LAW 297 28/06/2004
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LAW No. 297 of June 28th, 2004on the capital marketISSUED BY: The Parliament of RomaniaPUBLISHED IN: the Official Gazette of Romania No. 571 of June 29th, 2004_________ Note C.T.C.E.: For using in court, only the text in the Romanian language has legal foundation. The Parliament of Romania adopts this Law. Title I General provisionsArticle 1
(1) This Law shall regulate the formation and operation of financial-instruments markets, together with their specific institutions and transactions, as well as of collective-investment undertakings, to facilitate investments of savings in financial instruments.(2) This Law shall apply to the activities and transactions referred to in par. (1), which are conducted on the territory of Romania.(3) The National Commission of Securities, hereinafter referred to as NCS, is the competent authority that is to enforce the provisions of this Law by exercising the powers set out by its statute.(4) The provisions of this Law shall not apply to money-market instruments, which are regulated by the National Bank of Romania, and to government securities issued by the Ministry of Public Finance if the issuer chooses to trade them on a market other than the regulated market as defined in Art. 125.(5) The provisions of this Law shall not apply to the management of public debt where there are involved: the National Bank of Romania, central banks of the Member States and other similar national entities from the Member States, Ministry of Public Finance, as well as other public entities.Article 2
(1) For the purposes of this Law, the terms and expressions below shall have the following meanings:1. qualifying shareholder - the natural person, legal person, or group of persons acting together, which have a direct or indirect holding of at least 10% of the share capital of a trading company or of the voting rights, or which have a holding which makes it possible to exercise a significant influence over the decisions made by the general assembly or the board of directors, as appropriate;2. netting - the conversion into one net claim or one net obligation of all claims and obligations resulting from transfer orders which a participant or participants either issue to, or receive from, one or more other participants with the result that only a net claim can be demanded or a net obligation owed;3. joint investment business - an investment business carried out for the account of two or more persons over which two or more persons have rights that may be exercised by means of the signature of one or more of those persons;4. issuer - entity with or without legal personality that has issued, issues, or intends to issue financial instruments;5. regulated entities - natural and legal persons, as well as entities without legal personality, whose activity is regulated and/or supervised by the NSC;6. subsidiary - an undertaking where there is one partner or shareholder in one of the situations referred to in point 27;7. investment fund - undertaking for collective investment without legal personality;8. open-end investment fund - undertaking for collective investment in transferable securities without legal personality, whose units are subject to ongoing issuing and repurchasing;9. group - shall represent an ensemble of undertakings made up of a parent undertaking, subsidiaries thereof, and entities in which the parent undertaking, or branches thereof, holds interests, as well as undertakings related in such manner that requires account consolidation and annual-report consolidation;10. credit institution - entity as defined in Art. 1 of the Law no. 58/1998 on the banking activity, as further amended and supplemented;11. financial instruments shall mean:a) transferable securities;b) units in collective investment undertakings;c) money-market instruments including government securities with maturity less than one year and certificates of deposit;d) financial-futures contracts, including equivalent cash-settled instruments;e) forward interest-rate agreements, hereinafter referred to as FRAs;f) interest-rate, currency, and equity swaps;g) options to acquire or dispose of any instruments falling within the scope of lets. a) to d), including equivalent cash-settled instruments; this category shall also include options on currency and on interest rates;h) commodity derivatives;i) any other instrument admitted to trading on a regulated market in a Member State or for which a request for admission to trading on such a regulated market has been made;12. derivative financial instruments - the instruments defined in point 11 lets. d), g), and h), combinations of these, as well as other instruments so qualified under the regulations of NSC;13. money-market instruments - the financial instruments that are normally dealt in on the money market;14. intermediaries - investment firms authorized by NSC, credit institutions authorized by the National Bank of Romania in accordance with the applicable banking legislation, as well as other similar entities authorized in Member or non-Member States to provide investment services such as those referred to in Art. 5;15. qualified investor:a) legal entities which are authorized to operate in the financial markets, including credit institutions, investment firms, other authorized and regulated financial institutions, insurance companies, collective investment undertakings, management companies, pension funds, as well as other entities that are not authorized or regulated and whose corporate purpose is solely to invest in securities;b) local and central public administration authorities, central credit institutions, international and regional institutions such as the International Monetary Fund, the European Central Bank, the European Investment Bank, and other similar organizations;c) other legal entities that satisfy two of the following three criteria:1. an average number of employees during a financial year of more than 250;2. total assets exceeding the equivalent of EUR 43,000,000;3. an annual net turnover exceeding the equivalent of EUR 50,000,000;d) certain natural persons, subject to mutual recognition. NSC may choose to authorize natural persons who are resident in Romania and who expressly request to be considered as qualified investors if such persons satisfy at least two of the following criteria:1. the investor has carried out transactions of a significant size on a regulated market at an average frequency of at least 10 transactions per quarter over the previous four calendar quarters;2. the size of the investor's securities portfolio exceeds EUR 500,000;3. the investor works or has worked for at least one year in the financial sector in a professional position which requires knowledge of securities investment;e) certain small- and medium-sized enterprises (SMEs), subject to mutual recognition. NSC may choose to authorize SMEs which have their registered office in Romania and which expressly request to be considered as qualified investors. For the purpose of this Law, small- and medium-sized enterprises are those companies, which, according to their last reported financial statements, do not meet two of the three criteria laid down in let. c);16. close links - the situation in which two or more natural or legal persons are linked by:a) participation, which shall mean the ownership, direct or by way of control, of 20% or more of the voting rights or share capital of an undertaking;b) control, which shall mean the relationship between a parent undertaking and a subsidiary or a similar relationship between any natural or legal person and an undertaking; any subsidiary undertaking of a subsidiary undertaking shall also be considered a subsidiary of the parent undertaking which is actually the entity that controls those subsidiary undertakings; the situation in which two or more natural or legal persons are permanently linked to one and the same person by a control relationship shall also be regarded as constituting a close link between such persons.17. offeror or person making an offer - the legal or natural person which offers securities to the public or offers to buy securities;18. offer of securities to the public - the communication to persons in any form and by any means, presenting sufficient information on the terms of the offer and securities to be offered, in order to enable the investor to decide with respect to selling, purchasing, or subscribing to these securities. This definition shall also be applicable to the placing of securities through financial intermediaries;19. public take-over bid - public offer to purchase that results in gaining more than 33% of the voting rights in a company, in favour of the offeror;20. undertakings for collective investment - organized undertakings, with or without legal personality, hereinafter called UCI, which take, either privately or publicly, funds from natural and/or legal persons, in order to invest them in accordance with the provisions of this Law and with the regulations issued by NSC;21. person - any natural or legal person;22. involved persons:a) persons that control or are controlled by an issuer or that are jointly controlled;b) persons that participate directly or indirectly to the conclusion of agreements in order to obtain or exercise voting rights jointly, if the shares falling under the scope of the agreement may grant a controlling position;c) natural persons within the issuing undertaking, which are vested with management or control responsibilities;d) spouses, consanguine and conjugal relatives up to the second degree of the natural persons mentioned in lets. a) to c);e) persons enabled to appoint the majority of the members of the board of directors of an issuer;23. persons acting together - two or more persons linked by an express contract or by an implied contract as to enforce a common policy regarding an issuer. The following persons are presumed to act together, provided no adverse evidence is produced:a) the involved persons;b) the parent undertaking together with its subsidiaries, as well as any of the subsidiaries having the same parent undertaking among themselves;c) an undertaking with its members of the board of directors and with the involved persons, as well as these persons among themselves;d) an undertaking with its pension funds and with the management company of such funds;24. insolvency proceedings - the collective measure set out by the Law no. 253/2004 on settlement finality in payment and securities settlement systems or by the foreign legislation either to liquidate a participant or to reorganize it, where such measure involves the suspending or confinement of transfers or payments;25. offering programme - a plan which would permit the issuance of securities, other than those of the kind of equities, in a continuous or repeated manner during a specified period;26. alternative trading system - a system which places together several parties which buy and sell financial instruments, in a manner leading to the conclusion of contracts, also called multilateral trading system;27. parent undertaking - legal person, shareholder, or associate of a trading company which qualifies under one of the following situations:a) holds directly or indirectly the majority voting rights in that company;b) has the right to appoint or remove a majority of the members of the management and control bodies or other decision-making persons in that company;c) has the right to exercise a dominant influence over the entity of which it is a shareholder or associate, pursuant to the provisions of contracts entered into with that entity or to provisions in the articles of incorporation of that entity;d) is a shareholder in or associate of an entity, and:1. the majority of the members of the management or control bodies or the majority of the managers of the subsidiary undertaking who have held office during the previous two financial years have been appointed solely as a result of the exercise of its voting rights; or2. controls alone, pursuant to an agreement signed with the other shareholders or associates, the majority of the voting rights;28. Member States - the Member States of the European Union and the other states which belong to the European Economic Area;29. home Member State:a) the Member State where the registered office of the investment firm or management company is located; if, under its national laws, the firm has no registered office, the home Member State is that in which its head office is situated;b) the Member State where the registered office of the company that runs a trading system is situated; if, under its national laws, the company has no registered office, the home Member State is that in which the head office of such company is situated;c) the Member State where the registered office of a management company of an undertaking for collective investment in transferable securities, established as open-end investment fund, is located, as well as the Member State where the registered office of the investment firm is located, in the case of an undertaking for collective investment in transferable securities established as an investment firm;30. host Member State:a) the Member State in which an investment firm or a management company has a branch or conducts business;b) the Member State, other than the home Member State of the undertaking for collective investment in securities, where units issued by the latter are marketed;31. branch - organized structure, which is a legally dependent part of a firm that provides one or all of the services for which the firm has been authorized, in accordance with the mandate received. All the places of business set up in Romania by a firm with the registered office or head office in a Member State shall be regarded as a single branch;32. units - trust units or shares issued by collective investment undertakings according to their legal statute;33. transferable securities:a) shares in companies and other securities equivalent to shares in companies, which are negotiable on the capital market;b) bonds and other debt securities, including government bonds with a maturity of over 12 months, which are negotiable on the capital market;c) any other securities normally dealt in, giving the right to acquire any such transferable securities by subscription or exchange, or giving rise to a cash settlement, excluding instruments of payment;34. equity securities - shares and other transferable securities equivalent to shares, as well as any other type of transferable securities giving the right to acquire such securities as a consequence of a conversion or exercise of such right, provided that securities under the second category are issued by the same issuer or by an entity belonging to the group of the said issuer;35. non-equity securities - all securities that are not equity securities;36. securities issued in a continuous or repeated manner - securities of the same type and/or class issued continuously or at least in two distinct issuances over a period of 12 months;(2) The NSC may issue, ex officio or upon request of a concerned party, administrative acts, which include motivated opinions related to the capacity of any person, institution, situation, information, operation, legal deeds, or negotiable instruments regarding their inclusion or exclusion from the scope or the terms and expressions defined in par. (1).(3) Any natural or legal person considering that their legal rights have been encroached, either by an administrative act or by the unjustified refusal of NSC to address a request with respect to a legal right, may take their contested matters to the Bucharest Court of Appeal.(4) The fact that the petitioner has not been given an answer within the term set out by the legislation in force from the filing of the petition shall be also considered an unjustified refusal to address a petition regarding a legal right.(5) In order to perform its supervisory activity, NSC may:a) verify the modality of fulfilling the legal and statutory functions and obligations of managers, directors, executive directors, as well as of other persons connected to the activity of the regulated or supervised entities;b) require the board of directors of regulated entities referred to in let. a) to convene its members or, as the case may be, the general assembly of shareholders, establishing the issues which must be included in the agenda;c) require the relevant court to decide upon the convocation of the general assembly of shareholders if the provisions laid down in let. b) are not complied with;d) require information and documents from the issuers whose securities are subject to public offers or have been admitted on a regulated market or traded in an alternative trading system;e) conduct controls at the premises of the entities regulated and supervised by the NSC;f) perform audit on any person in connection with the business of entities regulated and supervised by the NSC;(6) The NSC Register, kept in accordance with the provisions of this Law, shall have a public character.(7) The unauthorized performance of any activity falling within the scope of this Law, the unauthorized use of the words investment services, investment firm, investment services agent, management company, investment undertaking, open-end investment fund, regulated market, and stock exchange in association with any of the financial instruments defined in par. (2) point 11, commodities, or any combination of such, without the observance of the legal requirements, shall incur liability according to the law. Title II IntermediariesChapter I General provisionsArticle 3
(1) The investment services specified in Art. 5, regarding the financial instruments defined in Art. 2, par. (1) point 11 may be provided as part of their profession only by the intermediaries defined in Art. 2 par. (1) point 14.(2) The intermediaries which provide investment services in Romania shall be registered with the register kept by the NSC as follows:a) investment firms and intermediaries in non-Member States, based on the authorization granted by the NSC;b) credit institutions authorized by the National Bank of Romania;c) equivalent of the credit institutions and the investment firms authorized by the competent authorities of the Member States.(3) In all official deeds, the intermediary must produce, apart from the identification data thereof, the number and the date of registration with the NSC register.(4) The rights granted by the Title hereby may not be extended to the services provided as counterparty of the State, National Bank of Romania, or other public institutions or authorities that perform similar functions in connection to the monetary policy, exchange rate, public debt, and state reserve management.(5) The provisions of Chapters V and IX, as well as those of Art. 23 par. (4), Art. 24, Art. 25, and Art. 42 pars. (1) and (2) shall be also applied as appropriate to the credit institutions, the compliance with those provisions being monitored by the NSC.(6) The compliance with the authorization and capital adequacy requirements by the credit institutions shall be supervised by the National Bank of Romania.Article 4
(1) The investment services are provided by natural persons acting as agents of investment firms. These agents carry out their activity exclusively for the account of the intermediary whose employees they are, and cannot provide investment services for their own account.(2) No natural or legal person may supply investment services without being registered with the NSC Register.(3) The NSC shall lay down procedures regarding the registration of investment services agents with the register kept by the NSC, as well as regarding their situations of incompatibility.Chapter II Investment servicesArticle 5
(1) The investment services regulated by this Law are:1. main services:a) reception and transmission of orders from investors in relation to one or more financial instruments;b) execution of orders in relation to one or more financial instruments otherwise than for own account;c) dealing in financial instruments for own account;d) managing individual portfolios of the investors on a discretionary basis in compliance with the mandate assigned by them, where such portfolios include one or more financial instruments;e) the underwriting of financial instruments on a firm commitment basis and/or the placing of financial instruments.2. non-core services:a) safekeeping and administration of financial instruments;b) renting out safe-deposit boxes;c) granting financial-instruments credits or loans to an investor in order to perform financial instruments transactions, where the investment firm is involved in the transactions;d) advice given to undertakings on issues related to the capital structure, industrial strategy, as well as advice and services relating to mergers and the purchase of undertakings;e) other services related to the underwriting of financial instruments on a firm commitment basis;f) investment advice concerning the financial instruments;g) foreign exchange services in connection with the provision of investment services.(2) The NSC shall issue regulations on the provision of investment services in accordance with the provisions laid down in Art. 5 par. (1).Chapter III Investment firmsArticle 6
The investment firms, hereinafter referred to as investment firms, are legal persons, established as joint-stock companies, issuers of registered shares, according to the Law no. 31/1990, which have as sole object the provision of investment services and operate only based on the authorization granted by the NSC. Section 1 Initial capitalArticle 7
(1) The initial capital of an investment firm shall be determined according to the NSC regulations issued in compliance with the Community legislation in force and shall be equal to at least:a) the ROL equivalent of EUR 50,000 calculated at the reference exchange rate announced by the National Bank of Romania, if the investment firm which supplies the investment services referred to in Art. 5 par. (1), point 1 lets. a), b), and d), does not hold funds and/or financial instruments which belong to investors, does not trade financial instruments for its own account and does not underwrite securities issues based on a firm agreement;b) the ROL equivalent of EUR 125,000 calculated at the reference exchange rate announced by the National Bank of Romania, if the investment firm supplies the investment services referred to in Art. 5 point 1 lets. a), b), and d) and point 2 lets. a), b), d), f), and g), does not trade in financial instruments for its own account and does not underwrite securities issues based on a firm agreement;c) the ROL equivalent of EUR 730,000 for the investment firms authorized to provide all the investment services referred to in Art. 5, par. (1).(2) By 31 December 2004, the investment firms referred to in par. (1) let. b) are required to increase their initial capital to at least the ROL equivalent of EUR 85,000, and the investment firms referred to in par. (1) let. c) are required to increase their initial capital to at least the ROL equivalent of EUR 315,000, calculated at the reference exchange rate announced by the National Bank of Romania.(3) By 31 December 2005, the investment firms referred to in par. (1) let. b) are required to increase their initial capital to at least the ROL equivalent of EUR 105,000, and the investment firms referred to in par. (1) let. c) are required to increase their initial capital to at least the ROL equivalent of EUR 530,000, calculated at the reference exchange rate announced by the National Bank of Romania.(4) By 31 December 2006, the investment firms referred to in par. (1) let. b) are required to increase their initial capital to at least the ROL equivalent of EUR 125,000, and the investment firms referred to in par. (1) let. c) are required to increase their initial capital to at least the ROL equivalent of EUR 730,000, calculated at the reference exchange rate announced by the National Bank of Romania.(5) The initial capital shall be considered as part of the own funds, including the subscribed and paid-up capital, as well as other items of the balance sheet, calculated in accordance with the methodology laid down by NSC regulations, in compliance with the relevant Community legislation.(6) In order to comply with the requirements envisaged by the Community legislation, the NSC shall change the initial capital level of investment firms by order of the chairman.(7) The reference exchange rate referred to in this Article is that of the reporting day.(8) The investment firm referred to in par. (1) let. b) may hold financial instruments on its own account, subject to the simultaneous fulfilment of the following conditions:a) the holding of financial instruments for the own account arise only as a result of a failure of an investment firm to match the investors' orders precisely;b) total market value of all financial instruments held for own account represents 15% or less of the initial capital of that firm;c) the investment firm meets the requirements referring to capital adequacy in accordance with the Community legislation;d) the holdings of financial instruments for the own account are incidental and provisional in nature and strictly limited to the time required to carry out the transactions in question. Section 2 Authorization, suspension, and withdrawal of authorizationArticle 8
(1) The investment firm will be authorized by the NSC to provide investment services subject to simultaneous fulfilment of the following conditions:a) the firm is established as a joint-stock company;b) the registered office and the head office, as appropriate, which act as the principal place of business, are situated in Romania;c) the corporate purpose is solely the provision of investment services;d) the qualification, professional expertise and integrity of managers, directors, auditors, and persons within the internal control department satisfy the requirements set out by NSC regulations;e) evidence of the existence of the minimum initial capital, subscribed and fully paid-up in cash, according to the investment services that are to be provided;f) presentation of the business plan, description of the organizational structure and of internal regulations;g) presentation of the contract concluded with a financial auditor, member of the Financial Auditors Chamber of Romania (CAFR) that fulfils the common criteria laid down by the NSC and the Financial Auditors Chamber of Romania;h) presentation of the shareholders structure, identity and integrity of qualifying shareholders;i) other requirements laid down by the NSC regulations.(2) The authorization granted by the NSC to an investment firm shall explicitly state the investment services it is allowed to provide according to the provisions of Art. 5, par. (1) points 1 and 2 and may not include only the non-core services mentioned in Art. 5, par. (1) point 2.(3) Where there are close links between the investment firm and another natural or legal person, the NSC shall grant the authorization to provide investment services to such investment firm only if those close links do not prevent the exercise of its supervisory functions according to this Law.(4) The NSC shall grant authorization to an investment firm within maximum 6 months from the date when the complete documentation required by the regulations in force is submitted, or shall issue, in the event of rejection of the application, a motivated decision which may be contested within 30 days from the date of its communication.(5) The investment firm may start business activity at the time of obtaining the authorization subject to becoming member of the Investor Compensation Fund.Article 9
An investment firm is required to meet the authorization requirements, prudential and capital adequacy requirements envisaged by this Law and by the NSC regulations, for the entire period of carrying on business, and shall notify or submit for authorization in advance, as the case may be, any change in its organization and operation mode in compliance with the NSC regulations.Article 10
The NSC is entitled to deny authorization to a firm for the provision of investment services if:a) it is undergoing insolvency proceedings, in compliance with the law;b) any of its qualifying shareholders, members of the board of directors or managers:1. is incompatible according to NSC regulations or holds a significant position in a firm falling under let. a);2. has been convicted of fraudulent management, breach of trust, forgery, use of forgery, deceit, embezzlement, perjury, bribery, as well as of other economic offences;3. has been sanctioned by the NSC, the National Bank of Romania, the Insurance Supervision Commission or by any other financial market regulating authorities, by being prohibited from exercising any professional activity, for the period during which this prohibition is in force;c) the NSC finds that the legal provisions, the regulations issued for their enforcement, as well as the administrative regulations of the non-Member State that govern the statute of the persons having close links with the investment firm, or that the difficulties encountered in their implementation prevent proper achievement of prudential supervision functions, or that the supervision by the non-Member State of a foreign intermediary that applied for authorization for a subsidiary is insufficient;d) the NSC has not been informed of the identity of shareholders, natural and/or legal persons, which hold directly or indirectly qualifying positions within investment firm or of the size of the holdings of such shareholders;e) the NSC finds that the shareholders, natural or legal persons, which hold directly or indirectly qualifying positions within the investment firm, do not comply with the requirements of ensuring sound and prudent management of the investment firm as well as effective prudential supervision according to this Law;f) the applicant firm does not have the initial capital as set out in the NSC regulations;g) although the requirements laid down in Art. 8, par. (1) are met, proof is produced evidencing that sound and prudent management of the investment firm cannot be ensured.Article 11
The NSC has the right to suspend the authorization of an investment firm for a period from 5 to 90 days if the provisions of this Law or NSC regulations are not complied with only if the conditions for the withdrawal of the authorization or for other more serious sanctions set out by the law are not met. The suspension of the authorization may be extended when the initial term expires but for no longer than 30 days over the maximum limit set out in this Article.Article 12
