrepreneurship
funds
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Draft law on alternative investment fund managers
Further steps
✓
A draft legislation regarding alternative investment funds shall be
prepared and the provisions of Law No. 297/2004 applicable to NONUCI (including SIF) shall be repealed accordingly.
✓
FSA shall amend the secondary legislation to adapt it to the
modifications brought to the primary legislation by the Law on
alternative investment fund managers, to implement the provisions of
ESMA guidelines issued for the application of AIFMD.
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Regulation (EU) No. 909/2014
Novelties
•
Uniform obligations for settlement of financial instruments at the EU level
•
Obligation that the financial instruments of the issuers in EU be represented by
account registration
•
Settlement cycle of maximum 2 working days (T+2) – as of 1 January 2015
•
Measures to prevent and address settlement fails – detailed through technical
standards
•
Obligation of authorisation and supervision of central depositories in line with EU
uniform rules
•
Organisational requirements/rules of conduct/mandatory prudential requirements
for CSD of the EU
•
Introduction of the European passport for authorised CSDs
•
Requirements applicable to connections among CSDs
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Regulation (EU) No. 909/2014
Further steps
• Issuance by the European Commission of technical standards (TS) for applying
Regulation No 909/2014 (first draft envisaged for 18 June 2015) on:
 detailing the CSDs authorisation procedure
 detailing the organisational/operational requirements applicable to CSDs
 detailing the measures for preventing settlement fails
•
Within 6 months after the entry into force of TS, all CSDs of the EU shall:
 request reauthorisation based on Regulation (EU) No 909/2014
 notify the relevant connections with other central depositories
• Obligation of the two central depositories of Romania to reauthorize as central
depositories in line with Regulation (EU) No 909/2014;
• Review of the primary and secondary legislation to align to the new European
provisions;
• Until the authorisation of the depositories in accordance with Regulation (EU) No.
909/2014, the national rules on the authorisation and acknowledgment of central
depositories shall continue to apply.
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FSA Priorities for the capital market
STEAM Project –
emerging market
Launch
communication,
financial education
and professional
training
programmes
Strengthen the protection
function of investors and
modernise petitions’
processing process
FSA STRATEGY
2015
Review and relaunch
corporate and
municipal bond market
Align market
infrastructure to
European standards
Settle RASDAQ market
issue
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&
Thank you!