(1) The NSC has the right to withdraw the authorization to supply investment services issued to an investment firm only when:a) the investment firm has failed to start providing investment services for which it was authorized within the 12-month term from receiving the authorization or has not provided any of the services authorized by the NSC, as laid down in Art. 5 par. (1) point 1, for a period longer than six months, except for the situation when the NSC has suspended the authorization for that period;b) the investment firm does no longer comply with the conditions according to which the authorization has been issued;c) the investment firm does not comply with the capital adequacy regulations laid down by the NSC;d) the investment firm or its agents for investment services do not comply with the regulations of the NSC and/or of the regulated markets;e) if events subsequent to the granting of the authorization result in an incompatibility as regards the provision of investment services;f) other situations envisaged by the NSC regulations.(2) Upon express request of an investment firm, based on a renunciation statement, the NSC shall withdraw the authorization for performing the investment services, in accordance with the regulations issued to that effect;(3) The NSC shall cancel the authorization of an investment firm if such authorization has been granted based on false or misleading statements or information.Article 13
(1) The NSC shall require information or shall consult the competent authorities of a Member State before authorizing an investment firm, when this is:a) a subsidiary of an intermediary authorized in that Member State;b) a subsidiary of the parent undertaking of an intermediary authorized in that State;c) controlled by the same natural or legal persons that control an intermediary authorized in that Member State.(2) The competent authorities of the Member States, which are in charge of supervising credit institutions or insurance companies, shall be consulted before granting authorization to an investment firm when this is:a) a subsidiary of a credit institution or insurance company authorized in another Member State;b) a subsidiary of the parent undertaking of a credit institution or insurance company authorized in another Member State;c) controlled by the same natural or legal persons that control a credit institution or insurance company authorized in another Member State. Section 3 Managers, administrators, internal control, and qualifying shareholdersArticle 14
(1) The management of the investment firm must be ensured by at least two persons. The managers must be employees of the investment firm with individual labour contracts and may be members of the board of directors.(2) The managers are the persons who, according to the articles of incorporation and/or the decisions of the statutory bodies within the investment firm, are empowered to manage and co-ordinate its daily activity and are entitled to bind the intermediary; the persons that ensure the direct management of the departments within an investment firm, branches, or other secondary offices shall be not included in this category. In the case of branches of intermediaries that are foreign legal persons, which provide investment services on the territory of Romania, managers are persons empowered by the foreign legal person intermediary to manage the activity of the branch and legally bind the foreign legal person intermediary in Romania.(3) The managers must effectively ensure the current management of the activities of the investment firm, exclusively discharge the function for which they have been appointed, and at least one of them has to make proof of his knowledge of the Romanian language. They must be graduates of economic, legal, or other universities related to financial activity or must have graduated post-graduate courses in one of the aforementioned fields and have experience of at least three years in the banking-financial or capital market field.Article 15
The administration of an investment firm may be provided only by natural persons.Article 16
The investment firm shall organize an internal-control department specialised in the supervision of compliance by the firm or by its personnel with the legislation in force concerning the capital market, as well as with its internal regulations.Article 17
The requirements regarding the authorization of the personnel, the organization and operation of the internal-control department shall be laid down by NSC regulations.Article 18
(1) Any person who plans to acquire, directly or indirectly, shares in an investment firm, which would have as an outcome a qualifying holding, must first inform the NSC, stating the size of the intended holding.(2) Any qualifying shareholder who plans to increase his holding, so that such holding would exceed 20%, 33% or 50% of the share capital or of the voting rights, or that investment firm would become his subsidiary, must first inform the NSC.(3) The NSC shall deliberate within 90 days from the date of notification and, if the case requires, may prohibit, by way of decision, the acquiring of such holding. In case of approval, the decision of NSC shall set out the deadline for the acquiring of the notified holding.(4) Any person who plans to diminish, directly or indirectly, his qualifying holding within an investment firm, must first inform the NSC, stating the size of the intended holding.(5) Any qualifying shareholder that plans to diminish, directly or indirectly, his holding so that it would fall below 20%, 33% or 50% of the share capital or of the voting rights or so that the investment firm would cease to be his subsidiary, must first inform the NSC.(6) If the person referred to in pars. (1) and (2) is an investment firm, a credit institution, or an insurance company authorized in another State, the parent undertaking of an investment firm, credit institution, or insurance company authorized in another State, or a natural or legal person that controls an investment firm, credit institution, or insurance company authorized in another State, and if, as a result of that acquisition, the investment firm in which the person that plans to purchase shares becomes his subsidiary or is to be controlled by him, the intention of purchasing the shares shall be subject to a preliminary consultation, as provided for in Art. 13.(7) The investment firm shall inform the NSC as soon as becoming aware of any acquisitions or disposals of holdings in its capital that would cause holdings to exceed or, respectively, fall below the thresholds referred to in pars. (1), (2), (4), and (5).(8) Periodically, at least annually, the investment firm shall inform the NSC of the identity of its qualifying shareholders and of the size of their holdings and, as appropriate, of any other data and information regarding such persons, as required by NSC regulations.Article 19
(1) The NSC may preclude one from acquiring one of the holdings referred to in Art. 18 pars. (1) and (2) if, taking into account the need to ensure sound and prudent management of the firm, it thinks that the person who would acquire such holding may prejudice the operation of the firm or its effective supervision.(2) In order to verify the integrity of a shareholder of an investment firm or of a person who intends to purchase, directly or indirectly, shares in an investment firm, the NSC may require the submission of identification data concerning any shareholder, natural and/or legal person holding, directly or indirectly, a qualifying holding.Article 20
(1) Where the qualifying shareholders, members of the board of directors, managers, or personnel of the internal-control department fail to ensure the prudent management of the investment firm, the NSC shall take appropriate measures for the remedy of such situation, measures that may consist, inter alia, in injunctions, sanctions against the directors and/or management, as well as against persons within the internal-control department.(2) Similar measures may be applied to persons guilty of non-compliance with the obligations laid down in Art. 18, pars. (1) and (2).(3) If the acquiring or increasing of a qualifying holding is performed without the assent of the NSC, the inherent voting rights will be considered null, and the potential expressed votes should be annulled accordingly.Article 21
Where the influence exercised by the persons referred to in Art. 18 pars. (1) and (2) and in Art. 20 is likely to prejudice the management of an investment firm, the NSC shall take measures to suspend the exercise of the voting rights underlying the shares held by such shareholders.Chapter IV Prudential rulesArticle 22
In order to protect investors, ensure stability, competitiveness, and the well functioning of the markets, the NSC shall issue regulations regarding prudential and capital adequacy requirements for an accurate assessment of risks, for the prevention and mitigation of their effects.Article 23
(1) The intermediaries authorized by the NSC are required to produce their financial statements as well as their regular reports.(2) The NSC shall issue regulations regarding the content, form, and deadlines for the submission of the reports referred to in par. (1).(3) The NSC may conduct inspections to verify the truthfulness of the data recorded in the financial statements and in the regular reports.(4) The intermediaries are required to keep for at least five years the data and information related to the investment services supplied in accordance with the provisions of Art. 5 in connection to a traded financial instrument, regardless of whether such transactions were performed on a regulated market or not.Article 24
(1) At all times in the course of carrying on their business, the intermediaries shall observe the prudential rules set out by the NSC. These prudential rules shall, without being exhaustive, refer to:a) suitable administrative and accounting procedures, control and safeguard procedures for electronic data processing, as well as adequate internal control mechanisms, including rules referring to the personal transactions of the employees;b) adequate procedures to ensure the separation of the financial instruments pertaining to the investors from those pertaining to the intermediary, in order to safeguard their ownership rights, especially in the event of the intermediary's insolvency, and to prevent the intermediaries to use such financial instruments in transactions for the own account, except for the situation where the investors have given their express consent;c) adequate procedures to ensure the separation of the funds pertaining to investors in order to safeguard the ownership right, except for the credit institutions, which should prevent the use of such funds for the interest of the firm;d) keeping of records of transactions executed to enable the NSC to monitor compliance with prudential rules, rules of conduct in business, as well as other legal and regulatory requirements;e) the existence of an organizational structure which shall minimise the risk of a conflict of interests between the investor and the intermediary or between the investors of the same intermediary. Where a branch is set up, the organizational arrangements thereof may not conflict with the rules of conduct laid down by the host Member State to avoid conflicts of interest.(2) The creditors of an intermediary may not, under any circumstances, turn to the assets of the investors, including in the case of insolvency proceedings. An intermediary may not use a client's assets in order to secure the transactions concluded for the own account or for the account of another client, except for the case when the client gives his consent in writing.Article 25
Prior to providing investment services, the intermediaries shall inform the investors with regard to the investor compensation funds or schemes.Chapter V Rules of conductArticle 26
(1) The intermediaries and investment services agents are bound to comply with the rules of conduct issued by the NSC as well as the rules issued by the regulated markets on which they trade.(2) The implementation and the supervision of compliance with the rules of conduct by all the intermediaries that provide investment services on the territory of Romania shall be ensured by the NSC.Article 27
(1) The NSC regulations shall implement principles that shall take into account the quality of the person for whom the service is provided. According to these principles the intermediary shall at least:a) acts honestly, impartially and with professional diligence for the protection of the interests of its clients and the integrity of the market;b) employs all the resources, draws up and efficiently uses the internal procedures required in providing investment services;c) requests from the investors information regarding their financial situation, investment experience and objectives as regards the services requested;d) discloses to the investors the relevant information on the transactions in which the intermediary is the counterparty;e) tries to avoid conflicts of interests, and, when they cannot be avoided, ensures that the investors are fairly treated;f) conducts business in compliance with the NSC requirements applicable to business management to protect the interests of the investors and the integrity of the market.(2) Where an intermediary executes an order, in order to apply the rules referred to in par. (1), the professional nature of the investor shall be assessed with respect to the person from whom the order originates, regardless of whether the order was placed directly by the investor himself or indirectly through another intermediary.Article 28
(1) The provision of investment services for the account of the investor shall be performed based on a contract drawn up in two copies, of which one shall be submitted to the client.(2) The NSC regulations shall stipulate the content and the minimum clauses of the contracts concluded with investors, including distance contracts.(3) Distance contract shall mean any contract relating to investment services concluded between an intermediary, acting as offeror, and an investor, acting as beneficiary of investment services, within a distance system of sales or provision of investment services, set up by the offeror, which, fore the execution of the contract, has the exclusive use of one or more distance means of communication, as from the time of the conclusion of the contract until its expiry.(4) The regulations referred to in par. (2) shall include the ways in which distance investment services may be provided based on a distance contract, explicitly mentioning the distance means of communication, including electronic communication means, as well as the period for which the contract has been concluded.(5) The regulations provided in par. (2) shall additionally include provisions binding the on intermediary as to inform the investor, as well as the consent of the investor to conclude such a contract that allows the intermediary to provide distance investment services.(6) Distance means of communication shall mean any means that, without requiring the simultaneous physical presence of the offeror or the beneficiary of investment services, may be used to carry out the will of the parties and the object of the contract.(7) The investor shall be allowed a 14-day period, from the conclusion of the contract, to unilaterally cancel the distance contract without being charged any fees or without motivating such cancellation. If the investor cancels the contract unilaterally, he may be hold to pay for the services provided under the contractual clauses. The carrying out of the contract shall proceed only after the investor has given his agreement.(8) The right to unilaterally terminate such a contract shall not be applied to investment services whose price depends on the financial market fluctuations, which might occur in the withdrawal duration and are independent from the providers of investment services, being linked to:a) foreign exchange operations;b) money market instruments, including government securities having a maturity of less than one year, and certificates of deposit;c) securities;d) units in undertakings for collective investment;e) financial-futures contracts, including equivalent cash-settled instruments;f) forward interest-rate agreements (FRA);g) interest-rate, currency, and equity swaps;h) options on any financial instrument referred to in lets. b) to e), including equivalent cash-settled instruments; this category also includes options on currency and on interest rates.(9) For the creation and development of an efficient and adequate system, the regulations referred to in pars. (2), (4), and (5) may envisage the preliminary complaint procedure and procedures of counselling the disputes regarding the investment services.Chapter VI TradersArticle 29
The traders are legal persons that deal exclusively in their own name and for their own account in derivative financial instruments, such as futures contracts and options.Article 30
(1) The traders shall be authorized according to the conditions laid down in the regulations of the NSC and shall be registered with the NSC Register.(2) The requirements in respect of the traders' capital shall be established by the regulations of the NSC.Article 31
The traders may operate only with the agreement of the market operator and in compliance with the regulations of that regulated market.Article 32
(1) The clearing and settlement of transactions carried out by traders shall be performed only through intermediaries that operate on the same regulated market as clearing members.(2) The responsibility regarding the obligations arising performing transactions of traders is also incumbent on the clearing members with whom they concluded clearing contracts.Article 33
The traders shall forbidden:a) to hold funds or financial instruments of other persons;b) to negotiate and conclude transactions in the name and for the account of other persons;c) to conclude with other persons explicit or implied contracts in order to act together on the regulated markets;d) to enter work relations with another intermediary or with a market operator.Article 34
The provisions of Art. 4 par. (3), Art. 23, Art. 24 par. (1) let. d), and Art. 26 shall also be applied as appropriate to the traders, in compliance with the regulations issued by the NSC.Chapter VII Investment advisers and rating agenciesArticle 35
(1) The professional provision of investment advisory services regarding the financial instruments shall be performed by investment advisers, natural or legal persons, registered with the NSC Register.(2) Investment advisers shall mean the personal recommendation to a client in relation with one or several transactions with financial instruments.(3) The NSC shall issue regulations regarding:a) the requirements as to obtain authorization to supply advice services on the financial instruments by natural or legal persons other than intermediaries, including the capital requirements for the pursuit of such activity.b) the procedures referring to the requirements with respect to the operation, supervision, reporting, and verification of investment advisers;c) suspension and withdrawal of the authorization of investment adviser;(4) The provision of investment advisory services rules out taking and executing orders of the investors as to the purchase or dispose of financial instruments, management of investors' portfolios, as well as settlement of transactions, including holding of funds or financial instruments for the account of the investors.(5) The investment advisers shall be subject to the rules of conduct adopted by the NSC according to the provisions of Art. 27.Article 36
(1) The NSC shall issue regulations regarding the eligibility criteria for rating agencies which assess and rate the issuers admitted to trading and the financial instruments traded on the regulated markets.(2) The rating agencies shall inform the NSC with respect to any rating provided in relation to the entities and instruments referred to in par. (1).Chapter VIII Cross-border transactions Section 1 Branches of investment firms - Romanian legal persons - and free movement of servicesArticle 37
An investment firm may provide investment services:a) in a Member State, in compliance with the provisions of Art. 38.b) in a non-Member State, based on the authorization granted by the NSC according to the regulations issued in this respect.Article 38
(1) The investment firm, Romanian legal person, which intends to set up a branch in a Member State, shall inform the NSC on such matter also providing the following information:a) a business plan, which shall include the investment services to be provided through the agency of the branch and the organizational arrangements thereof;b) the identity of the persons appointed to ensure the management of the branch;c) the address of the branch's headquarters;d) the investor-compensation schemes, which are applicable for the protection of the investors of the branch.(2) Within three months from receiving the information, the NSC shall forward such information to the competent authorities of the host Member State or, as appropriate, deny submitting the information, consequently informing the investment firm also stating the grounds for such refusal.(3) The NSC may issue a decision as to reject the application for the approval of the establishment of a branch in a Member State by an investment firm, Romanian legal person, if, based on the information available and on the documents produced by the investment firm, it finds that:a) the investment firm does not have an adequate administrative capacity or financial condition as regards the investment services to be provided through the agency of the branch;b) the investment firm records an inappropriate trend of its financial condition.(4) Where any of the information referred to in par. (1) changes, the investment firm shall communicate such change, in writing, to the NSC and to the competent authorities of the host Member State at least one month before the implementation of the change.(5) The NSC shall communicate to the competent authority of the host Member State any changes in the information previously provided, in accordance with par. (2).Article 39
(1) Any investment firm planning to supply for the first time investment services on the territory of a Member State in virtue of the free movement of services shall communicate the following information to the NSC:a) the Member State in which it intends to operate;b) a business plan specifying, in particular, the investment service or services which it intends to provide.(2) Within one month from receiving the information referred to in par. (1), the NSC shall forward such information to the competent authorities of the host Member State. After the expiry of such term, the investment firm may start supplying the investment services in question in the host Member State.(3) Where the information supplied according to par. (1) let. b) changes, the investment firm shall communicate such change, in writing, to the NSC and to the host Member State, before applying it, in order to send, if necessary, any change or completion to the information communicated.Article 40
(1) The prudential supervision of the investment services provided by the investment firm in the Member States and non-Member States, either directly or through branches, shall be ensured by the NSC, without prejudice to the functions of the competent authorities of the host Member State.(2) In order to discharge its supervisory functions, the NSC shall co-operate with the competent authorities of the Member States where the investment firm provides investment services directly or establishes branches.(3) If the NSC orders penalties, restrictions, or withdrawal of the authorization of an investment firm, it shall, immediately, inform the competent authority of the Member State where that firm provides investment services.(4) The special provisions of the banking legislation referring to cross-border transactions shall apply to the credit institutions authorized in Romania, which intend to provide core and non-core investment services abroad, along with the provisions referring to the provision of such investment services in Romania by the credit institutions from Member States and non-Member States. Section 2 Member States intermediariesArticle 41
(1) The intermediaries authorized and supervised by the competent authority of a Member State may provide in Romania within the limit of the authorization granted by the competent authority of the home Member State investment services under Art. 5 par. (1) directly or through a branch, based on the principle of the free movement of services, without having to obtain authorization from the NSC.(2) The intermediaries referred to in par. (1) shall have their head office in the Member State which issued their authorization and in which they carry on their business.(3) The intermediaries referred to in par. (1) may promote their services through all available means of communication in Romania, in compliance with the rules established by the NSC relating to advertising.(4) Within two months from receiving the notification from the competent authorities of the home Member State, regarding the provision of investment services through a branch, including all the information referred to in Art. 38 par. (1), the NSC shall inform the intermediary in question, if necessary, the conditions and rules of conduct, in accordance with which, in order to protect the general interest, the branch in Romania is to carry on its business.(5) The branch may start carrying on business at the time of communication by the NSC or on expiry of the term referred to in par. (4).(6) Any intention to change the information included in the communication received by the NSC, according to par. (4), must be notified by the intermediary in question, at least one month before the date such change is to be operated.(7) The NSC shall issue regulations for the enforcement of this section, in compliance with the relevant Community legislation.Article 42
(1) The intermediaries authorized in the Member States may have access to a regulated market in Romania in order to provide services in the nature of those referred to in Art. 5 par. (1) lets. b) and c), as well as to the clearing-settlement systems related to these markets either:a) directly, based on the free movement of services, or through setting up of branches;b) indirectly, by setting up branches or by purchasing an investment firm which is already a member or has access to a regulated market or to a clearing-settlement system.(2) The access of the intermediaries referred to in par. (1) to a regulated market or to a clearing-settlement system shall be subject to compliance with the regulations issued by the market operator or by the clearing-settlement systems, as approved by the NSC, with the rules of conduct, and with professional standards binding on the persons carrying on business in the name of such intermediaries. Section 3 Non-Member States intermediariesArticle 43
The setting up of branches on the territory of Romania by intermediaries from non Member States shall be subject to authorization by the NSC. The authorization requirements are:a) the branch's meeting the requirements laid down in Art. 8;b) the authorization of the firm and the legal provisions in the home country regarding the investment services the investment firm plans to supply on the territory of Romania through the agency of the branch;c) the existence in the home country of legal provisions regarding the authorization, supervision, and organizational arrangements similar to those in Romania;d) the existence of a co-operation agreement between the NSC and the competent authority of the home country;e) compliance with the reciprocity requirements in the home country within the limits allowed by the international accord.Chapter IX Investor-compensation fundArticle 44
(1) The investor-compensation fund, hereinafter referred to as the Fund, is a legal person established as a joint-stock company pursuant to its articles of incorporation, approved in advance by the NSC.(2) The shareholders of the Fund are the intermediaries and the management companies, which have as object the management of individual investment portfolios. The market operators, central depositary, and other entities regulated and supervised by the NSC may be shareholders of the Fund.(3) The NSC shall establish, by means of regulations, the principles regarding the Fund's organization and operation, the compensation procedure, also referring to terms, and transparency requirements.Article 45
(1) The intermediaries authorized to provide investment services and the management companies, which manage individual investment portfolios, must be members of the Fund.(2) The entities referred to in paragraph. (1) are required to set up and submit to authorization by the NSC the "S.C Fondul de compensare al investitorilor S.A" (The Investor-Compensation Fund), within 180 days from the date of this law's coming into effect.Article 46
(1) The purpose of the Fund is to compensate investors, in compliance with the conditions laid down by this Law and with the regulations of the NSC, where the members of the Fund fail to return the funds and/or the financial instruments owed to or belonging to the investors, which have been held in their name consequent to the provision of investment services or management of individual investment portfolios.(2) For the purposes of this Chapter, investor shall mean any person that has placed funds or financial instruments with a member of the Fund for investment services purposes.(3) The amount of the claim of an investor shall be calculated according to the legal and contractual provisions, taking into account the set off and counterclaims, that are applicable to the assessment, on the date of the determination or decision referred to in Art. 47, par. (1) of the amount of money or the value, determined where possible by reference to the market value, of the instruments belonging to the investors which the Fund member is unable to repay or return, according to the conditions set out in Art. 47 pars. (1) and (2).(4) The Fund shall provide compensation, in a lawful and non-discriminatory way, to the investors subject to a ceiling set out annually by the chairman of the NSC.(5) The following categories of investors are exempt from compensation:a) qualified investors;b) administrators, including managers, directors, censors, financial auditors of the members of the Fund, their shareholders with holdings that exceed 5% of the share capital, as well as investors with a similar status in other firms of the same group with the Fund members;c) spouses, consanguine relatives and conjugal relatives up to the first degree, as well as the persons who act on behalf of the shareholders referred to in let. b);d) the legal persons that are part of the same group with the Fund members;e) investors, natural or legal persons, that are directly liable for deeds which aggravated the financial distress of the member or have contributed to the deterioration of its financial condition.(6) The Fund shall suspend any payment to the investors that are undergoing criminal investigation relating to a deed emerging from or related to money laundering until the competent court issues a final and irrevocable decision.Article 47
(1) The Fund shall compensate the investors in any of the following situations:a) the NSC has acknowledged that, for the time being, from its point of view, an intermediary or a management company that manages individual investment portfolios, on grounds directly related to the financial condition, is unable to perform its obligations arising on investors' claims and there are no prospects as to honour such obligations in the shortest time possible;b) the relevant judicial authority, on grounds linked, directly or indirectly, to the financial condition of a Fund member, has issued a final decision that has as a result the suspension of the possibility of investors to exercise their rights as regards the realization of their claims on that company.(2) The compensation shall be ensured for the rights arising on the inability of a Fund member to:a) return the funds belonging to investors and held in their name in connection with their investment activities;b) return any financial instrument to investors, which belongs to them and is held and managed on their behalf in connection with their investment activities.(3) If the intermediary is a credit institution, any situation similar to that referred to in par. (1) shall be submitted to the NSC by the National Bank of Romania.(4) If the compensation is covered by the Deposit Guarantee Fund in the banking system, no investor shall be entitled to double compensation.Article 48
(1) In the situations specified in Art. 47, the Fund shall publish on its web-site, at the registered office of all territorial units of the member that is unable to return funds and/or financial instruments belonging to investors, as well as in at least two national daily newspapers, information concerning: the inability of the member to perform its obligations to the investors, the place, the way, and the period of time in which compensation applications may be filed, as well as the date when the payment of compensations to the investors is to commence.(2) The Fund shall subrogate de jure to the investors' rights for an amount equal to the payments made for the compensation of the funds and/or financial instruments. The Fund shall be recorded in the creditors' schedule for that amount in the event of judicial liquidation of its members.Article 49
(1) The Fund shall have the following financial resources:a) the initial contribution of the members, paid according to the regulations of the NSC;b) the annual and/or special contribution paid by the members;c) the income from the investment of the Fund's resources;d) the income from the recovery of claims compensated by the Fund;e) short-term loans that provide exclusively for temporary needs arising on granting of compensations;f) other income established by the regulations of the NSC.(2) The expenses of management and operation of the Fund shall be covered by the income from the investment of the Fund's resources, as well as from other income established by the regulations of the NSC.(3) The financial resources of the Fund shall be invested only in government securities or in other fixed-income instruments, fully secured by the state up to December 31, 2004, thereafter such investments shall be diversified with investments in low-risk assets, in accordance with the regulations issued by the NSC.(4) The Fund shall not pay dividends and may extend loans.Article 50
The NSC shall establish annually, by order of its chairman, the ceilings for the amounts set out in Art. 46 par. (3).Article 51
The contributions paid by the members of the Fund shall not be refunded, including in the case of judicial liquidation or dissolution of the members of the Fund.Article 52
The Fund shall submit an annual activity report to the NSC by April 30. Title III Undertakings for collective investmentChapter I Management companies Section 1 General provisionsArticle 533
(1) The management company, hereinafter referred to as management company, is a legal person, established as a joint-stock company, according to the Law no. 31/1990 regarding the trading companies, republished, as further amended and supplemented, and shall operate only based on the authorization issued by the NSC.(2) The management company shall be registered with the NSC Register, on the date of authorization.(3) In all the official documents, the management company must specify, in addition to its identification data, the number, and the date of its registration with the NSC Register. Section 2 Services supplied by management companiesArticle 54
(1) The management company shall have as corporate purpose the management of undertakings for collective investment in transferable securities, hereinafter referred to as UCITS, authorized in accordance with the provisions of this Law.(2) The management company may manage, subject to authorization by the NSC, other undertakings for collective investment, hereinafter referred to as other undertakings for collective investment, due to which the it shall be subject to prudential supervision.(3) By way of derogation from pars. (1) and (2), the management company may also perform the following activities:a) the management of individual portfolios of investments, including those held by pension funds, in accordance with mandates given by investors on a discriminatory basis, where such portfolios include one or more financial instruments as defined in Art. 2, par. (1), point 11 ;b) non-core services: investment advisory service concerning one or more financial instruments, as defined in Art. 2, par. (1), point 11.(4) The management company may be authorized to perform the activities referred to in par. (3) provided it was previously authorized to perform the activities referred to in par. (1) or (2) and may be authorized to perform the activities referred to in par. (3) let. b) only if it performs the activities referred to in par. (3) let. a).Article 55
(1) The management of the collective portfolio refers at least to:a) the management of investments;b) the performance of activities regarding:1. legal services and bookkeeping services relating to the management of portfolios;2. market research;3. portfolio assessment and determining the value of units, inclusive of tax issues;4. monitoring of the compliance with the regulations in force;5. maintenance of a register in respect of the holders of units;6. distribution of income;7. issuance and redemption of units;8. record keeping;c) marketing and distribution.(2) Subject to prior approval by the NSC, the management company may delegate to third parties the carrying on of the activities referred to in par. (1), in accordance with the regulations issued by the NSC.(3) The delegation referred to in par. (2) may be assigned to the management company situated in Romania or in other States, only if prudential management of investments is ensured and only if there are cooperation agreements in the field of information exchange, concluded between the NSC and the competent supervisory authorities in those States.(4) The management company shall not be discharged of liability as a consequence of delegating its functions to third parties.(5) The provisions of Art. 28 shall also be applied as appropriate to the management company.(6) The activities delegated to the third parties under the terms of this Article shall be performed in compliance with the same treatment applicable to the management company.Article 56
(1) The management of individual investment portfolios, referred to in Art. 54 par. (3) let. a), must be conducted in compliance with the prudential rules, rules of conduct in business, and capital adequacy requirements as set out in Arts. 22, 24, 27, and 57.(2) The management company which carries on the activities referred to in Art. 54 par. (3) may invest all or part of the managed investment portfolio in units of the UCI it manages, only with the prior agreement of the investor. Section 3 Initial capitalArticle 57
(1) The initial capital of a management company shall be determined in accordance with the NSC regulations and shall be at least the ROL equivalent of EUR 125,000, calculated at the reference exchange rate announced by the National Bank of Romania.(2) By 31 December 2004, the management companies are required to increase and maintain their initial capital to at least the ROL equivalent of EUR 50,000, calculated at the reference exchange rate announced by the National Bank of Romania.(3) By 31 December 2005, the management companies are required to increase and maintain their initial capital to at least the ROL equivalent of EUR 90,000, calculated at the reference exchange rate announced by the National Bank of Romania.(4) By 31 December 2006, the management companies are required to increase and maintain their initial capital to at least the ROL equivalent of EUR 125,000, calculated at the reference exchange rate announced by the National Bank of Romania.(5) The initial capital shall be considered as part of the own funds, including the subscribed and paid-up capital, as well as other balance-sheet items, calculated in accordance with the methodology laid down by the regulations of the NSC, in compliance with the relevant Community legislation.(6) Where the value of the portfolio managed by the management company exceeds EUR 250,000,000, the management company must increase its own funds by 0.02% of so much as the portfolios managed by management company exceed EUR 250,000,000 such that the sum of the initial capital and the additional amount shall not exceed EUR 10,000,000. The NSC shall issue regulations for the enforcement of this paragraph in compliance with the relevant Community legislation.(7) In order to comply with the requirements laid down in the Community legislation, the NSC shall modify the level of the initial capital of the management company by order of the chairman.(8) The reference exchange rate referred to in this Article shall be that for the date of reporting. Section 4 Authorization, suspension, and withdrawal of authorizationArticle 58
(1) The management company may be authorized by the NSC, if it satisfies simultaneously the following conditions:a) the firm is established as a joint-stock company and includes in its name the words societate de administrare a investi�iilor or the abbreviation S.A.I.;b) the registered office and the head office, as appropriate, representing the principal place of business of the management company, are situated in Romania;c) the qualification, experience, and professional integrity of the members of the board of directors, executive management, internal auditors which are not members of the Financial Auditors Chamber of Romania and personnel of the internal control department comply with the requirements laid down in the regulations of the NSC;d) it presents the shareholders structure and provides proof of the identity and integrity of the qualifying shareholders;e) produces evidence of the existence of the initial capital, subscribed and fully paid-up in cash as set out by NSC regulations;f) presents the business plan, description of the organizational arrangements and of the internal regulations of the firm;g) presents the contract concluded with a financial auditor, which is a member o the Financial Auditors Chamber of Romania and satisfies the common criteria laid down by the NSC and the Financial Auditors Chamber of Romania;(2) Where the management company has close links with other natural or legal persons, the NSC is entitled to grant authorization only if such links do not prevent the exercise of its supervisory functions.(3) The NSC shall not grant authorization if the laws, regulations, or administrative provisions of a State that is not a member of the European Union governing one or more natural or legal persons with which management company has close links, prevent the exercise of its supervisory functions.(4) Authorization may be denied where, although the conditions referred to in par. (1) are met, it is believed that the prudential supervision may not be ensured.(5) The NSC shall grant the operation authorization within maximum six months from the date of filing the complete documentation required by the regulations in force or shall issue, in the event of rejection of application, a motivated decision that may be contested within 30 days from the date of its communication.(6) The management company may commence activity on the date of authorization, save for the activity referred to in Art. 54 par. (3) let. a), which is also subject to the management company's becoming a member of the Investor-Compensation Fund.(7) The management company is required to comply with the authorization requirements, prudential and capital adequacy requirements as laid down by this Law and by the regulations of the NSC during the entire period of activity and shall notify or subject to pre-authorization, as appropriate, any change in its organization and operation, in accordance with the provisions of the regulations of the NSC.(8) The provisions of Art. 13 shall also apply as appropriate to the management company.Article 59
The NSC is entitled to withdraw the authorization issued to the management company in the following situations:a) the firm does not commence business activity within 12 months from obtaining authorization or does not perform any of the activities authorized by the NSC, for a time period longer than six months;b) the management company requests the withdrawal of its authorization explicitly;c) it does not comply with the capital adequacy regulations set out by the NSC;d) it no longer complies with the conditions based on which the authorization has been issued;e) the authorization has been granted based on false or misleading statements or information;f) it has severely and/or systematically infringed the provisions of this Law and/or the regulations issued for the enforcement thereof;g) other situations provided by the regulations of the NSC. Section 5 Management, qualifying shareholders, and internal controlArticle 60
(1) The actual business management of a management company must be ensured by at least two natural persons. The name of these persons as well as of those who substitute them shall be communicated to the NSC.(2) The persons referred to in par. (1) must comply with the requirements in respect of good reputation and experience, according to the type of U.C.I. managed by the management company.Article 61
The provisions of Arts. 18 to 20 shall also apply as appropriate to the management company.Article 62
The management company is required to organize an internal-control department specialised in the control of compliance by the firm and by its personnel with the legislation in force with regard to the capital market as well as with internal regulations.Article 63
The requirements regarding the authorization of the personnel, the organization and functioning of the internal-control department shall be laid down in regulations by the NSC.Chapter II Prudential rulesArticle 64
The management company shall comply at all times with the prudential rules set out by the NSC. These prudential rules shall refer, without being exhaustive, to:a) appropriate procedures in respect of administration and bookkeeping, control and safeguard of electronic data processing, as well as adequate internal-control mechanisms, including rules referring to personal transactions of the employees and of the management company;b) adequate procedures ensuring the separation of the financial instruments belonging to investors, between themselves and from those of the management company, in order to protect their ownership rights, as well as to prevent such financial instruments of being used by the management company for its own account;c) adequate procedures ensuring that the operations performed by the management company could be re-enacted, including in what concerns the involved parties, the time and the place where they have been performed;d) keeping of records of the transactions performed, in order to permit the NSC to monitor the compliance with the prudential rules, rules of conduct in business, as well as other legal and regulatory requirements;e) the existence of organizational arrangements to minimise the risk of a conflict of interests between the management company and investors, among the investors, between the investors and UCITS, or among the UCITSs. Where a branch is set up, its organizational arrangements must not infringe the rules of conduct in order to prevent conflicts of interests, as set out by the host Member State.Article 65
(1) The management company shall operate according to the rules of the fund or to the articles of incorporation of the investment firm and shall not perform transactions for the benefit of certain individual accounts, of other undertakings for collective investment or UCITS, to the detriment of the others.(2) The management company may not perform transactions with the UCITSs and other undertakings for collective investment which it manages.Article 66
(1) A trading company may not perform at the same time the functions of a management company and of a depositary.(2) The management company and the depositary must act independently and only for the interest of the unit holders.Article 67
The management company is required to submit to the depositary all the information concerning the transactions of UCITS before 24:00 hrs. of the working day following the day of the transactions.Chapter III Rules of conductArticle 68
(1) The management companies are required to comply with the rules of conduct issued by the NSC during their entire operation period.(2) A management company is required at least:a) to act honestly, correctly, and with professional diligence to protect the interests of the investors of the UCITSs it manages and the integrity of the market;b) to employ and use efficiently all resources, to draw up and use efficiently the procedures necessary for an appropriate conduct of business;c) to avoid conflicts of interests and, if they cannot be avoided, ensure that the UCITSs it manages benefit from a correct and fair treatment;d) to comply with all relevant requirements of the NSC, in order to promote the interests of the investors and the integrity of the market.(3) The voting rights relating to the financial instruments held by the UCITSs shall be exercised by the management company for the interest of the unit holders.Chapter IV DepositaryArticle 69
The depositary is the credit institution in Romania, authorized by the National Bank of Romania in accordance with the banking legislation, or the branch in Romania of a credit institution authorized in a Member State, agreed by the NSC to conduct depository activities, in accordance with the provisions of this Law, which is entrusted with all the assets of a UCITS for safekeeping.Article 70
The depositary must:a) ensure that the sale, issue, redemption, or cancellation of units are conducted by the management company or by another entity on behalf of the UCITS, in accordance with this Law, NSC regulations, and fund rules/articles of incorporation of the investment company;b) ensure that the value of units is calculated in accordance with the fund rules/articles of incorporation of the investment company and with the provisions of this Law;c) comply with the instructions of the management company or of the self-managed investment firms, save for the case they are contrary to the legislation in force or to the fund rules/articles of incorporation of the investment company;d) ensure that, in the transactions involving the assets of the UCITS, any amount is settled within the time set out;e) ensure that the income of the UCITS is managed and calculated in accordance with the legislation in force, regulations of the NSC, and fund rules/articles of incorporation of the investment company.Article 71
In order to obtain approval of the NSC, the credit institution must provide the NSC with documents and evidence to prove that:a) it has sufficient financial resources, as required by the regulations of the NSC;b) it has an adequate management structure;c) it has the professional abilities required to adequately perform depository activities.Article 72
(1) The depositary may be held responsible by the management company, investment firm, and unit holders for any loss sustained by them as a result of its inappropriate performance or non-performance of its obligations.(2) The liability of the depositary towards the investors may be invoked by the unit holders, directly or indirectly, through the agency of the management company, depending on the nature of the relationship between the three parties.(3) A depositary may place with a third party, acting as sub-depositary, part of the assets of a UCITS, according to the regulations issued by the NSC.(4) The activities assigned to third parties under par. (3) shall be performed in compliance with the same arrangements as applicable to the depositary.(5) The liabilities of the depositary, as referred to in par. (3), shall not be affected by the fact that it has entrusted to a third party all or part of the assets it had for safekeeping.Article 73
(1) The publication and use of other measures or calculations of the net asset value, net asset value per unit, and number of unit holders, except for those certified by the depositary shall be forbidden.(2) The deposited assets of entities must be recorded in accounts separated among themselves and from those of the depositary.Article 74
The conditions for the replacement of the depositary and the rules to ensure protection of the unit holders shall be set out by the rules of the fund, respectively the articles of incorporation of the investment firm, in accordance with the regulations of the NSC.Article 75
The depositary is required to inform the NSC immediately of any abuse by the management company in relation to the deposited assets of the UCITS.Chapter V Undertakings for collective investment in transferable securities Section 1 General provisionsArticle 76
(1) The UCITSs are open-end investment funds and investment companies, which simultaneously satisfy the following requirements:a) their sole object is the collective investment by placing monetary resources in liquid financial instruments referred to in Art. 101 par. (1) and they operate based on the principles of risk-spreading and prudential management;b) upon request of the holders, the units shall be redeemable on a continuous basis out of the assets of such undertakings. The action taken by the UCITS to ensure that the value of its units on a market does not vary significantly from their net asset value per unit may be regarded as equivalent to such redemption.(2) The UCITSs are set up either as open-end funds, under civil contract, or as investment companies according to the articles of incorporation.Article 77
The UCITSs shall be prohibited from transforming themselves into other types of undertakings for collective investment.Article 78
Any undertaking for collective investment may transform itself into a UCITS in compliance with the provisions of this Law and the regulations issued by the NSC.Article 79
The self-managed investment companies, the management company, and the depositary, which act on behalf of a UCITS, may not perform short sales of transferable securities or other financial instruments as referred to in Art.101, par. (1), lets. d), f), and g).Article 80
(1) No self-managed investment firm, management company, or depositary acting on behalf of a UCITS may take up loans.(2) By way of derogation, the NSC may authorize a UCITS to borrow up to 10% of its assets.(3) A UCITS may acquire foreign currency, including by means of a "back-to-back" loan.(4) Without prejudice to the application of Art. 101 and Art. 103, an investment company, a management company, or a depositary acting on behalf of a UCITS may not grant loans or act as guarantor on behalf of a third party.(5) The provisions of par. (4) shall not prevent such undertakings from acquiring transferable securities or other financial instruments referred to in Art. 101 par. (1) lets. d), f), and g), which are not fully paid.Article 81
(1) A UCITS units shall be issued only if the equivalent of the net issue price is paid into the assets of the UCITS.(2). The redemption price of the units of a UCITS shall be calculated on the date of receipt of the redemption application. The payment shall be made within a reasonable time limit, but no later than 10 working days from the date of filing the application.Article 82
The creditors of a management company, depositaries, or sub-depositaries may not enforce procedures against the assets of a UCITS, including in the case of insolvency proceedings. Section 2 Authorization of undertakings for collective investment in transferable securitiesArticle 83
(1) A UCITS shall conduct business based on the authorization issued by the NSC, in accordance with this Law and the regulations issued for its enforcement.(2) A UCITS shall be authorized subsequent to the approval by the NSC of the management company, the fund rules, or, as appropriate, the articles of incorporation of the investment company, the choice of depositary, and the prospectus.(3) The NSC shall issue regulations with respect to the content of the rules of an open-end fund and of the articles of incorporation of an investment company, which shall take into consideration at least the following:a) the modalities for the issue, sale, redemption, and cancellation of units;b) the calculation of net asset value per unit;c) the identity of the management company and of the depositary and the relationship between these parties and the investors;d) the requirements for the replacement of the management company and depositary and the rules for ensuring the protection of the investor in such situations;e) the management fees charged by the management company and the expenditures which the management company is entitled to incur on behalf of the UCITS, as well as the methods for their calculation.(4) The NSC is entitled to deny authorization of a UCITS if the persons in the actual management of the depositary do not have the required worthiness or experience in order to perform activities specific to that type of UCITS. The identity of such persons as well as of their successors in office must be communicated immediately to the NSC.(5) Authorization may be denied if it is considered that the prudential management cannot be ensured.Article 84
The requirements based on which the NSC granted the authorization must be maintained during the entire existence of a UCITS. Any change shall be subject to prior authorization by the NSC.Article 85
(1) The NSC shall grant the authorization to a UCITS as well as the authorization for the initiation and carrying on of the continuous public offer of units within maximum 30 days from the receipt of the complete documentation required according to the regulations in force or, in case of rejection of the application, shall issue a motivated decision.(2) The open-end funds and investment companies that have been authorized shall be registered with the Register of the NSC.(3) The management company must mention the Register number referred to in paragraph. (2) on all its deeds, documents, and correspondence the management company issues or initiates on behalf of the UCITS managed by it.Article 86
(1) The prospectus and the simplified prospectus must contain the necessary information in order for investors to be able to make an informed assessment of the investment proposed to them and, particularly, of the risks involved. The prospectus shall include a clear and meaningful description of the risk profile of the fund, irrespective of the instruments invested in.(2) The NSC shall issue regulations with respect to the minimum content and the format of the prospectus and of the simplified prospectus. The insertion into the prospectus of the information included in the fond rules or in the articles of incorporation, attached to the prospectus, is not mandatory.(3) The simplified prospectus is part of the prospectus and may be detached from it.(4) The simplified prospectus must be offered to subscribers free of charge before the conclusion of the contract. In addition, the prospectus and the latest published annual and half-yearly reports, as published in accordance with Art. 107, shall be supplied to the investors free of charge upon their request.(5) Any person subscribing units shall make a statement confirming that they have received, read, and understood the prospectus.(6) The essential elements of the prospectus and of the simplified prospectus of the UCITS must be updated with regard to all changes that appear, in accordance with the regulations issued by the NSC.Article 87
In order to ensure the correct information of the public, the NSC may, at any time, request a UCITS to change the information in the prospectus and simplified prospectus. Section 3 Open-end investment fundsArticle 88
The rules of the open-end investment fund are part of the prospectus and must be attached to it.Article 89
(1) The fund units issued by open-end investment funds shall be of one type only, registered, and dematerialised, and shall confer equal rights to their holders. The fund units shall be paid in full at the time of subscription.(2) The participation in an open-end investment fund shall be certified by a certificate that confirms the holding of fund units.Article 90
The open-end investment funds shall not issue financial instruments other than fund units.Article 91
(1) The fund units shall be purchased at their issue price. The issue price shall be computed based on the net asset value, as certified by a depositary and valid on the day of purchase.(2) The fund units may be redeemed, at the price established based on the net asset value, as certified by the depositary and valid on the day of the redemption application.(3) The net asset value and the fund unit value of an open-end investment fund shall be published on a day-to-day basis by the management company for each working day, based on the data certified by the depositary.(4) The NSC shall issue regulations regarding the calculation of the net asset value and the net asset value per unit. Section 4 Investment companiesArticle 92
(1) An investment company shall issue registered shares fully paid at the time of subscription.(2) An investment company may not conduct activities other than those referred to in Art. 76 par. (1).(3) The investment companies may manage only their own assets and may not, under any circumstances, be mandated to manage assets for the benefit of a third party.Article 93
An investment company shall be managed by a management company authorized in accordance with the provisions of this Law or by a board of directors, in accordance with the articles of incorporation.Article 94
(1) The initial capital of a self-managed investment company shall be calculated in accordance with the regulations of the NSC and shall be at least equal to the ROL equivalent of EUR 300,000, calculated at the reference rate communicated by the National Bank of Romania.(2) By 31 December 2004, the self-managed investment companies are required to increase and maintain their initial capital to at least the ROL equivalent of EUR 100,000, calculated at the reference rate communicated by the National Bank of Romania.(3) By 31 December 2005, the self-managed investment companies are required to increase and maintain their initial capital to at least the ROL equivalent of EUR 200,000, calculated at the reference rate communicated by the National Bank of Romania.(4) By 31 December 2006, the self-managed investment companies are required to increase and maintain their initial capital to at least the ROL equivalent of EUR 300,000, calculated at the reference rate communicated by the National Bank of Romania.(5) In order to comply with the requirements set out in the Community legislation, the NSC shall change on a regular basis, by means of order of the chairman, the level of the initial capital of a self-managed investment company.(6) The reference exchange rate referred to in this Article shall be that on the day of reporting.Article 95
The changes due to the issue and redemption of shares during each financial year shall be effected by way of derogation from the Law no 31/1990 and shall be registered with the Trade Register Office, annually, within maximum 30 days from the approval of the financial statements.Article 96
(1) The NSC shall issue regulations with respect to the requirements to be met and the procedures for the authorization of an investment company, the minimum content of its articles of incorporation and of the management contract.(2) The articles of incorporation of the investment company are part of the prospectus, being annexed thereto.Article 97
(1) The self-managed investment companies shall comply with the provisions of this Law, which apply to the management company and are referred to in Art. 55, Art. 58 par. (1), lets. b), c), e), f), g), h) and pars. (2) and (3), Arts. 59 to 61, Art. 66, Art. 69, Art. 83, pars. (2) and (4), as well as the requirements established by the regulations of the NSC.(2) By way of derogation from Art. 85 par. (1), the NSC shall grant the authorization within six months from receiving the complete documentation as provided by the regulations or shall issue, in the event of rejection of the application, a motivated decision, which may be contested within 30 days from its communication.(3) The authorization may be denied or withdrawn if, despite the fact that the conditions set out in pars. (1) and (2) as well as the regulations of the NSC are met, the prudential management cannot be ensured.(4) The NSC shall be entitled to withdraw the authorization of an investment company under the conditions set out in Art. 59.Article 98
The provisions of Art. 23, Art. 64, and Art. 68 shall also apply to the self-managed investment companies, in accordance with the regulations of the NSC.Article 99
(1) The investment companies are required to request the admission to trade on a regulated market, within 90 working days from authorization.(2) The shares of an investment company may be redeemed at any time, by appropriately applying the provisions of Art. 81 and Art. 91 par. (2).Article 100
(1) The general assembly of the shareholders shall take place according to the provisions of the Law no. 31/1990, of this Law, and of the regulations of the NSC.(2) By way of derogation from the provisions of Art. 121^1 of the Law no. 31/1990, the shareholders of an investment company may vote by mail, or may be represented in the general assembly of the shareholders by persons other than the shareholders except for the administrators, based on authenticated proxies. The NSC shall issue regulations with regard to such procedure.(3) If the vote is sent by post, the convocation of the general assembly of the shareholders shall include the whole text of the resolution submitted for approval. The convocation must be published at least 30 days before the general assembly of the shareholders in a national daily newspaper.(4) The votes sent by post and annulled due to non-compliance with the procedure drawn up by the NSC shall not be taken into account when the item in the agenda they refer to is adopted, but shall be taken into account when calculating the quorum of the general assembly of the shareholders.(5) The resolution submitted for approval by the general assembly of the shareholders shall be drawn up and voted during the general assembly of the shareholders in a form that is identical with the whole text of the resolution published in accordance with the provisions of pars. (2) and (3). Section 5 The investment policy of undertakings for collective investment in transferable securitiesArticle 101
(1) The investments of a UCITS shall be directed only to:a) transferable securities and money market instruments listed or traded on a regulated market, as defined in Art. 125, in Romania or in a Member State;b) transferable securities and money market instruments admitted to the official listing of a stock exchange in a non-Member State or traded on another regulated market in a non Member State which operates regularly and is recognised and open to the public, provided that the choice of the stock exchange or regulated market is approved by the NSC or is specified by the fund rules or articles of incorporation of the investment company, as approved by the NSC;c) newly issued transferable securities, provided that:1. the issue terms include a firm commitment, according to which there shall be applied for the admission to trading on a stock exchange or another regulated market which operates regularly and is recognized and open to the public, provided that the choice of stock exchange or regulated market is approved by the NSC or is specified by the fund rules or articles of incorporation of the investment company, as approved by the NSC;2. such admission is ensured within maximum one year of the issue;d) units of the UCITS and/or other undertakings for collective investment, as defined in Art. 76, par. (1), lets. a) and b), authorized in Member and non-Member States, provided that the following conditions simultaneously met:1. the other undertakings for collective investment are authorized in compliance with laws providing that they are subject to supervision considered by the NSC as equivalent to that in the Community legislation, and the cooperation between the NSC and the competent authority of the home Member State is sufficiently ensured;2. the level of protection of investors in such other undertakings for collective investment is equivalent to that of the investors in UCITS and, particularly, the rules on segregation, loans, and short-sales positions in transferable securities and money market instruments are equivalent to the provisions of this Law;3. the activities of other undertakings for collective investment are subject to half-yearly and annual reports to enable an assessment of the assets and liabilities, income and operations over the reporting period;4. maximum 10% of the total assets of the other UCITS and/or other undertakings for collective investment where investments are intended may, according to the fund rules or articles of incorporation thereof, be invested in units issued by other UCITS and other undertakings for collective investment;e) deposits with credit institutions, which are reimbursable at order or confer the right to be withdrawn, with a maturity not exceeding 12 months, where the credit institution has its registered office in Romania or in a Member State, or, if the registered office of the credit institution is situated outside the European Union, where such deposits are subject to prudential rules considered by the NSC as equivalent to those issued by the European Union;f) derivatives, including those that involve the final settlement of funds, traded on a regulated market as defined in lets. a) and b) and/or derivatives negotiated off the regulated market, provided that the following conditions are simultaneously met:1. the underlying asset consists of instruments covered by this paragraph, financial indices, interest rate, and foreign exchange rate in which the UCITS may invest according to its investment objectives as set out in the fund rules or articles of incorporation;2. the counterparties in the off-regulated market trading are institutions, subject to prudential supervision, that fall under the categories approved by the NSC;3. the derivatives traded off the regulated market shall be subject to a reliable and verifiable daily assessment and may be sold, liquidated, or the position closed at any time at their fair value by an offsetting transaction at the initiative of the UCITS;g) money-market instruments, other than those traded on a regulated market, which are liquid and have a value that may be precisely determined at any time, provided the issue or issuer is subject to regulations referring to the protection of investors and their savings, provided that they are:1. issued or guaranteed by a central, local, or regional administrative authority or central bank of a Member State, by the European Central Bank, by the European Union, or by the European Investment Bank, by a non-Member State or, in the case of federal states, by one of the members of the federation, or by an international public organization of which one or more Member States are part, or2. issued by an organization whose securities are traded on the regulated markets referred to in lets. a) and b), or3. issued or guaranteed by an entity, subject to prudential supervision, in accordance with the criteria defined by Community legislation, or by an entity that is subject to and complies with prudential rules considered by the NSC to be at least as stringent as those laid down by Community legislation, or4. issued by other entities belonging to the categories authorized by the NSC, where the investments in such instruments are subject to investor protection, equivalent to that set out in points 1, 2, and 3, and where the issuer is a company whose capital and reserves amount to at least EUR 10,000,000, which presents and publishes its annual accounts, in accordance with the Community legislation in force, or an entity that, within a group of companies that includes one or several listed companies, is the financer of the group or is an entity that is dedicated to financing the securitisation vehicles, which benefits from a bank facility line.(2) The money market instruments referred to in par. (1) are liquid, and their value can be accurately determined at any time.(3) The limits regarding the type of instruments in which investment is to be made and the maximum weight of investments of a certain category shall be set out by regulations of the NSC.(4) The distribution or reinvestment of the income of a UCITS shall be performed in accordance with this Law, the fund rules, or the articles of incorporation of the investment company.(5) Where a UCITS invests in the units of other UCITSs and/or other undertakings for collective investment that are managed, directly or by mandate, by the same management company or by any other company to which the management company is linked by joint management or control or by a substantial direct or indirect holding, that management company or other company may not charge purchase or repurchase fees on account of the investment of the UCITS in the units of other UCITSs and/or other undertakings for collective investment. A UCITS that invests a substantial fraction of its assets in other UCITSs and/or other undertakings for collective investment shall indicate in its prospectus the maximum management fees, which may be charged to the UCITS in question and to the other UCITSs and/or other undertakings for collective investment where it plans to invest. Its annual report shall show the maximum management fee charged both to its assets and to the assets of the UCITS and/or other undertakings for collective investment in which it invests.Article 102
(1) By way of derogation from the provisions of Art. 101:a) a UCITS may invest maximum 10% of its assets in transferable securities and money-market instruments, other than those referred to in Art. 101;b) an investment company may acquire only those movable or immovable assets that are necessary for the carrying on of its business;c) a UCITS may not invest in precious metals or in securities representing title to such precious metals.(2) A UCITS may hold liquidities in cash or in current accounts, provisionally and within the limits provided by the regulations of the NSC.Article 103
(1) The management company and the self-managed investment company must use a risk-management system that shall enable them:a) to monitor and measure at any time the risk carried by their positions and their influence to the overall risk profile of the portfolio;b) to ensure an accurate and independent assessment of the value of derivative instruments, which are traded off the regulated market.(2) The management company and the investment company must inform the NSC, on a regular basis and in accordance with the detailed rules defined by them, of the types of derivative instruments, risk of the underlying assets, quantitative limits, and methods selected to estimate the risk associated to the transactions involving derivative instruments, for each managed UCITS.(3) The NSC may authorize a UCITS to use techniques and instruments relating to transferable securities and money-market instruments under the conditions and within the limits laid down by regulations if such techniques and instruments are used with a view to an efficient and prudential management of its portfolio. Where such operations involve the use of derivative instruments, the conditions and limits shall observe the provisions of this Law and of the regulations of the NSC.(4) Under no circumstances shall the operations referred to in par. (3) determine a UCITS to divert from its investment objectives laid down by the fund rules, articles of incorporation, or prospectus.(5) A UCITS shall ensure that its overall exposure relating to derivative instruments does not exceed its total net asset value.(6) The exposure shall be calculated by taking into consideration the current value of the underlying asset, counterparty risk, market trend, and time left until the closure of the position.(7) A UCITS may invest, as part of its investment policy and within the limits laid down by the regulations of the NSC with respect to the investments in transferable securities and money-market instruments, in derivatives, provided that the risk exposure of the underlying asset does not exceed the aggregated limits, as laid down by the regulations of the NSC, in accordance with the Community legislation.Article 104
(1) When exercising the subscription rights relating to the financial instruments that are included in its assets, the UCITS shall not be required to comply with the limits laid down by the regulations of the NSC.(2) If the holding limits are exceeded on grounds that are independent of the control of a UCITS or as a result of the exercise of the subscription rights, such UCITS must adopt, as prime objective for its sales transactions, measures for the remedy, as soon as possible, of that situation in accordance with the regulations of the NSC and observing the interests of unit-holders. Section 6 Rules of transparency and publicityArticle 105
Any publicity related to a UCITS shall be permitted only in accordance with the regulations of the NSC with regard to the content and structure of such publicity, with a view to ensure transparency and correctness of the information.Article 106
All publicity must mention the existence of the prospectuses, as well as the modalities for obtaining them.Article 107
(1) The management company, for each managed UCITS, and the self-managed investment companies must publish and submit to the NSC the following documents:a) the prospectuses;b) the simplified prospectuses;c) the annual report;d) the half-yearly report;e) the regular reports regarding net asset value and the net asset value per unit, in accordance with the regulations of the NSC.(2) The reports referred to in par. (1) let e) shall be sent, free of charge, upon the request of the investors. All reports shall be filed with the NSC within the terms and under the conditions set out by regulations.(3) The annual and half-yearly reports must be published within the following time limits, which start at the end of the period to which they refer:a) four months for the annual report;b) two months for the half-yearly report.(4) The annual and half-yearly reports shall be provided free of charge upon request of unit-holders and shall be made available for them in the locations determined and under conditions specified by the NSC or through other means approved by it, as specified in the prospectus and simplified prospectus.(5) The annual report must include a balance-sheet or an assessment of assets and liabilities, a detailed profit and loss account for the financial year, a report on the activities in the current financial year, as well as other relevant information, which shall enable investors to make an informed judgment on the activities of the UCITS and its results, as set out by the regulations of the NSC.(6) The half-yearly report must include the information laid down by regulations of the NSC, issued in accordance with the relevant Community legislation. Art. 108 - The financial statements and the statements on the operations provided for in the annual report must be audited by financial auditors, according to the provisions of Art. 258. Section 7 Special provisions applicable to Member-States UCITSs which market their units in RomaniaArticle 109
(1) A UCITS of a Member State may market its units in Romania if it has previously informed the NSC and in compliance with the rules regarding publicity laid down in Arts. 105 and 106.(2) Simultaneously, these UCITSs must send NSC the following documents:a) an attestation issued by the competent authorities of the home Member State to the effect that it satisfies the conditions under the national law, harmonized with Community legislation;b) the fund rules or articles of incorporation;c) the prospectus and simplified prospectus;d) the latest annual and half-yearly reports;e) the details regarding the arrangements made on the marketing of the units and the procedures to pay unit-holders, redeem units, and send the information the UCITSs are required to provide.(3) A UCITS may begin to market its units in Romania within two months after the informing under par. (1) except for the case where the NSC and the competent authority of the home Member State establish that the arrangements made for the marketing of units do not comply with the provisions of par. (1).(4) The UCITSs that market units in Romania must comply with the laws, regulations, and administrative provisions in force, other than those laid down by this Law.(5) A UCITS that markets units in Romania may use the same name as used in the home Member State. Where the NSC considers that the name is likely to give rise to confusion, it may require that the name be accompanied by certain explanatory particulars.Article 110
(1) A UCITS that markets units in Romania must provide the investors and the NSC, in accordance with the procedures applicable in the home Member State, with the prospectus and simplified prospectus, the updated fund rules or the articles of incorporation, the annual report and the half-yearly reports.(2) The documents referred to in par. (1) and in Art. 109 must be provided in Romanian or in one of the official languages agreed by the NSC.(3) The NSC may authorize the marketing of units of the UCI of a Member State, which are not subject to mutual recognition, establishing the relevant conditions according to the Community legislation. Section 8 Free movement of servicesArticle 111
The management company may carry on activities of management of investments:a) in a Member State, in accordance with the provisions of Art. 112;b) in a non-Member State, in accordance with the relevant regulations of the NSC.Article 112
(1) The provisions laid down in Art. 38 par. (1), par. (2), par (3) let. a), and par. (4), Art. 39 and Art. 40 pars. (1) to (3) shall be applied as appropriate to the management companies referred to in Art. 111 let. a).(2) The provisions laid down in Arts. 41 and 42 shall be applied as appropriate to the management companies of the Member States.(3) The provisions laid down in Art. 43 shall be applied as appropriate to the management companies in the non-Member States.(4) The NSC shall issue regulations for the enforcement of this section.Article 113
(1) A UCITS that markets units on the market of another Member State must comply with the laws, regulations, and administrative provisions in force in that State, which do not fall within the fields covered by the legislation applicable to the UCITS.(2) Any UCITS may advertise its units in the Member State in which they are marketed, in compliance with the national laws governing advertising.(3) The provisions referred to in pars. (1) and (2) must be applied without discrimination.(4) In the cases referred to in pars. (1) to (3), the UCITS must, inter alia, in accordance with the laws, regulations, and administrative provisions in force in the Member State of marketing, take the measures necessary to ensure that facilities are available in that State for making payments to unit-holders, redeeming units and making available the information which UCITSs are obliged to provide.Chapter VI Collective investment undertakings, other than UCITS Section 1 General provisionsArticle 114
(1) The provisions of this Chapter shall be applicable to other undertakings for collective investments that accept public financial resources from natural and/or legal persons and are established as:a) closed-end investment funds, which are set up under the law of contract and which must redeem units at pre-established intervals or at certain dates, according to their articles of incorporation;b) closed-end investment companies, which are set up through the articles of incorporation, issue a limited number of shares, and are traded on a market.(2) The other undertakings for collective investments referred to in par. (1) are required to register with the NSC and comply with the rules laid down in this Chapter.(3) The other undertakings for collective investments registered with the NSC shall place their assets with a depositary, in accordance with the provisions of Chapter IV of this Title.(4) The provisions of Art. 64, Art. 65 par. (2), Art. 68, Art. 70 lets. b) to d), Art. 72, Art. 74, and Art. 82 shall be applied as appropriate to the other undertakings for collective investments.(5) The other undertakings for collective investments shall be prohibited from marketing units publicly if they do not comply with the provision laid down in par. (2).Article 115
(1) The other undertakings for collective investments that accept private financial resources and are managed by a management company shall be subject to the provisions of Art. 114 par. (2).(2) The other undertakings for collective investments that accept private financial resources and are not managed by a management company shall lay down rules regarding the policy with respect to investment, business conduct, and transparency in their articles of incorporation.(3) The documents issued by the other undertakings for collective investments referred to in par. (2) must contain an explicit warning to the effect that the provisions of this Title are not applicable to such undertakings.(4) The other undertakings for collective investments referred to in par. (2), which are traded on a regulated market, shall be subject to the provisions of Title VI.Article 116
(1) The NSC shall issue regulations specific to each type of other undertakings for collective investment regarding:a) the minimum content of the articles of incorporation;b) the investments allowed and their applicable limits;c) the value of the issue or the nominal value of a unit, as the case may be, or/and the value of an investor's individual investment;d) rules for dealing in units;e) requirements in respect of qualification, professional experience, and integrity for the members of the management bodies of a self-managed other undertaking for collective investment.(2) The NSC shall issue regulations that are common to the closed-end investment funds and closed-end investment companies regarding:a) transparency, information, and reporting obligations;b) rules of conduct;c) rules on the marketing on the territory of Romania of units issued by the undertakings for collective investment of the Member States and non-Member States, which are not harmonized;d) method of calculation the net asset value. Section 2 Closed-end investment fundsArticle 117
(1) The closed-end investment funds registered with the NSC shall be managed by a management company.(2) The provisions laid down in Art. 89 and Art. 90 shall be applied as appropriate to closed-end investment funds. Section 3 Closed-end investment companiesArticle 118
A closed-end investment company registered with the NSC shall be managed by a management company or by a board of directors.Article 119
(1) The provisions laid down in Art. 92 par. (1) and par. (3), Art. 99 par. (1), and Art. 100 shall be applied as appropriate to closed-end investment companies.(2) The closed-end investment companies may redeem their own shares under the terms laid down in the Law no. 31/1990 and in accordance with the regulations of the NSC. Section 4 Investment companiesArticle 120
(1) The provisions of this Chapter referring to the closed-end investment companies registered with the NSC shall also be applied as appropriate to the investment companies established according to the provisions of the Law no. 133/1996 on transformation of the Private Property Funds into investment companies, hereinafter referred to as investment companies.(2) The NSC shall issue regulations with respect to the minimum content of the articles of incorporation of an investment company, which shall include at least the following:a) rules on issuing, holding, and selling shares;b) method of calculation the net asset value;c) prudential rules regarding the investment policy;d) conditions for the replacement of the depositaries and rules to ensure the protection of shareholders in such situations;e) rules regarding the remuneration of administrators and the scale of administrative expenditures, in the case of investment companies that are not self-managed;f) identity, requirements regarding the qualification, professional experience, and integrity of the members of the management bodies.(3) The shares of an investment company shall be traded on a regulated market.(4) By way of derogation of the provisions of Art. 114, par. (1), let. b), regarding the issuing of a limited number of shares, the increase of the share capital of an investment company shall be performed only by public offer of shares, based on a prospectus approved by the NSC, in accordance with the provisions of Title V of this Law and with the Law no. 31/1990.Chapter VII Protection of unit-holdersArticle 121
(1) In exceptional cases and only to protect the interests of the unit-holders, the self-managed investment companies and the management company acting in the name of a UCITS may temporarily suspend the redemption of units, with the observance of the provisions of fund rules, articles of incorporation of the investment company, and regulations of the NSC.(2) For the protection of the public interest and of investors, the NSC may decide the temporarily suspension or the limitation of the issue and/or redemption of units of an undertaking for collective investment.(3) The deed of suspension shall specify the terms and the reasons for suspension. The suspension may be extended beyond the expiry of the initially established term if the reasons for suspension still persist.(4) In the cases mentioned in par. (1), a UCITS must communicate immediately its decision to the NSC and to the competent authorities of the Member States in which it markets its units.Article 122
(1) The provisions of Art. 21 shall be applied as appropriate to the other undertakings for collective investment, management company, and self-managed investment companies.(2) The NSC shall be entitled to suspend a an administrator if it is ascertained that the influence exercised by him may be prejudicial to the management of that other undertaking for collective investment, management company, or investment company authorized by the NSC.Article 123
The NSC shall issue regulations regarding the merger and division of a management company, UCITS, and other undertaking for collective investment. Title IV The regulated markets for financial instruments and the central depositaryChapter I Regulated markets Section 1 General provisionsArticle 124
(1) The regulated markets for financial instruments shall be set up and managed by a legal person constituted as a joint-stock company, issuer of registered shares in accordance with the Law no. 31/1990, authorized and supervised by the NSC, hereinafter referred to as market operator.(2) The NSC shall publish in the Official Gazette of Romania, Part I, any decision regarding the granting/withdrawal of the authorization of a market operator.(3) The market operators authorized to function in Romania shall be recorded with the NSC register.(4) The list of authorized regulated markets shall be communicated to the Member States as well as to the European Commission, together with the regulations, instructions, and procedures regarding the operations on these markets, as well as any subsequent changes thereof.(5) The company that manages a regulated market shall be qualified to sue and be sued in respect of any rights and obligations, claims and complaints related to the activity of the administered markets.Article 125
A regulated market is a trading system for the financial instruments defined in Art. 2, par. (1) point 11, which:a) functions regularly;b) is characterised by the fact that the regulations issued or approved by the NSC define the conditions for the operation of the market, the conditions for access to the market and the conditions governing the admission to trading of a financial instrument;c) complies with all the transparency and reporting requirements to ensure the protection of the investors as laid down by this Law, as well as the regulations issued by the NSC in accordance with the Community legislation . Section 2 Authorization, functioning, and withdrawal of authorization of a market operatorArticle 126
(1) The requirements and the documents that must accompany the authorization application as well as the procedure for the authorization of the market operator shall be established by regulations of the NSC and shall mainly refer to:a) the minimum share capital of the joint-stock company and the financial resources necessary to carry on the activity;b) the exclusive object, which is the management of regulated markets for financial instruments plus ancillary activities related to it;c) the shareholder structure, identity, and integrity of the shareholders that hold 5% of the voting rights;d) the business plan, organizational structure, and the internal regulations;e) the requirements in respect of qualification and professional expertise that must be met by managers and by the personnel filling management positions within the market operator;f) technical equipment and resources;g) the contract concluded with a financial auditor, member of the Financial Auditors Chamber of Romania, which satisfies the common criteria set out by the NSC and the Financial Auditors Chamber of Romania.(2) The requirements based on which the authorization is granted must be met during the entire functioning of the market operator. Any changes in these requirements must be authorized in advance by the NSC.(3) The market operator may not limit the number of persons with access to the regulated market managed by it.Article 127
The application for authorization of the market operator shall be rejected, if required, where:a) the documentation submitted is not drawn up according to the regulations in force or the data provided is incomplete or incorrect;b) the documentation submitted is insufficient as to establish if the market operator will carry on its activity according to the regulations in force;c) the administrators and the managing personnel of the market operator do not have the qualification and professional experience adequate to their position, according to the regulations of the NSC;d) the market transparency, proper carrying out of transactions, and investors protection are not ensured;e) the provisions of this Law or of the regulations of the NSC are not complied with.Article 128
The NSC shall be entitled to withdraw the authorization of a market operator:a) if the market operator does no longer comply with the conditions based on which the authorization has been granted;b) if the market operator has not exercised the corporate purpose for which it has been authorization for more than six months;c) if the authorization has been obtained based on false or misleading statements or information;d) if the market operator has infringed the provisions of this Law or of the regulations issued by the NSC;e) in case of merger or division;f) upon request thereof.Article 129
(1) No shareholder of a market operator may hold, directly or indirectly, more than 5% of the total voting rights.(2) Any share acquisition of the market operator, which leads to the holding of more than 5% of the total voting rights, shall be notified to the market operator within the term established by the regulations of the NSC and shall be subject to prior approval by the NSC.(3) Any conveyance of shares of the market operator shall be notified to the market operator and to the NSC within the term established by the regulations issued by the NSC.(4) If the requirements regarding the integrity of the shareholders are not met or if the approval by the NSC is omitted, the voting rights relating to the shares held by not complying with the provisions laid out in pars. (1) and (2) are suspended de jure, followed by the application of the procedure laid down in Art. 291.Article 130
(1) The members of the board of directors of the market operator shall be individually validated by the NSC before starting their mandates.(2) The executive management, their spouses and relatives, as well as their conjugal relatives up to the second degree, inclusively, may not be shareholders, administrators, censors, employees, agents for investment services, representatives of the internal control department for an intermediary or other persons involved with it.(3) The members of the board of directors of the market operator are required to notify in writing the market operator of the nature and the extent of their interest or of the material relations, if:a) they are part of a contract concluded with the market operator;b) they are the administrators of a legal person that is party to a contract concluded with the market operator;c) they have close links or are involved in a material relation with a person that is a party to a contact concluded with the market operator;d) they are in a position that might influence the adoption of a decision at the meetings of the board of directors.Article 131
The market operator must identify and prevent, by its own regulations, any conflicts of interest between it and its shareholders, its administrators, and the regulated market to ensure proper functioning of that market.Article 132
The NSC shall issue regulations to set out the general conditions for transactions in financial instruments that are admitted to trading on the regulated markets of Romania, the procedures for the carrying out of transactions, and the terms within which the involved intermediaries shall report such transactions.Article 133
(1) Market operators shall ensure compliance with the norms regarding transparency and investor protection, in accordance with the regulations issued by the NSC.(2) The regulations, the quotations of the regulated markets, and the volume dealt in are public information and must be made available to the public at least on the web pages of the market operator.(3) In order to allow investors to assess at any time the terms of a transaction they intend to carry out and to subsequently verify the conditions under which it was carried out, the market operator must provide investors with the information specified by the regulations of the NSC, which shall lay down the means, the form, and the term in which this information is to be provided, according to the nature, size, and needs of the regulated market in question and of the investors operating on that market.(4) The market operator must comply with the requirements of the NSC regarding the prevention and identification of market abuse. Section 3 Regulations issued by the market operatorArticle 134
(1) The means for the organization and operation of the regulated market shall be established by regulations of its own, issued by the market operator, adopted by the general assembly of the shareholders and approved by the NSC, in accordance with the provisions of this Law and the relevant Community legislation.(2) The regulations laid down in par. (1) shall establish at least the following:a) the conditions and the procedures for the admission, exclusion, and suspension of trading for intermediaries;b) the conditions and the procedures for the admission, exclusion, and suspension of trading for financial instruments;c) the conditions and the procedures for trading, as well as the obligations of the intermediaries and issuers admitted to trading;d) the professional standards imposed on the persons carrying out transactions on the regulated market;e) the procedures regarding the calculation and the publication of prices and quotations;f) types of permitted contracts and transactions;g) the management and dissemination of public information;h) the contractual standards and the clearing-settlement mechanism used;i) the security and control mechanisms of information systems to ensure the safekeeping of stored data and information, of files and databases, including in extraordinary situations.(3) The competence in approving the regulations laid down in par. (1) and par. (2) lets. b) to g) may be passed on to the board of directors of the market operator.(4) The board of directors is bound to notify the NSC of any breach of this Law, regulations of the NSC, and market rules, as well as of the measures adopted in this respect.(5) The level of fees and prices charged by the market operator shall be approved by the general assembly of the shareholders and notified to the NSC.(6) The market operator may set up an arbitration system to settle disputes between intermediaries and/or issuers whose financial instruments are admitted to trading on the regulated markets managed by that market operator. Section 4 Supervision of regulated marketsArticle 135
(1) The NSC shall supervise the regulated markets in order to ensure transparency, adequate functioning of the trading activity, and investor protection.(2) The NSC shall establish the rules for recording and storing data related to the trading of financial instruments on regulated markets, as well as the terms and conditions for the preservation such information.(3) In exercising its supervision and control powers, the NSC may appoint an inspector whose main duties are:a) monitoring the compliance with the relevant legal regulations;b) attending, without the right to vote, the general assembly of the shareholders and the meetings of the board of directors of the market operator, being able to make comments and require that such comments be included in the minutes of the meeting;c) to have free access to all the premises, all the documents, information and records of the market operator;d) to inform and propose to the NSC measures for any situation acknowledged.(4) The market operator shall provide all the necessary means and conditions in order for the inspector to discharge his duties as set out in par. (3).Article 136
(1) The NSC may require the market operator to submit data, information, and documents, on a regular basis or otherwise, also establishing the time limit within which these shall be submitted.(2) The NSC may require the alteration of the regulations issued by the market operator.(3) The NSC may organize inspections and may adopt the necessary measures regarding that particular market operator.Article 137
(1) The NSC may suspend part or all the transactions in financial instruments if it ascertains non-compliance with the legal provisions and/or it considers that an organized market may not be maintained thus affecting the investors' interests.(2) Any decision of suspension made under par. (1) as well as the underlying reasons shall be immediately made public and shall be published in the Bulletin of the NSC.Article 138
If the authorization of a market operator has been withdrawn, starting with the date mentioned in the decision, no transactions in financial instruments shall be carried out on that market, and the pending orders received by the intermediaries shall become void by law, giving rise to returning of the securities, deposited amounts, and collected fees respectively, the transactions concluded up to that date having to be finalized at their maturity with the intermediaries being held to comply with the clauses of the contracts concluded with their investors. The same measures shall be also applied in the situation referred to in Art. 137 par. (1).Chapter II Alternative trading systemsArticle 139
(1) The alternative trading system may be managed, by way of derogation from Art. 6, by the authorized intermediaries or by the market operator, hereinafter referred to as system operators.(2) The securities that do not meet the requirements for the admission to trading on a regulated market may be traded within an alternative trading system.(3) The system operators shall request the opinion of the NSC in respect of their intention to set up the alternative trading system and shall apply for its approval.(4) The system management, the exhaustive description of its features, and its operation rules shall be submitted for approval by the NSC.(5) The operation rules of the alternative trading system shall at least include the following:a) the trading procedures;b) the procedures referring to the information made available to the participants and the public before and after conclusion of the contract;c) the type and the number of participants as well as the requirements to access the alternative trading system;d) the financial instruments traded.(6) The NSC may require the alteration of the procedures issued by the operator of the alternative trading system.Article 140
(1) The alternative trading system shall be structured so that:a) to ensure the orderly and correct carrying out of transactions;b) to provide to intermediaries non-discretionary access to the alternative trading system and an equal treatment to all participants;c) to guarantee that the procedures applicable to the system are capable to ensure the possibility of obtaining the best price at a given moment;d) to provide sufficient information regarding the orders made and the transactions concluded in accordance with the minimum transparency standards;e) to comply with the requirements of the NSC regarding the prevention and detection of market abuse, the prevention of money laundering and financing of terrorist acts.(2) The participants in the alternative trading system shall be informed by the system operator of their obligations regarding the clearing and settlement of the transactions within the system.Article 141
The system operator shall monitor the observance by the participants of the contracts concluded by them.Article 142
(1) The NSC shall issue general norms regarding the setting up, supervision, and operation of the alternative trading systems.(2) The NSC may appoint an inspector to delegate the supervision and control duties of the alternative trading systems.Chapter III Clearing and settlement of transactions in financial instruments other than derivativesArticle 143
(1) The general conditions regarding the clearing and settlement operations, as well as the gross-settlement operations for transactions in financial instruments other than derivatives, which may take place within the clearing and settlement system, shall be established by the NSC together with the National Bank of Romania and other competent authorities, as the case may be.(2) The provisions of this Chapter shall not be applied to the clearing and settlement systems for the transactions in money-market instruments or in government bonds carried out off the regulated market as defined by this Law, as well as for those carried out within the trading systems authorized by the National Bank of Romania and organized by credit institutions.Article 144
(1) The authorization and supervision of the system referred to in Art. 143 and of the company that manages that system shall be conducted by the NSC together with the National Bank of Romania and other competent authorities, as the case may be.(2) To this effect, the NSC may require the administrators of the clearing and settlement system, the employees of the company that manages the clearing and settlement system, and the participants in the clearing and settlement system to provide the necessary information relating to the clearing and the settlement of transactions.(3) The NSC may conduct inspections at the premises of the company that manages the system for the clearing and settlement of transactions.Article 145
The transfer of the property right over financial instruments other than derivatives takes place on the day of settlement within the clearing and settlement system based on the delivery-against-payment principle.Chapter IV Central depositary Section 1 General provisionsArticle 146
(1) The central depositary is the legal person established as a joint-stock company, issuer of registered shares in accordance with the Law no. 31/1990, authorized and supervised by the NSC, which conducts the operations of depositing securities and any other related operations.(2) The central depositary shall perform clearing and settlement of transactions in securities, in accordance with the provisions of Art. 143.(3) The provisions of this Title shall not be applied to the depositary of government bonds.(4) The issuers for whom depository operations are performed conclude contracts with the central depositary, which also performs registration operations for them, providing information according to the provisions of this Article or upon their request.(5) The central depositary shall provide the issuers with the required information in order for them to exercise the rights relating to the deposited securities, being able to provide services for the fulfilment of the obligations of the issuer towards the holders of securities.(6) In order to determine the shareholder structure of an issuer at a certain reference date, the intermediaries shall report to the central depositary the holders of individualized sub-accounts held by them.(7) The reporting referred to in par. (6) shall be performed as follows:a) for a certain security within three working days from the date of the central depositary's request;b) for any security within three working days from 30 June and 31 December.Article 147
All classes of securities traded on a regulated market or within an alternative trading system shall be compulsorily deposited with the authorized central depositary so that the transactions in securities will be carried out in a centralised manner and a uniform recording of these transactions will be ensured. Section 2 Formation and operation of the central depositaryArticle 148
(1) The conditions, the documents that must accompany the application for authorization, as well as the authorization procedure for the central depositary shall be established by regulations issued by the NSC and shall at least refer to:a) the minimum share capital of the joint-stock company;b) the main corporate purpose and non-core activities that may be conducted;c) structure of shareholders;d) the requirements in respect of integrity, qualification, and professional experience that must be met by administrators and by the individuals filling management positions within the company;e) technical equipment and resources;f) quality of shareholders;g) financial auditors of the company.(2) The conditions based on which authorization is granted shall be met during the entire functioning of the company. Any change shall be submitted to the NSC for prior approval.(3) Until the accession of Romania to the European Union, the central depositary shall not distribute dividends, the profits achieved being mainly used in the development of its own operation systems.Article 149
(1) The regulations regarding the organization and operation of the central depositary shall be submitted for approval by the NSC before the entry into force of such regulations.(2) The level of fees and prices charged by the central depositary shall be approved by the general assembly of its shareholders and notified to the NSC.(3) The members of the board of directors of the central depositary shall be validated individually by the NSC before they start to exercise their mandates.Article 150
(1) The shareholders of the central depositary may not hold more than 5% of the voting rights, except for the market operators, which may hold up to 75% of the voting rights, subject to the approval of the NSC.(2) Any acquisition of shares by the central depositary that will have as an outcome a holding of 5% of the total voting rights shall be submitted to the NSC for prior approval.(3) Any sale of shares shall be notified to the NSC within the time limit set out in the regulations issued by the NSC.(4) Where the requirements regarding the integrity of the shareholders are not satisfied or obtaining the approval of the NSC is omitted, the voting rights underlying the shares held consequent to non-compliance with the above-mentioned requirements shall be suspended de jure, the procedure laid down in Art. 283 being applicable.Article 151
(1) The accounts for securities opened with the central depositary in the name of the intermediaries shall be recorded so that the securities held for the own account are separated from those held for the account of the investors.(2) The intermediaries are required to maintain individualized sub-accounts for the securities held for the account of investors and make a daily record of holdings in their own register, broken down on investors and on classes of securities.(3) The central depositary shall be directly responsible for ensuring the coherence on a daily basis of the volume of securities recorded in the accounts for securities and the volume of securities issued.(4) The creation of security interest in the securities deposited shall be performed by recording the details of the security in the account of the owner of securities. The records shall include the amount of securities pledged, the secured obligation, and the identity of the creditor.(5) The collateral security in relation to securities shall be constituted by rendering them unavailable at the central depositary unless the parties establish otherwise under the guarantee contract.(6) The security referred to in par. (4) meets the publicity requirement for the purposes of enforceability and establishment of creditors' priority from the moment of its registration with the central depositary.Article 152
The NSC shall issue regulations regarding the operations carried out by the central depositary and entities for which such operations are carried out. Section 3 Supervision of the central depositaryArticle 153
(1) The NSC shall supervise the activity of the central depositary in order to ensure the transparency of the operations, proper performance of activities, and protection of investors.(2) The NSC may require the alteration of the regulations issued by the central depositary.Article 154
The NSC may require the central depositary to submit on a regular basis data, information, and documents, may organize inspections at the place of business of the central depositary and may request to be provided with all the necessary documents specifying the procedures and terms for their delivery.Article 155
(1) The securities kept in accounts opened with the central depositary may not be considered as property thereof and may not be subject to any claims presented by the creditors of the depositary.(2) The provisions of par. (1) shall also be applied in case of bankruptcy or administrative liquidation of the central depositary.Article 156
If bankruptcy proceedings are opened against the central depositary, the official receiver shall appoint the liquidator, with the assent of the NSC.Chapter V Clearing and settlement of transactions in derivatives and services of the central counterparty Section 1 General provisionsArticle 157
(1) The clearing and settlement of transactions in derivatives, as well as any operations related thereto, shall be conducted by the clearing house authorized by the NSC, in accordance with the regulations issued by the latter.(2) The clearing house is an entity responsible for the calculation of the net positions of intermediaries, of a possible central counterparty and/or a possible settlement agent.(3) The settlement agent is the entity that provides to authorized intermediaries and/or to a central counterparty participating in the system settlement accounts through which the transactions in financial instruments are settled based on transfer orders within the system or, as the case may be, extends credit to those intermediaries and/or central counterparty for settlement purposes.(4) The central counterparty is an entity which is interposed between the intermediaries in the system and which acts as the exclusive counterparty of them with regard to their transfer orders.(5) The clearing house for derivative instruments functions as a central counterparty.(6) The same entity may be authorized to act as a central counterparty both for derivative instruments and for financial instruments, other than derivatives.Article 158
The NSC shall issue regulations in accordance with the Community legislation governing the conditions to be satisfied by the clearing members and the procedure for the holding and enforcing of collateral security, hereinafter referred to as margin, clearing and guaranteeing the positions held by the clearing members, including for their own account, as well as the criteria for the management of the funds of the clearing house and of the central counterparty. Section 2 Formation and operation of the clearing house and of the central counterpartyArticle 159
(1) The clearing house and the central counterparty are legal persons, established as joint-stock companies, issuers of registered shares, which are fully paid up in cash at the time of submitting the application for authorization.(2) The NSC shall regulate the formation and operation of the clearing house and/or central counterparty, in order to ensure the safety of transactions in derivative instruments and financial instruments other than derivatives.(3) The provisions of Art. 148 and Art. 149 shall be applied as appropriate to the clearing house and to the central counterparty authorized by the NSC.Article 160
(1) Any acquisition of shares by the clearing house/central counterparty that will result in a holding reaching or exceeding 10%, 20%, 33%, 50% of the total voting rights, shall be submitted for approval to the NSC.(2) The provisions of Art. 150, pars. (3) and (4) shall be applied as appropriate to the clearing house and central counterparty authorized by the NSC.Article 161
(1) The central counterparty shall open and maintain a margin account for each clearing member to collect margins in respect of open positions. The margins may not be used for other purpose than that specified by the regulations referred to in Art. 158.(2) The margins set up in the name of the clearing members may not be considered part of the assets of the clearing house/central counterparty and may not be subject to the claims or payments of the creditors of the clearing house/central counterparty.(3) The provisions of par. (2) shall also be applied in the case of bankruptcy or administrative liquidation of the clearing house/central counterparty. Section 3 Regulations regarding the activity of the clearing house and central counterpartyArticle 162
(1) The regulations of the clearing house/central counterparty shall be submitted to the NSC for approval and shall refer at least to:a) the organization and operation of the system;b) the relations between the clearing house/central counterparty and the clearing members, including the norms regarding the lack of clearing funds;c) the margin/collateral security, calculation methodology, and method of payment, including the norms regarding the re-evaluation of open positions by using current market prices;d) the mark-to-market procedures;e) the procedures that shall be used where a clearing member fails to fulfil its obligations of setting up margins or paying any other amounts;f) the management of the systemic risk.(2) The competency to approve the regulations laid down in par. (1) may be delegated to the board of directors.Article 163
(1) The clearing house and the central counterparty must observe the principle of separating their records from those of the clearing members.(2) The clearing house and the central counterparty must satisfy the public-interest requirements, promote the objectives of the holders and users, and allow for a fair and open access in order to facilitate an orderly exit from the system for the participants no longer meeting the criteria that apply to members, such criteria being made public.(3) The clearing house and the central counterparty must make available to the participants sufficient information to correctly identify and assess the risks and the costs related to the services of the clearing house and the central counterparty. Section 4 Supervision of the clearing house and central counterpartyArticle 164
The clearing house and central counterparty must ensure the orderly carrying on of activity, transparency of operations, as well as regular and correct reporting.Article 165
The NSC shall supervise the activity of the clearing house and central counterparty and may require them to communicate data, information, and documents, may organize inspections at their place of business, and may require them to provide all the necessary documents, specifying the procedures and terms for their delivery.Article 166
The NSC may require the alteration of the regulations issued by the clearing house and central counterparty.Article 167
The provisions of Art. 156 shall be applied as appropriate to the clearing house/central counterparty authorized by the NSC.Chapter VI Finality of transfers within the clearing and settlement system Section 1 General provisionsArticle 168
(1) For the purposes of this Chapter:a) participant is an authorized intermediary, a central counterparty, a settlement agent, or a clearing house. According to the rules of the system, the same participant may act as a central counterparty, a clearing house, or a settlement agent, or carry out part or all these tasks;b) indirect participant is a credit institution which may pass transfer orders through the system, based on a contractual relationship with an institution participating in the system, which executes transfer orders within that system.(2) The provisions of this Chapter shall be applied to the clearing and settlement system as defined in par. (3), to all the participants in the settlement systems, and to any collateral security created consequent to the participation in a clearing and settlement system.(3) The clearing and settlement system is a contract concluded between three or more participants, without counting a possible settlement agent, a possible central counterparty, a possible clearing house, and a possible indirect participant, with common rules and standardised contracts for the execution of transfer orders involving financial instruments between the participants, authorized by NSC or other competent authority of the Member State, as the case may be. Section 2 Netting and transfer ordersArticle 169
(1) The transfer orders shall be irrevocable, producing legal effects for the participants, and shall be binding on third parties from the moment of their introduction into the clearing and settlement system, such moment being established by the rules of the system.(2) The transfer orders and the netting shall be valid, shall produce legal effects, and shall be binding on third parties even if the insolvency proceedings were opened against a participant, provided that those transfer orders were entered into the system before the moment of opening the insolvency proceedings.(3) Exceptionally, if the transfer orders are entered into the system after the moment of opening the insolvency proceeding and are carried out on the day of opening of such proceedings, these transfer orders and the netting shall produce legal effects and shall be binding on third parties, provided that the settlement agent, the central counterparty, or the clearing house can prove, after the settlement time, that they were not aware, nor should have been aware, of the opening of such proceedings.(4) No legal norm, rule, provision, or practice regarding the annulment of certain contracts and transactions concluded before the moment of opening the insolvency proceedings may call for the annulment of the transfer orders, nettings, payments, and subsequent transfers referred to in pars. (1) and (2). Section 3 Provisions concerning insolvency proceedingsArticle 170
(1) For the purposes of this Law, the moment of opening of insolvency proceedings shall be the moment when the competent authority orders the opening of such proceedings.(2) The competent authority that ordered the opening of insolvency proceedings shall immediately notify its decision to the NSC by fax or electronic mail, requesting the confirmation of receipt.Article 171
(1) The insolvency proceedings shall not have retroactive effects on the rights and obligations of the participants arising from/or in connection with their participation in the clearing and settlement system earlier than the moment of opening such proceedings.(2) After the opening of insolvency proceedings, the settlement agent, on behalf and for the account of the participant, for the purpose of fulfilling the obligations contracted in relation to its participation to the system, concluded before insolvency proceedings have been opened, may use:a) financial instruments and funds available on the settlement account of the participant;b) any collateral security designed to fulfil that participant's obligations in the system.(3) The collateral security and deposits constituted in connection with the clearing and settlement system by a participant shall not be affected by insolvency proceedings opened against that participant. The interests of the participant after the fulfilment of the contractual obligations in connection with the participation in the system, before the opening of the insolvency proceedings, may be used within such proceedings.(4) If insolvency proceedings are opened against a participant, the financial instruments and/or the funds held in the name and on the account of its investors shall not be subject of any claims of or payments to that participant's creditors.Article 172
The enforcement of guarantee contracts concluded by the entities regulated by the NSC according to the Government Ordinance no. 9/2004 on particular guarantee contacts, approved by the Law no. 222/2004, shall be carried out in compliance with the regulations issued by the NSC. Title V Market transactionsChapter I Public offers Section 1 Common provisionsArticle 173
(1) Any person wishing to make a public offer shall submit to the NSC an application for the approval of the prospectus in the case of a public offer for sale or the offer document in the case of a public offer to purchase accompanied by an advertisement, in accordance with the regulations issued by the NSC.(2) Once approved, the prospectus/offer document shall be made available to the public at the latest at the beginning of the offer to the public. ART. 174 - (1) The public offer carried out without the prospectus/offer document's being approved or without observing the conditions established by the approval decision shall be null by law and entail the enforcement of the sanctions set out by the law against those in default.(2) The offeror shall be bound to refund payments and to pay damages resulting from the nullity of the transactions concluded pursuant to such offer to the investors acting in good faith.Article 175
(1) The public offer advertisement may be made at any moment after the decision approving the prospectus/offer document has been issued by the NSC and must be published in at least two nationwide daily newspapers.(2) The advertisement relating to the public offer shall include information on the means by which the prospectus/offer document may be obtained by the public.(3) The prospectus/offer document shall be deemed as available to the public when one of the following conditions is satisfied:a) it is published in one or several nationwide daily newspapers;b) it may be obtained free of charge by a potential investor, on paper medium, at least at the premises of the offeror and of the intermediary of that offer, or at the premises of the operator of the regulated market where those securities are admitted to trading;c) it is published in an electronic form on the website of the offeror and of the intermediary of such offer;d) it is published in an electronic form on the website of the operator of the market where admission to trading of those securities is sought;e) it is published in an electronic form on the website of the NSC, if it has decided to provide such service.(4) Where the prospectus/offer document was made available by publication in an electronic form, a copy on paper medium must be delivered free of charge upon request of any investor at the premises of the offeror or of the intermediary of that offer.Article 176
On the date of publishing the advertisement, the offer becomes mandatory, and the prospectus or the offer document must be made available to the public in the form and content approved by the NSC.Article 177
The validity period of the offer is that stated in the advertisement and in the prospectus or the offer document, but may not exceed the terms established by the regulations of the NSC. When the validity of the offer expires, the public offer becomes null and void.Article 178
(1) Any type of advertisements relating to an offer shall be made available to the public only after it has been approved by the NSC.(2) Any type of advertisements relating to an offer prior to the issuance of the decision approving the document/prospectus shall be prohibited.(3) The information supplied by advertisements shall be consistent with that contained in the prospectus/offer document. Such advertisements shall state that the prospectus/offer document approved by the NSC has been published and indicate the means by which they are made available to the public.(4) Any type of advertisements instigating in the accepting of the public offer, by presenting that offer as one benefiting from advantages or other qualities arising on the decision of the NSC that approves the document/prospectus shall be considered deceit by abusive or misleading advertising, which affects the transactions proved to have been motivated by such presentation.Article 179
(1) Any significant new event or the modification of the original information presented by the prospectus or by the offer document, which is capable of affecting the investment decision, during the validity period of the offer, shall be included in a supplement.(2) Such supplement shall be approved by the NSC within maximum seven working days and shall be made available to the public by an advertisement under Art. 175 par. (1).Article 180
If the NSC receives an application relating to the approval of a prospectus/offer document, it shall be entitled:a) to require the offeror to include in the prospectus/offer document supplementary information necessary for the protection of investors;b) to require the offeror and persons controlling it or controlled by it to produce information and documents;c) to require auditors and management body of the offeror and intermediaries to provide information and documents for investors' protection purposes;d) to suspend an offer whenever it thinks necessary for a maximum of 10 working days on any single occasion if it has reasonable grounds for suspecting that the provisions of this Law and regulations issued by the NSC have been infringed;e) to prohibit or suspend advertisements relating to a public offer whenever it thinks necessary for maximum 10 working days on any single occasion if it has reasonable grounds for believing that the provisions of this Law and regulations issued by the NSC have been infringed;f) to order the cancellation of the decision of approval if it establishes that the public offer is infringing the provisions of this Law and of the regulations issued by the NSC, as well as in the following situations:1. if it considers that the circumstances subsequent to the decision of approval cause fundamental changes to the elements and data which have reasoned it;2. when the offeror informs the NSC of withdrawing the offer before posting the offer advertisement;g) to order the annulment of the decision of approval if it has been obtained based on false or misleading information;h) to make public the fact that an offeror does not comply with its assumed obligations.Article 181
(1) The suspension of the public offer shall stop the running of its validity period. When the suspension is lifted or stopped, the validity period of the public offer shall be presumed.(2) The cancellation of the decision approving the document/prospectus, during the validity period of the public offer, shall render void the subscriptions made until the time of the cancellation.(3) The annulment of the decision regarding the approval of the document/prospectus shall render void the transactions carried out until the date of the annulment, calling for the returning of the securities, or, respectively, of the funds received by the offerors, voluntarily or pursuant to a court order.Article 182
(1) The following persons shall be responsible for the failure to comply with the legal provisions regarding the truthfulness, exactness, and accuracy of the information in the prospectus/offer document and in the advertisement, as the case may be:a) the offeror;b) the members of the board of directors of the offeror or the sole administrator;c) the issuer;d) the members of the board of directors of the issuer;e) the founders, in case of public subscription;f) the financial auditor who certified the financial statements that provided the information inserted in the prospectus;g) the intermediaries of the offer;h) any other entity that undertook under the prospect the responsibility in respect of any information, survey, or assessment either inserted or mentioned.(2) The following persons shall be responsible, regardless of their fault, and shall be jointly and severally held liable:a) the offeror if any of the entities referred to in par. (1), lets b), g), and h) is responsible;b) the issuer if any of the entities referred to in par. (1) lets d) to f) is responsible;c) the manager of the intermediation syndicate if a member of the intermediation syndicate is responsible.(3) The right to receive compensation must be exercised within maximum six months from becoming aware of the shortcomings of the prospectus/document, but no later than 1 year from the date when the public offer ended. Section 2 Public offer for saleArticle 183
(1) No public offer for sale may be made without the publication of a prospectus approved by the NSC.(2) The public offer for sale shall be made through an intermediary authorized to provide investment services.(3) By way of derogation from par. (1), the publishing of a prospectus shall not be mandatory in the following situations:a) for the following types of offers:1. the offer aimed exclusively at qualified investors;2. the offer addressed to fewer than 100 investors, natural or legal persons, other than qualified investors;3. the total consideration of the offer, the denomination per unit of the securities, and the minimum amount of securities acquired by an investor within the offer are at least equal to the amounts set out by the regulations of the NSC;b) for the following types of securities:1. securities offered, allotted or to be allotted in connection with a merger, provided that a document is available containing information that is regarded by the NSC as being equivalent to that of the prospectus, taking into account the requirements of the Community legislation;2. shares offered, allotted or to be allotted free of charge to existing shareholders, and dividends paid out in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that a document is made available containing information on the number and nature of the shares and the reasons for and details of the issue;3. shares issued in substitution for shares, of the same class, already issued, if the issuing of such new shares does not involve any increase in the share capital;c) other cases laid down in the regulations issued by the NSC.(4) Any subsequent resale of securities that were previously the subject of an offer referred to in par. (3) shall be regarded as a distinct operation, with the provisions of Art. 2 point 18 having to be applied for the purpose of deciding the extent to which such resale operation is a public offer.(5) In the case of UCITSs, the prospectus shall be drawn up in accordance with the provisions of Title III.Article 184
(1) The offer prospectus shall include all information that, according to the particular nature of the issuer and of the securities offered to the public, is necessary to enable investors to make an informed assessment of the assets and the liabilities, financial position, profit and losses, and prospects of the issuer and of the entity guaranteeing the fulfilment of the obligations undertaken by the issuer, if the case requires, and of the rights attaching to such securities.(2) The offer prospectus approved by the NSC shall be valid for 12 months after its publication, and it may be used for several issues of securities during this period if it is updated according to the Art. 179.(3) The prospectus shall also contain a summary of the information inserted.(4) The summary shall be brief and rendered in non-technical terms, conveying the essential characteristics of and risks associated with the issuer, entity that guarantees the fulfilment of the obligations undertaken by the issuer, if the case requires, and securities offered. The summary must also include a warning to the potential investors that:a) it should be read as an introduction to the prospectus;b) any decision to invest should be based on consideration of the prospectus as a whole by the investor;c) before the initiation of legal proceedings concerning the information contained in a prospectus, the plaintiff will have to bear the costs of translating the prospectus into Romanian;d) where the summary is misleading, inaccurate, inconsistent, or contradictory when read together with the other parts of the prospectus, civil liability attaches to those persons who have drawn up the summary, also including the persons who have effected the translation, as well as the persons who produce notifications regarding cross-border public offers.Article 185
(1) The prospectus may be drawn up as a single document or as several separate documents, namely:a) the registration document, containing information related to the issuer;b) the note regarding the characteristics of the securities offered or proposed to be admitted to trading on a regulated market;c) the summary note of the prospectus.(2) The registration document approved by the NSC shall be valid for a period of 12 months provided that it is updated according to the regulations of the NSC.(3) Where an issuer, which already has a registration document approved by the NSC, intends to initiate a new public offer, such issuer may draw up and submit for approval only the documents referred to in par. (1) lets. b) and c).(4) In the situation referred to in par. (3), the securities note regarding the characteristics of the securities offered or proposed to be admitted to trading on a regulated market shall also include the information relating to the issuer, which emerged after the last update of the registration document and which could affect investors' decision.Article 186
(1) The prospectus may refer to information regarding the issuer, which has previously been published and approved by the NSC or drawn up in accordance with the legal provisions.(2) When the information referred to in par. (1) is incorporated in the prospectus by reference, a cross-reference list must be drawn up in order to enable investors to identify this information.(3) The summary note may not incorporate the information provided for in par. (1) by reference.Article 187
The minimum content of the information that must be included in the prospectus drawn up as a single document or of the parts making up the prospectus, the presentation form thereof, according to the type of securities offered, and the documents that must accompany the prospectus shall be established by the regulations of the NSC.Article 188
(1) The NSC shall decide on the approval of the offer prospectus within 10 working days from filing the application.(2) The time limit referred to in par. (1) shall be extended to 20 working days if the securities are issued by an issuer which applies for the first time for admission to trading on a regulated market or which has not previously offered securities to the public.(3) Any request for additional information or for the amendment of the information provided initially in the prospectus, made by the NSC or by the offeror, shall interrupt these terms which shall be presumed at the time when the said information is provided or the amendments are made.Article 189
(1) Where the price and number of securities offered to the public cannot be included in the prospectus, at the time of its approval, the prospectus shall include:a) the criteria and/or conditions based on which the price and number of the securities offered to the public are to be determined, in the case of price, the maximum price, orb) the possibility to withdraw the subscriptions made in at least two working days after the final offer price and number of securities offered have been filed with the NSC and published according to Art. 175.(2) Investors who have agreed to subscribe for the securities before the amendment to the prospectus is published, shall have the right to withdraw their acceptances within three working days after the publication of that supplement.Article 190
The price-fixing activities shall be performed according to the regulations of the NSC.Article 191
Requests for investment intents shall be permitted so as to assess the success of a future offer under the terms laid down by the NSC.Article 192
The NSC shall issue regulations concerning the cross-border public offers made in the Member States by issuers having their registered office in Romania or by non-residents in Romania, in accordance with the relevant Community legislation. Section 3 Public offer to purchaseArticle 193
(1) The public offer to purchase represents the offer of a person to purchase securities, addressed to all holders thereof, disseminated through the media or by other means, subject to equal opportunities of receipt by the securities holders.(2) The public offer to purchase shall be made through an intermediary authorized to provide investment services.(3) The price offered within the public offers to purchase shall be established in accordance with the regulations of the NSC.Article 194
(1) The NSC shall decide on the approval of the offer document within 10 working days from filing the application.(2) Any request of the NSC or of the offeror for additional information or for the amendment of the initially provided information in the offer document shall discontinue this term, which shall be presumed from the date when the information is provided or the amendment is performed.Article 195
(1) The public offer to purchase must be made so as to ensure a fair treatment to all investors.(2) The minimum information content to be included in the offer document shall be established by the regulations of the NSC. Section 4 Voluntary public takeover offerArticle 196
(1) The voluntary public takeover offer is the public offer to purchase addressed to all shareholders, in respect of all their holdings, initiated by a person who does not have this obligation, in order to acquire more than 33% of the voting rights.(2) The person who intends to make a voluntary takeover offer shall submit to the NSC a preliminary announcement in order to be approved. The minimum information content that must be included in the preliminary announcement shall be established by the regulations of the NSC.(3) After the approval of the NSC, the preliminary announcement shall be submitted to the company, which is the subject of the takeover, to the regulated market where the securities in question are traded and shall be published in at least one central daily newspaper and in one local daily newspaper within the administrative-territorial area of the issuer.Article 197
(1) The board of directors of the company, which is the subject of the takeover, shall submit to the NSC, to the offeror and to the regulated market where the securities are traded its opinion regarding the opportunity of the takeover, within 5 days from receiving the preliminary offer announcement.(2) The board of directors may convene the extraordinary general assembly in order to inform the shareholders on the opinion of the board of directors concerning such offer. If the convocation notice is drawn up by a qualifying shareholder, the convocation of the general assembly shall be mandatory and the convocation notice shall be published within maximum five days from filing the application. By way of derogation from the provisions of the Law no. 31/1990, the general assembly shall be held within five days from the publication of the convocation notice in a nationwide distributed newspaper.(3) From the receipt of the preliminary announcement until the closing of the offer, the board of directors of the company, which is the subject of the takeover, shall inform the NSC and the regulated market of all the operations carried out by the members of the board of directors and of the executive management with respect to the securities in question.Article 198
(1) From the moment when the preliminary announcement is received, the board of directors of the company, which is the subject of the takeover, may not conclude any act and may not take any measure that may affect its assets and liabilities or the objectives of the takeover, except for the current management acts.(2) For the purposes of this section, there shall be considered likely to affect the assets and liabilities, the operations that involve, without being exhaustive, the increase of the issued capital or issuance of securities granting the right of subscription or conversion into shares, the reservation of title to or transfer of assets amounting to at least one third of the net assets according to the latest annual accounts of the company.(3) By way of derogation from the provisions of par. (1), the operations deriving from obligations undertaken before the publication of the takeover announcement may be carried out, as well as the operations explicitly approved by the extraordinary general assembly especially convened after the preliminary announcement.(4) The offeror shall be held responsible for all the damages caused to the company, which is the subject of the takeover offer, if evidence is produced supporting that the offer has been initiated exclusively to prevent the company from taking any of the measures referred to in par. (2) or from carrying out the operations explicitly approved by the extraordinary general assembly especially convened after the announcement.Article 199
(1) The publication of the preliminary announcement shall hold the offeror to file with the NSC, within maximum 30 days, the documentation relating to the public takeover offer, within time limits that are not less favourable than those prescribed in the preliminary announcement.(2) The NSC shall decide on the approval of the offer document within the time limit set out in Art. 194.(3) The price offered within the voluntary takeover offers shall be established in accordance with the regulations of the NSC.Article 200
The offeror or the persons acting in concert therewith may not initiate within one year from the closing of the previous takeover offer a new takeover offer to the same issuer. Section 5 Competing public offersArticle 201
(1) Any person may make a counteroffer having as object the same securities under the following conditions:a) it has as object the same amount of securities or it seeks to achieve at least the same holding in the share capital;b) it offers a price at least 5% higher than the first offer.(2) The counteroffer shall be made by filing the required documentation with the NSC within maximum 10 working days from the date when the first offer was made available to the public.(3) The NSC shall decide on these offers in accordance with the provisions of Art. 194 par. (1).(4) Through the decision authorizing the counteroffers, the NSC will set only once the same closing time for all the offers, as well as a deadline for the submission for approval of the amendments regarding the price increase in competing offers.(5) The single closing time for the competing offers may not surpass 60 working days from the date of the first offer. Section 6 Mandatory takeover offersArticle 202
The provisions of this section shall be applied to the undertakings whose shares are traded on a regulated market.Article 203
(1) A person holding more than 33% of the voting rights in an undertaking as a consequence of own acquisitions or acquisitions of the persons acting in concert therewith, shall be required to make a public offer addressed to all securities holders in respect of all their holdings as soon as possible, but no later than two months from acquiring such holding.(2) Up to the time of the public offer mentioned in par. (1), the rights relating to the securities exceeding the threshold of 33% of the voting rights in the issuer shall be suspended, and that shareholder and the persons acting in concert therewith may no longer acquire by way of other operations shares in the same issuer.(3) The provisions in par. (1) shall not apply to the persons who acquired over 33% of the voting rights prior to the entry into force of this Law in compliance with the legal provisions applicable at the time of the acquisition.(4) The persons referred to in par. (3) shall make a mandatory takeover offer in accordance with the provisions in par. (1) only if, subsequent to the entry into force of this Law, they increase their holdings to reach or exceed 50% of the voting rights in the issuer. Until the time of the public offer, the rights relating to acquired shares exceeding 50% shall be suspended, and that shareholder and the persons acting in concert therewith may no longer acquire by way of other operations shares in the same issuer.Article 204
(1) The price offered shall be at least equal to the highest price paid by the offeror or by the persons acting in concert therewith during the 12-month period before the offer.(2) If the provision in par. (1) cannot be applied, the price offered shall be determined in accordance with the regulations of the NSC, account being taken of at least the following criteria:a) the weighted average trading price relating to the last 12 months prior to the offer;b) the net asset value of the undertaking according to the latest audited financial accounts;c) the value of the shares as resulted upon examination carried out by an independent appraiser in accordance with the international valuation standards.Article 205
(1) The provisions in Art. 203 shall not be applied where the holding representing more than 33% of the voting rights in the issuer has been acquired as a result of an exempted transaction.(2) For the purposes of this Law, exempted transaction represents the acquiring of the holding in question:a) within the privatisation process;b) by purchasing shares from the Ministry of Public Finance or from other duly vested entities within the proceedings for the realization of the budgetary claims;c) as a result of the conveyance of shares between the parent undertaking and its subsidiaries or between the subsidiaries of the same parent undertaking;d) as a result of a voluntary public takeover offer to all holders of those securities and having as object all their holdings.(3) Where the holding of more than 33% of the voting rights in the issuer is acquired unintentionally, the holder of such holding has one of the following alternative obligations:a) to make a public offer under the conditions and at the price laid down in Arts. 203 and 204;b) to sell a number of shares so as to drop out from the position acquired without intention.(4) Any one of the obligations referred to in par. (3) must be fulfilled within three months from the acquiring of that holding.(5) The acquiring of the holding representing more than 33% of the voting rights in the issuer shall be considered as unintentional if it has been achieved as a result of certain operations such as:a) the decrease of capital through redemption by the undertaking of its own shares followed by their annulment;b) the exceeding of the threshold as a result of exercising the right of pre-emption, subscription, or conversion of the initially assigned rights, as well as a result of converting the preference shares into ordinary shares;c) merger/division or succession. Section 7 Withdrawal of shareholders from an undertakingArticle 206
(1) Following a public offer to purchase addressed to all shareholders and in respect of all their holdings, the offeror has the right to solicit the shareholders that have not subscribed to the offer to sell to him those shares at acceptable price if he is in one of the following situations:a) he holds shares representing more than 95% of the share capital;b) he has acquired within the public offer to purchase addressed to all shareholders and in respect of all their holdings shares representing more than 90% of the shares sought in the offer.(2) If the undertaking has issued several classes of shares, the provisions in par. (1) shall be applied separately for each class.(3) The price offered within a mandatory takeover offer, as well as within a voluntary takeover offer, where the offeror has acquired by subscriptions within the offer shares representing more than 90% of the shares targeted, is considered an acceptable price.(4) In the situation referred to in par. (3), the assumption referring to the fair price is applicable only where the offeror exercises the right referred to in par. (1) within three months from the closing of that offer. If that is not the case, the price shall be determined by an independent expert in accordance with international valuation standards.(5) The price established by an independent expert shall be notified to the public through the market of trading, by publishing it in the NSC Bulletin, on the NSC website and in two nationwide financial newspapers, within five days from the drawing up of the report.Article 207
(1) As a consequence of the public offer to purchase addressed to all holders and in respect of all their holdings, a minority shareholder has the right to solicit the offeror that holds more than 95% of the share capital to buy his shares at an acceptable price.(2) Where the undertaking has issued several classes of shares, the provisions in par. (1) shall be applied separately for each class.(3) The price shall be determined in accordance with the provisions of Art. 206 par. (3). If the appointment of an independent expert is required, the costs involved shall be borne by that minority shareholder.Article 208
The NSC shall issue regulations for the enforcement of the provisions of the section hereby. Title VI IssuersChapter I General provisionsArticle 209
Securities issuers shall ensure a fair treatment to all holders of securities of the same type and class and shall provide them with all the necessary information so that they may exercise their rights.Article 210
(1) There shall be prohibited the abusive use of the position held by shareholders or of the capacity of administrator or employee of the company through disloyal and fraudulent acts, which have as object or effect the encroachment of the rights relating to the securities and other financial instruments held and the prejudice of their holders.(2) Securities holders must exercise the rights conferred by such securities in good faith, in compliance with the lawful rights and interests of the other holders, and in the best interest of the undertaking or, failing such, they are liable for the damages caused.Chapter II Prospectus for admission to trading on a regulated marketArticle 211
(1) Admission to trading on a regulated market of securities shall be made after the publication of a prospectus approved by the NSC.(2) The NSC shall issue regulations regarding:a) the content of the prospectus;b) the exceptions from the obligation to publish a prospectus or the disclosure of certain information in such prospectus.c) the admission to trading on a regulated market of Romania of securities issued by non-residents in accordance with the relevant Community legislation.(3) The provisions of Section 1 and Section 2 of Chapter I Title V shall be also applied adequately to the prospectus drawn up with a view to admission to trading.Article 212
The securities of an issuer shall not be admitted to trading on a regulated market if, following the assessment of that issuer's condition, it is believed that its condition is likely to prejudice the interests of the investors.Chapter III Specific conditions for the admission of shares to trading on a regulated market Section 1 Conditions relating to the issuerArticle 213
(1) In order for the shares of a company to be admitted to trading on a regulated market, that company must meet the following conditions:a) the company must be formed and must operate in accordance with the legal provisions in force;b) the company must have a foreseeable capitalisation amounting to at least the ROL equivalent of EUR 1,000,000 if this capitalisation cannot be assessed, and the company's capital and reserves, including profit or loss from the last financial year, must amount to at least the ROL equivalent of EUR 1,000,000, calculated according to the reference rate notified by the National Bank of Romania on the date of the application for admission to trading;c) the company must have functioned in the last three years prior to the application for admission to trading and must have drawn up and communicated its financial accounts for that period in accordance with the legal provisions.(2) The condition laid down in par. (1) let. b) shall not be applicable for the admission to trading of an additional issue of shares of the same class as those already admitted.Article 214
The undertakings that do not satisfy the conditions set out in Art. 213 par. (1) lets. b) and c) could also be admitted to trading on the regulated market, subject to approval by the NSC, if it is believed that:a) there will be an adequate market for those shares;b) the issuer is capable of complying with the continuous and regular informing requirements deriving from the admission to trading, and the investors have the necessary information available to arrive at an informed judgement on the company and the shares for which admission to trading is sought. Section 2 Conditions relating to sharesArticle 215
The shares that are the subject of admission to trading must be freely negotiable and fully paid for.Article 216
Where public issue precedes admission to trading, the admission may be made only after the end of the subscription period.Article 217
(1) A sufficient number of shares must be distributed to the public in order for a company's shares to be admitted to trading on a regulated market.(2) A sufficient number of shares shall be deemed to have been distributed to the public in the following situations:a) the shares in respect of which application for admission has been made are in the hands of the public to the extent of at least 25% from the subscribed capital represented by that class of shares;b) the market will operate properly with a lower percentage of shares than that referred to in let. a) due to the large number of shares in circulation and the extent of their distribution to the public.(3) The condition laid down in par. (1) shall not apply where the shares are distributed to the public through the transactions carried out on that regulated market. In that event, admission to trading may be granted if the NSC is satisfied that a sufficient number of shares will be distributed to the public through that regulated market within a short period.Article 218
Where admission to trading on a regulated market is sought for a further block of shares of the same class as those already admitted, the NSC may assess whether a sufficient number of shares has been distributed to the public in relation to all the shares issued and not only in relation to this further block.Article 219
The application for admission to trading on a regulated market must cover all the shares of the same class already issued.Chapter IV Particular conditions for admission to trading on a regulated market of debt securities issued by undertakings, public authorities, and international bodiesArticle 220
(1) In order for the debt securities issued by undertakings, public authorities, and international bodies to be admitted to trading on a regulated market, the issuer must be formed and must operate in accordance with the legal provisions in force.(2) The debt securities that are the subject of admission to trading must be freely negotiable and fully paid for.(3) Where public issue precedes admission to trading, the admission may be made only after the end of the subscription period.(4) The provisions set out in par. (3) shall not apply in the case of tap issues of debt securities when the closing date for subscription is not fixed.Article 221
The application for admission to trading on a regulated market must cover all debt securities of the same class already issued.Article 222
(1) The amount of the loan may not be less than the ROL equivalent of EUR 200,000. This provision shall not be applicable in the case of tap issues where the amount of the loan is not fixed.(2) The debt securities that do not meet the requirement in par. (1) may be admitted to trading on a regulated market, subject to approval by the NSC, if it is believed that there will be a sufficient market for those debt securities.Article 223
(1) Convertible debentures may be admitted to trading on a regulated market only if the securities they could be converted into are also listed on a regulated market.(2) By way of derogation, convertible debentures non-complying with the condition set out in par. (1) may be admitted to trading on a regulated market if the NSC is satisfied that the investors have at their disposal all the information necessary to form an opinion concerning the value of the shares that are the subject of conversion.Chapter V Issuers transparency Section 1 Obligations of undertakings whose shares are admitted to trading on a regulated marketArticle 224
(1) The undertakings admitted to trading on a regulated market shall be bound to register with the NSC and comply with the reporting requirements established by the regulations of the NSC and of the regulated markets where the securities issued by them are traded.(2) The company must ensure equal treatment for all shareholders holding shares of the same class.(3) The company must ensure that all the necessary facilities and information are available to enable shareholders to exercise their rights and, in particular, it must:a) inform shareholders of the holding of general meetings and enable them to exercise their right to vote;b) inform the public of the allocation and payment of dividends, the issue of new shares including allotment, subscription, renunciation and conversion arrangements;c) designate as payment agent a financial institution through which shareholders may exercise their financial rights, unless the issuer itself provides such services.(4) Where the company plans to amend its articles of incorporation must submit the draft of the amendments to the NSC and to the regulated market no later than the calling of the general meeting which is to decide upon the amendment.(5) The company must inform the public without delay, within maximum 48 hours, of any new developments in its sphere of activity which are not known to the public and which may, by virtue of their effect on its assets and liabilities and financial position or on the general course of its business, lead to movements in the prices of shares.(6) The NSC may require the company admitted to trading to disclose all information it considers necessary in order to protect investors and to ensure the sound operation of the market.(7) The NSC may require an issuer to publish the information referred to in par. (6) establishing the form and time limits for doing so. If the issuer fails to publish the required information, the NSC may itself publish such information after having heard the issuer.(8) An issuer whose shares are admitted to trading on a regulated market in Romania or in one or more regulated markets within the Member States shall be obliged to supply equivalent information to these markets.Article 225
(1) The administrators of the companies admitted to trading shall be required to report as soon as possible any legal act concluded by the company with the administrators, employees, controlling shareholders, and persons connected therewith whose aggregated value represents at least the equivalent in ROL of EUR 50,000.(2) If the company concludes legal acts with the persons referred to in par. (1), its interests in relation to similar offers on the market shall be considered.(3) The reports referred to in par. (1) shall include under a special Chapter the legal acts concluded or amendments thereto and shall state the following elements: the parties which have concluded the legal act, the date and the nature of the act, the description of its object, the total value of the legal act, the counterclaims, any collateral security created, the payment terms and methods.(4) The reports shall include any other information required to determine the effects of these legal acts on the financial condition of the company.Article 226
(1) Any issuer must inform the public and the NSC, as soon as possible of the inside information which directly concerns that issuer.(2) The NSC shall issue regulations concerning the methods employed to inform the public in accordance with the Community legislation.(3) An issuer may, under its own responsibility, delay the public disclosure of inside information, as referred to in par. (1), such as not to prejudice its own interests provided that such delay would not mislead the public and provided that the issuer is able to ensure the confidentiality of that information.(4) The issuer shall without delay inform the NSC of the decision to delay the public disclosure of such information. The NSC may hold the issuer to disclose the information in order to ensure the transparency and the integrity of the market.(5) If an issuer or a person acting on behalf or for the account of the issuer discloses any inside information to a third person in the normal exercise of its profession, as referred to in Art. 246 let. a), it must make that information public, simultaneously in the case of an intentional disclosure and immediately in the case of an non-intentional disclosure.(6) The provisions in par. (5) shall not apply if the person who received the information is required to preserve its confidentiality, regardless of whether such duty is based on a law, on regulations, on articles of incorporation, or on a contract.(7) The issuers or the persons acting on behalf or for the account of the issuers shall be required to draw up a list of persons working for them, based on an employment contract or otherwise, who have access to inside information. The issuers and the persons acting on their behalf or for their account shall regularly update this list and transmit it to the NSC whenever it is requested.(8) The provisions in pars. (1) to (7) shall not apply to issuers that have not applied for or that have not been granted approval so as the financial instruments issued by them to be admitted to trading on a regulated market of Romania or of a Member State.Article 227
(1) The companies admitted to trading on a regulated market shall draw up, make available to the public, and transmit to the NSC and to the market operator quarterly, half-yearly, and annual reports. The reports shall be made available to the public in writing or in any other form approved by the NSC. The company shall publish a statement in a nationwide daily newspaper through which investors shall be informed of the availability of these reports. The reports will be sent for publication within maximum five days from the date of their approval.(2) The reporting must include any significant information so that investors may make an informed assessment of the activity of the company, profit or loss, together with an indication of any special factor that has influenced these activities. The financial situation shall be presented in comparison with the financial situation of the same period of the preceding financial year. The NSC shall issue regulations regarding the content of these reports.(3) Where the company admitted to trading on a regulated market prepares both own annual and consolidated annual accounts, such accounts shall be made available to the public. The NSC may allow the company to disclose to the public either the own accounts or the consolidated accounts if the accounts that are not made available to the public do not contain any significant additional information.(4) The company admitted to trading on a regulated market must make available to the public, within maximum four months from the end of the financial year, the annual financial statements together with the annual report, approved by the general meeting of shareholders. The annual report shall also include the report of the financial auditor appointed in accordance with the provisions laid down in Art. 258, and the opinions of that financial auditor shall be reproduced in full.(5) The half-yearly report must be made available to the public within maximum two months from the end of the reporting period. If the half-yearly financial statements have been audited, the half-yearly report must include the financial auditor's report.Article 228
(1) Where the acquisition or sale of securities issued by a company admitted to trading on a regulated market causes the voting rights held by a person to reach, exceed, or fall below one of the thresholds of 5%, 10%, 20%, 33%, 50%, 75% or 90% of the total voting rights, that person shall be bound to inform simultaneously, within maximum three working days from becoming aware of that situation, the company, the NSC, and the regulated market where those securities are listed.(2) Where the thresholds referred to in par. (1) are reached or exceeded by the subsidiary of a parent undertaking, such entity shall be exempted from the obligation to inform if the information has been made public by the parent undertaking.(3) The company admitted to trading on a regulated market, which has received information under par. (1), must make inform the public of that operation within maximum three working days.(4) The NSC shall issue regulations regarding the means for the determination of the voting rights in order to apply the provisions laid down in par. (1). Section 2 Obligations of companies whose debt securities are admitted to trading on a regulated marketArticle 229
(1) The company must ensure that all holders of debt securities relating to the same loan are given equal treatment in respect of all the rights attaching to those debt securities. An issuer whose debt securities are admitted to trading on a regulated market in Romania or in one or more regulated markets within Member States must provide the markets with equivalent information.(2) The company must provide all facilities and information necessary to enable the holders of debt securities to exercise their rights, in particular:a) to publish notices concerning the holding of meetings of holders of debt securities, the payment of interest, the exercise of any conversion, exchange, subscription, or repayment rights;b) to designate as paying agent a financial institution through which holders of debt securities may exercise their financial rights, unless the issuer itself provides such services.Article 230
Where the company plans to amend its articles of incorporation, thus affecting the rights of holders of debt securities, must communicate the draft of the amendments to the NSC and to the regulated market no later than the calling of the general meeting which is to decide upon the amendments.Article 231
(1) The company admitted to trading on a regulated market must make available to the public, within maximum four months from the end of the financial year, the audited annual financial statements together with the annual report.(2) If the company admitted to trading on a regulated market prepares both annual own and consolidated accounts, such accounts shall be made available to the public. The NSC may authorize the company to disclose to the public either the own accounts or the consolidated accounts provided that the accounts which are not disclosed do not contain any significant additional information.Article 232
The company must inform the public as soon as possible of the following:a) any major new developments in its sphere of activity which are not public knowledge and which may significantly affect its ability to meet its commitments. The NSC may exempt the company from this obligation at its request if the disclosure of particular information would be such as to prejudice the legitimate interests of the company;b) the contracting of any new loans and the guarantees set up in respect thereof;c) any change in the rights of the holders of debt securities which would arise particularly on the change in the loan terms or interest rate;d) the change in the rights relating to shares where the debt securities may be converted into shares. Section 3 Obligations of public authorities and international bodies issuers of debt securitiesArticle 233
(1) The local and central public administration bodies as well as the international bodies must ensure that all the investors are given equal treatment in respect of the rights attaching to those debts securities. An issuer whose debt securities are admitted to trading on a regulated market in Romania or in one or more regulated markets within the Member States must provide the markets with equivalent information.(2) The local and central public administration bodies as well as the international bodies must provide all the conditions and information needed by investors to exercise their rights. These authorities must:a) publish information concerning the calling of general meetings of the holders of debt securities, the payment of interest, and loan repayment;b) designate a paying agent through which holders of debt securities may exercise their financial rights.Chapter VI Special provisions applicable to companies admitted to tradingArticle 234
For the securities admitted to trading on a regulated market, the NSC may:a) require the issuer to provide all the information which might have an effect on the valuation of securities so as to ensure the protection of investors and maintain a sound operation of the market;b) suspend or ask the market operator to suspend the securities from trading if it considers that the issuer's situation is such that trading would be detrimental to investors' interests;c) take all the measures to ensure that the public is correctly informed;d) decide that the securities admitted to trading on a regulated market be withdrawn from trading if it considers that, owing to special circumstances, a sound market may no longer be maintained for those securities.Article 235
(1) Members of the board of directors of the companies admitted to trading on a regulated market may be elected by employing the cumulative voting. At the request of a qualifying shareholder, the election based on this method shall be mandatory.(2) A company where the cumulative voting is applied will be managed by a board of directors formed of at least five members.(3) The regulations regarding the application of the cumulative voting shall be established by the NSC.Article 236
(1) Any increase in the issued capital must be decided by the extraordinary general meeting of the shareholders.(2) The articles of incorporation or the extraordinary general meeting may authorize the increase in the issued capital to a certain ceiling. The administrators may decide, within the limits of the ceiling established, following the delegation of tasks, the increase in the issued capital. This capacity shall be assigned to the administrators for not more than one year and it may be renewed by the general meeting for a period not exceeding one year for each renewal.(3) The decisions taken by the board of directors of a company admitted to trading, through the exercise of the powers delegated by the extraordinary general meeting of the shareholders, shall be given the same treatment as the decisions of the general meeting of the shareholders as regards their disclosure to the public and the possibility of appealing before a court.(4) The fees charged to shareholders requesting copies of the documents issued for the enforcement of par. (3) shall not exceed the cost related to their multiplication.Article 237
(1) The accounts, including the consolidated accounts, of the companies admitted to trading shall be prepared in compliance with the relevant accounting standards and shall be audited by financial auditors in accordance with the regulations regarding the financial auditing.(2) The legal representatives of the companies shall be bound to provide the NSC, the company's auditors and/or experts appointed by the court of law with documents necessary to exercise their functions.(3) The Administrator, director, and/or executive director shall be bound to provide the shareholders with accurate accounts and true information concerning the economic condition of the company.Article 238
(1) By way of derogation from the provisions of the Law no. 31/1990, the identification of the shareholders that are to benefit from dividends or other rights and that are affected by the decisions made by the general meeting of the shareholders shall be performed by the latter. That date shall be at least 10 working days after the date of the general meeting of the shareholders.(2) At the same time as the setting out of dividends, the general meeting of the shareholders shall also establish the term within which the dividends are to be paid to the shareholders. This term shall not exceed six months from the date of the general meeting of the shareholders when dividends are established.(3) If the general meeting of the shareholders does not establish the date when dividends are to be paid, in accordance with par. (2), these shall be paid within maximum 60 days from the date when the decision of the general meeting of the shareholders for the establishing of dividends has been published in the Official Gazette of Romania, Part IV; from there on the company shall be considered to have fallen behind.Article 239
The decision of the general meeting to establish dividends shall be filed within 15 days with the Office of the Trade Register to be entered in the register and published in the Official Gazette of Romania, Part IV. The decision shall constitute a writ of execution based on which the shareholders may initiate forced execution against the company, in accordance with the law.Article 240
(1) Where the issued capital is increased by contribution in cash, the suspension of the pre-emptive right of the shareholders to subscribe to the new issues must be decided at the extraordinary general meeting of the shareholders attended by at least three fourths of the holders of the share capital by the vote of the shareholders representing at least 75% of the voting rights.(2) The increases in the issued capital by contribution in kind must be approved by the extraordinary general meeting of the shareholders attended by at least three fourths of the holders of the share capital and by the vote of the shareholders representing at least 75% of the voting rights. The contributions in kind may consist only in working assets necessary for the corporate purpose of the issuer.(3) The valuation of the contribution in kind shall be conducted by independent experts according to Art. 210 of the Law no. 31/1990.(4) The number of shares attached to the contribution in kind shall be determined as the ratio of the value of contribution established under par. (3) to the higher of the market price of a share, the value per unit calculated based on the book-value net assets, and the face value of the share.(5) Where the pre-emptive right is suspended under par. (1), the number of shares shall be established according to the criterion in par. (4).(6) The NSC shall issue regulations for the application of this Article.Article 241
(1) The acts relating to the acquisition, sale, exchange, placing as collateral security of assets falling under the category of capital assets, whose individual or aggregated value exceeds during a financial year 20% of the total capital assets exclusive of any receivables, shall be drawn up by the administrators or directors of the company only after the prior approval by the extraordinary general meeting of the shareholders.(2) Any lease of tangible assets for a period of more than one year whose individual or aggregated value with respect to the same co-contractor or persons involved or acting in concert exceeds 20% of the total capital assets exclusive of any receivables at the time of the conclusion of the legal act has, as well as any partnerships over a period longer than one year, which exceeds the same value, must be approved in advance by the extraordinary general meeting of the shareholders.(3) Where the provisions laid down in pars. (1) and (2) are not complied with, any of the shareholders may request the court of law to annul the legal act concluded and to hold the administrators for compensation in respect of damages caused to the company.Article 242
The shareholders of a company admitted to trading, who do not agree with the decisions made by the general meeting with respect to mergers or divisions, which involve the allotment of shares that are not admitted to trading on a regulated market, shall have the right to withdraw from the company and to receive the value equivalent to the shares from that company in accordance with Art. 133 of the Law no. 31/1990.Article 243
(1) The access of the shareholders entitled to attend, on the reference date, the general meeting of the shareholders shall be allowed based on the mere proof of their identity that is, in the case of natural persons, the identity document or, in the case of represented legal persons and shareholders that are natural persons, the proxy issued to the natural person who represents them.(2) Preventing a shareholder, which satisfies the legal requirements, from participating in the general meeting of the shareholders shall entitle any person to initiate a legal action for the annulment of the decision of the general meeting of the shareholders.(3) The shareholders, except for administrators, may be represented at the general meeting of the shareholders by other persons based on a special mandate in compliance with the regulations of the NSC.(4) The calling of the general meeting, at the request of the company's qualifying shareholders, shall be exclusively the duty of the administrators, including on the agenda all the issues specified in that request.(5) The company shall make available for the shareholders, at least five days before the general meeting of the shareholders, on its own website or at its headquarters, the documents or information regarding the issues included on the agenda.(6) The administrators shall be required to convene the general meeting of the shareholders so it is held, at the first or second calling, within no longer than one month from the date of the request. Title VII Market abuseArticle 244
(1) Inside information shall mean information of a precise nature that has not been made public, relating, directly or indirectly, to one or more issuers of financial instruments or to one or more financial instruments and that, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments.(2) In relation to derivatives on commodities, "inside information" shall mean information of a precise nature, which has not been made public, relating, directly or indirectly, to the derivative financial instruments and which users of markets on which such derivatives are traded would expect to receive in accordance with accepted market practices on those markets.(3) Accepted market practices shall mean practices that are employed in one or more markets and are accepted by the NSC in accordance with Community procedures.(4) For persons charged with the execution of orders concerning financial instruments, "inside information" shall also mean information conveyed by a client and related to a client's pending orders, which is of a precise nature, which relates directly or indirectly to one or more issuers of financial instruments or to one or more financial instruments, and which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments.(5) Market manipulation shall mean:a) transactions or orders to trade:1. which give, or are likely to give, false or misleading signals as to the demand for, supply or price of financial instruments;2. which secure, by a person, or persons acting in collaboration, the price of one or several financial instruments at an abnormal or artificial level;b) transactions or orders to trade which employ fictitious devices or any other form of deception;c) dissemination of information through the media, including the Internet, or by any other means, which gives, or is likely to give, false or misleading signals as to financial instruments, including the dissemination of rumours and false or misleading news, where the person who made the dissemination knew, or ought to have known, that the information was false or misleading. In respect of journalists when they act in their professional capacity, such dissemination of information is to be assessed taking into account the rules governing their profession, unless those persons derive, directly or indirectly, an advantage or profits from the dissemination of the information in question.(6) The persons who enter into transactions or issue orders to trade and prove that their reasons for doing so are legitimate and that these transactions or orders to trade are in compliance with the accepted market practices on the regulated market concerned shall be exempted from the provisions of par. (5) let. a).(7) For the purposes of par. (5), the following instances, without being exhaustive, shall be considered market-manipulation operations:a) conduct by a person, or persons acting in collaboration, to secure a dominant position over the demand for a financial instrument which has the effect of fixing, directly or indirectly, purchase or sale prices or creating other unfair trading conditions;b) the selling or buying of financial instruments at the close of the market with the effect of misleading investors acting on the basis of closing prices;c) taking advantage of occasional or regular access to the traditional or electronic media, by conveying an opinion about a financial instrument, or indirectly about its issuer, while having previously taken positions on that financial instrument and profiting subsequently from the impact of the opinions expressed with regard to that instrument, without having simultaneously disclosed that conflict of interest to the public in a proper and effective way.Article 245
(1) Any person who possesses inside information shall be prohibited from using that information by acquiring or disposing of, or by trying to acquire or dispose of, for his own account or for the account of a third party, directly or indirectly, financial instruments to which the information relates.(2) The provisions in par. (1) shall apply to any person who possesses inside information:a) by virtue of his membership of the board of directors or management or supervisory bodies of the issuer;b) by virtue of his holding in the share capital of the issuer;c) by virtue of exercising his function, profession, or duties;d) unlawfully or fraudulently, by virtue of his criminal activities.(3) Where the person referred to in par. (1) is a legal person, the prohibition shall also apply to the natural person who took part in the decision to carry out the transaction for the account of the legal person concerned.(4) The provisions laid down in pars. (1) to (3) shall not be applied to the transactions conducted if the person engaged in such transactions was discharging a contractual obligation as to acquire or dispose of financial instruments and if such contract had been concluded before that person possessed inside information.Article 246
Any person subject to the prohibition laid down in Art. 245 shall be prevented from:a) disclosing inside information to any other person, unless such disclosure is made in the normal course of the exercise of his activity, profession, or duties;b) recommending another person, based on inside information, to acquire or dispose of financial instruments to which that information relates.Article 247
The provisions of Art. 245 and Art. 246 shall be applied to any other persons who possess inside information if that person knows, or ought to have known, that it is inside information.Article 248
Any natural or legal person shall be prohibited from engaging in market manipulation.Article 249
The market operators shall adopt structural provisions aimed at preventing and detecting market manipulation practices.Article 250
(1) Persons discharging managerial responsibilities within an issuer of financial instruments and, where applicable, persons closely associated with them, shall be required to notify the NSC the transactions conducted on their own account relating to shares of the said issuer, or to derivatives or other financial instruments linked to them.(2) Persons who produce or disseminate research concerning financial instruments or issuers of financial instruments and persons who produce or disseminate other information whereby investment strategy is recommended or suggested using public information channels shall ensure that such information is fairly presented. These persons shall indicate the nature of their interests or possible conflicts of interest concerning the financial instruments in respect of which such research is conducted.(3) Any person professionally involved in transactions in financial instruments, who reasonably suspects that a transaction is carried out based on inside information or that such transaction might constitute market manipulation, shall notify the NSC without delay.(4) Public institutions disseminating statistics that may have a significant influence on markets shall disseminate them in a reasonable, fair, and transparent way.Article 251
The prohibitions provided for in this Title shall not apply to the transactions conducted in the context of monetary, exchange-rate, or public debt management policy carried out by the competent authorities of Romania or the Member States or by the European Central Bank or by the persons acting on behalf of those authorities.Article 252
The prohibitions provided for in this Title shall not apply to the transactions in own shares within buy-back programmes or to the transactions that are aimed at the stabilisation of a financial instrument where such transactions are carried out in compliance with the regulations of the NSC.Article 253
(1) The provisions of this Title shall apply to any financial instrument admitted to trading on a regulated market in Romania or in a Member State, or for which a request for admission to trading has been made, irrespective of whether or not the transaction takes place on that regulated market.(2) The provisions of Arts. 245 to 247 shall also apply to any other financial instrument not admitted to trading on a regulated market in Romania or in a Member State, but whose value depends on a financial instrument that complies with the conditions laid down in par. (1).(3) The prohibitions and the provisions laid down in this Title shall be applied to:a) transactions carried out in Romania or abroad in financial instruments admitted to trading on a regulated market situated or operating in Romania or for which a request for admission to such market has been made;b) transactions carried out in Romania in financial instruments that are admitted to trading on a regulated market in Romania or in a Member State or for which a request for admission to such market has been made.Article 254
(1) The NSC shall be the single competent authority that shall ensure that the provisions of this Title are applied.(2) The NSC shall exercise its supervisory, investigation, and control powers:a) directly, in respect of the powers referred to in Art. 255 lets. a), c), d), and h);b) in collaboration with other market undertakings, in respect of the powers referred to in Art. 255 let. f);c) in collaboration with other vested authorities such as: the Parquet of the Supreme Court of Justice, the Trade Register Office, and the Police, in respect of the powers referred to in Art. 255 lets. b), e), and g).(3) The provisions laid down in pars. (1) and (2) shall fall under the scope of professional secrecy.Article 255
In discharging its responsibilities, the NSC shall have at least the following rights:a) to have access to any document in any form whatsoever, and to receive a copy therof;b) to demand information from any person, including those who are successively involved in the transmission of orders or who conduct market operations, as well as their principals. That being the case, the NSC has the right to hear such person;c) to carry out on-site inspections;d) to require existing telephone records concerning the transmission of orders or records of other existing data;e) to require the cessation of any practice that is contrary to the provisions of this Law;f) to suspend the transactions in those financial instruments;g) to require the competent judicial authorities to order the freezing injunction on the assets of the persons who are guilty of breaching the provisions of this Law;h) to request temporary prohibition of professional activity.Article 256
(1) The NSC may take appropriate administrative measures and may impose administrative sanctions against the persons responsible for the infringement of the provisions of this Title and of the provisions adopted in its implementation.(2) The NSC shall issue instructions, in accordance with Community provisions, with regard to the technical requirements for the application of the provisions of Art. 226 pars. (1), (3), (4), (5), and (7) and of Art. 250 pars. (1) to (3).Article 257
The NSC shall impose sanctions against any natural or legal person, which does not cooperate, in accordance with the provisions of Art. 254 par. (2) and Art. 255. Title VIII Financial auditArticle 258
(1) The financial and accounting statements and those concerning the operations of any entity subject to the authorization, supervision, and control of the NSC, according to this Law, shall be drawn up in compliance with the specific requirements established by the Ministry of Public Finance and with the regulations of the NSC and shall be audited by natural or legal persons, active persons, members of the Financial Auditors Chamber of Romania.(2) The arrangements for the implementation of this Title shall be established based on a protocol between the NSC and the Chamber of Financial Auditors of Romania.Article 259
(1) The financial auditor shall:a) draw up a financial audit report according to the audit standards issued by the Financial Auditors Chamber of Romania;b) draw up, within 30 days, based on information provided by administrators, additional reports, in accordance with the financial audit standards and with the reporting framework defined by the international accounting standards and by the regulations of the NSC regarding the operations claimed by the shareholders representing at least 5% of the total voting rights. The administrators shall be required to provide the auditors with all requested information. The additional report will be published on the NSC website;c) provide additional services in compliance with the principle of independence.(2) If the administrators and the auditors referred to in par. (1) let. b) fail to answer the demand within the stated time limit or if the published report does not contain the information as required by the reporting framework, the shareholders will be able to approach the court of law in the territorial range of which the company has its registered office in order to appoint another financial auditor or expert as to resume the procedure of drawing up and presenting an additional report, such that the report will be forwarded to the court of law and notified to the parties, and the opinion of the auditor or expert will be published in the NSC Bulletin.Article 260
(1) The financial auditors must report, without prejudice to the provisions of the Code regarding the ethical and professional conduct and Financial Audit Standards, within 10 days, any fact or act relating to the business of regulated entities, they have become aware of while exercising their specific duties and, fact or act which:a) constitutes a major breach of the normative acts governing the conditions for the authorization and operation of the audited regulated entity;b) is likely to affect the continuity in the activity of the audited regulated entity;c) may lead to a disclaimer of opinion, to the impossibility to form an opinion, or to an adverse opinion.(2) The financial auditors shall be required to report immediately to the NSC any fact or act, of those referred to in par. (1), of which they have become aware while conducting the audit, in connection with an entity controlled by the audited entity as defined in Art. 2 point 16 let. b).(3) At the written request of the NSC, the financial auditors must:a) forward to the NSC any report or document of which the audited entity has been notified;b) forward to the NSC a statement indicating the reasons for the cessation of the audit contract, regardless of their nature;c) forward to the NSC any report or document containing the observations of which the management of the audited entity has been informed.(4) The fulfilment in good faith by the financial auditor of the obligation to inform the NSC in accordance with pars. (1) and (2) shall not be deemed as non-observance of the obligation of professional secrecy incumbent on him pursuant to the law/ethical code or contractual clauses, it not being possible to entail the liability of the financial auditor in question.Article 261
The NSC has the obligation to ensure confidentiality of received information, in accordance with the provisions of Art. 260, except for that which is of a penal nature.Article 262
The NSC may require in writing the financial auditors of the companies admitted to trading on a regulated market or of the companies that offer securities to the public or request admission to trading on a regulated market to provide all the necessary information.Article 263
Where major shortcomings are established in the professional activity carried on by a financial auditor in connection with entities subject to authorization, control, and supervision by the NSC, the NSC shall apprise the Financial Auditors Chamber of Romania and shall require the adoption of appropriate measures, in accordance with the legislation in force. Title IX Special-administration measures and administrative liquidationChapter I General provisionsArticle 264
(1) The NSC shall enforce special-administration measures if it establishes that an authorized entity is contemplating insolvency or if any of the administrators, executive directors, or auditors of such entity are guilty of:a) infringement of the provisions of this Law or of the regulations issued by the NSC, which has caused or is likely to cause major prejudices or which endangers the smooth operation of the capital market;b) infringement of any requirement or restriction contained by the operation permit;c) inadequate management of financial instruments and funds belonging to investors.(2) Where major malfunctioning is ascertained, the NSC may demand the dissolution of the board of directors of the authorized entities.Chapter II Special administration of entities authorized by the NSCArticle 265
(1) The special administration shall be performed by a qualified natural or legal person appointed by the NSC.(2) The decision regarding the enforcement of special administration shall be published in the NSC Bulletin and in two nationwide daily newspapers. Art. 266 - (1) The special administrator shall take over all the powers of the board of directors of the authorized entity undergoing special administration.(2) The special administrator shall set out measures for the preservation of the assets and realization of claims for the benefit of the investors and of other creditors.(3) The shareholders' right to vote, as regards the appointment and removal of administrators, the shareholders' rights to dividends, the activity of the board of directors and of the internal auditors, and their right to receive payment shall be suspended during the special administration.Article 267
(1) Within maximum 60 days from appointment, the special administrator shall provide to the NSC a written report on the financial condition of the authorized entity and shall attach documents referring to the valuation of the assets and liabilities, the progress in the realization of claims, the cost of maintaining the assets, and the situation of debt liquidation.(2) Within 15 days from receiving the report of the special administrator, the NSC shall decide, if the case requires, on extending the activity of the special administrator for a limited period of time.(3) If his activity is extended, the special administrator shall submit to the NSC, on a monthly basis, the assessment of the financial condition of the authorized entity.Article 268
(1) If the NSC becomes aware, based on the report of the special administrator, of the fact that the authorized entities have recovered financialy and meet prudential supervision requirements, as laid down by NSC regulations, the special administration measures shall cease.(2) The decision to put an end to the special administration shall be published in accordance with Art. 265 par. (2).Article 269
(1) Where the requirements under Art. 268 are not met and the NSC does not decide on the extension of the special administration, the operation permit of the regulated entity shall be withdrawn, and the NSC may either initiate the administrative liquidation or notify the competent court of law in order to open judicial reorganization and bankruptcy proceedings. If the judicial reorganization and bankruptcy proceedings are opened, the requirements laid down in the Law no. 64/1995 on the judicial reorganization and bankruptcy proceedings, as further amended and supplemented, shall not be necessary.(2) The court competent to settle the request of the NSC regarding the opening of the judicial reorganization and bankruptcy proceedings against authorized entities is the court of law within the territorial scope of which that entity has its registered office.(3) The provisions of the Government Ordinance no. 10/2004 on the judicial reorganization and bankruptcy proceedings of credit institutions, to the extent of their compatibility, shall also be applied to the authorized entities undergoing special administration and whose authorization has been withdrawn by the NSC. The words debtor credit institution in the normative act mentioned above shall be read as entities authorized by the NSC, and the words National Bank of Romania shall be read as NSC.(4) For the purposes of this Chapter, insolvency is the state of the authorized entity in one of the following situations:a) manifest inability to pay due debts out of own available liquidities;b) withdrawal of the authorization of regulated entity, in accordance with this Law and the regulations of the NSC, as a result of the impossibility of the authorized entity undergoing special administration to recover financially.(5) The appointment of the liquidator by the court of law shall be made with the agreement of the NSC.(6) In discharging their responsibilities, which involve the application of regulations issued by the NSC, the court of law, the official receiver, and the liquidator may request the opinion of the NSC acting as capital-market regulatory and supervisory authority.(7) The bankruptcy proceedings shall be closed when the official receiver approves the final report, when all the funds or assets of the bankrupt authorized entity are distributed and the unclaimed funds are deposited with the State Treasury. Following a request by the official receiver, the court of law shall order the closing of the judicial reorganization and bankruptcy proceedings. The order shall be communicated in writing and/or through the press in at least two nationwide daily newspapers to all creditors of the debtor, to the Trade Register Office, to the NSC, and to the liquidator. Any amounts left shall be remitted to the State Budget after a 5-year period.Chapter III Administrative liquidationArticle 270
(1) If the NSC orders the administrative liquidation of the entity, such liquidation shall be carried out in accordance with the procedure established by the legislation applicable to the dissolution and liquidation of companies and by the regulations of the NSC.(2) For the purposes of the administrative liquidation, the liquidator shall be appointed by the NSC. Title X Liabilities and sanctionsArticle 271
The breach of the provisions of this Law and of the regulations adopted in its implementation shall receive sanctions covering administrative, disciplinary, civil, or criminal offences, as appropriate.Article 272
The following acts shall be considered civil violations:a) breaching the provisions of this Law or of the regulations issued by the NSC in the implementation of this Law;b) carrying out, without an authorization or by breaching any of the conditions or restrictions provided by the authorization, of any activities or operations for which this Law or the regulations of the NSC require authorization;c) failure to comply with the prudential rules and rules of conduct;d) failure to comply with the measures set out by control acts or following such control acts;e) failure to comply with the obligations as to audit the financial statements or having such financial statements audited by unauthorized persons.Article 273
(1) The civil violations referred to in Art. 272 shall be sanctioned by:a) warning;b) fine;c) complementary sanctions in respect of civil violations, applied as appropriate:1. suspension of authorization;2. withdrawal of authorization;3. temporary suspension of particular activities and services that fall within the scope of this Law.(2) The NSC may disclose to the public any measure or sanction imposed for the failure to comply with the provisions of this Law and of the regulations adopted in its implementation, except for the situations where, by public dissemination, the normal operation of the market would endangered or significant prejudices would be caused to the parties involved.Article 274
(1) The civil violations referred to in Art. 272 shall be established by the natural persons vested to this effect by the NSC, which discharge responsibilities on the supervision, investigation, and control of compliance with the legal provisions and regulations applicable to the capital market.(2) Upon receipt of the ascertaining documents from its agents, the NSC may order the extension of investigations, taking of preservation measures, and/or hearing of the persons concerned and the sanctioning of the investigated acts, respectively.Article 275
(1) In applying the sanction, account shall be taken of the personal and real circumstances of the act and conduct of the author.(2) For the repeated commission of a civil violation by a person within a 3-year period, or by a person sanctioned in the last three years for which the statute of limitation is not applicable, the sanction established shall be applied cumulatively in the maximum amount of the fine in respect of the last civil violation committed.(3) Where two or more civil violations are ascertained, the greatest sanction shall be applied with an increase of up to 50%, as appropriate.Article 276
The limits of the fines shall be established as follows:a) between 0.5% and 5% of the paid-up share capital, according to the severity of the act committed, for legal persons;b) between ROL 5,000,000 and ROL 500,000,000, for natural persons, as updated by order of the NSC's chairman;c) between one half and the full amount of the transaction carried out by committing the acts referred to in Arts. 245 to 248 of Title VII.Article 277
(1) The NSC may apply sanctions to the natural persons who, acting in the capacity of administrators or legal representatives, or exercising, de jure or de facto, management functions, or exercising professional activities governed by this Law, may be held responsible for that civil violation due to failure to prevent it, although they could and should have prevented it.(2) The natural persons referred to in par. (1) shall be also held for the remedy of prejudices to property caused by the act deemed as civil violation. If several persons may be held for the act, they shall be jointly held for compensation in respect of the prejudice caused.Article 278
(1) The time frame for the statue of limitations concerning the application and execution of the sanction is of three years.Article 279
(1) Intentional commission of the acts referred to in Art. 237, par. (3), Arts. 245 to 248 shall be considered criminal offence and punished by imprisonment from 6 months to 5 years or by fine within the limits laid down in Art. 276 let. c) and additionally imposing the prohibition referred to in Art. 273 par. (1) let. c) point 3.(2) The accessing with intent by unauthorized persons of the electronic trading, depositing or clearing and settlement systems shall be considered a criminal offence and shall be punished by imprisonment from 6 months to 5 years or by fine within the limits referred to in Art. 276 let. c).Article 280
As regards the procedure for the establishment and ascertainment of civil violations, as well as for the imposing of sanctions, the provisions of this Law shall derogate from the provisions of the Government Ordinance no. 2/2001 on the legal treatment of civil violations, approved with amendments and additions by the Law no. 180/2002 as further amended and supplemented. Title XI Transitional and final provisionsArticle 281
(1) The NSC shall establish, by regulations, the time limit within which the regulated entity must become compliant with the provisions of this Law, period which shall not exceed 18 months from its entry into force.(2) The authorizations issued to the regulated entities before the entry into force of this Law shall remain valid. The regulated entities shall be required that, within the term set out in par. (1), they submit the amendments of and/or additions to the documents based on which authorizations have been granted, in order to comply with the provisions of this Law and to register them with the NSC Register.Article 282
(1) The applications for authorization which are not solved or which do not comply with the provisions of the law must be withdrawn or completed within 30 days from the entry into force of this Law.(2) Failure to comply with the provisions of par. (1) shall entail the rejection of the application.Article 283
(1) Where the acquiring or increase of a participation in the share capital of a regulated entity is carried out by breaching the legal provisions and the regulations issued in the application of this Law, the voting rights relating to such participation shall be suspended de jure. Those shares shall be taken into account in establishing the quorum required for the general meeting of the shareholders.(2) The NSC shall require those shareholders to sell, within 3 months, the shares relating to the participation the NSC has not approved. If the shares are not sold within that term, the NSC shall require the regulated entity to annul those shares, to issue new shares bearing the same number, and to sell them, the proceeds from the sale being allotted to the original acquirer after deducting any sale expenses.(3) The board of directors of the regulated entity shall be responsible for the implementation of the measures required to annul the shares, according to par. (2), and to sell the newly issued shares.(4) If due to a lack of buyers the sale did not take place or if only a partial sale of the new shares was performed, the regulated entity shall immediately diminish its share capital by the difference between the registered share capital and the share capital held by the shareholders with voting rights.Article 284
(1) The formation of the central depositary shall be carried out within the term set out in Art. 281, par. (1).(2) The entities that supply registration services shall be required to make available to the central depositary the registers of the companies traded on the regulated markets or within the alternative trading systems. The terms and procedures shall be established by regulations issued by the NSC.(3) By way of derogation from the provisions of Art. 124, Art. 143, Art. 146, and Art. 157, until the expiry of the term set out in par. (1), the Bucharest Stock Exchange may carry on clearing, settlement, depositing, and register activities, as well as any ancillary activities in connection with securities and financial instruments, through specialised departments, separated from the trading activity.Article 285
(1) By way of derogation from the provisions of Title II Chapters I and III of the Law no. 31/1990, as of the general meeting of the Bucharest Stock Exchange Association, which decides upon the transformation of the Bucharest Stock Exchange into a joint-stock company, the assets of the Bucharest Stock Exchange shall be become the assets of the S.C. Bursa de Valori Bucure�ti - S.A. (The Bucharest Stock Exchange).(2) Until the general meeting of the Bucharest Stock Exchange Association, referred to in par. (1), the Bucharest Stock Exchange shall proceed with the stock-taking and revaluation of assets. A fraction of the revaluated assets shall be transformed into the share capital of S.C. Bursa de Valori Bucure�ti - S.A., which will be equally divided among the members of the Bucharest Stock Exchange Association, registered at the time of the general meeting of the Bucharest Stock Exchange Association, referred to in par. (1).(3) S.C. Bursa de Valori Bucure�ti - S.A. shall be the legal continuator and the successor to the rights and obligations of the Bucharest Stock Exchange, maintaining the same name.(4) On the date of the general meeting of the Bucharest Stock Exchange Association, referred to in par. (1), the committee of the Bucharest Stock Exchange shall become the Board of Directors of S.C. Bursa de Valori Bucure�ti - S.A., having the same composition: the members of the Bucharest Stock Exchange committee shall become the members of the Board of Directors of S.C. Bursa de Valori Bucure�ti - S.A. until the expiry of their mandate or until the next general meeting of shareholders, if their mandate has expired.(5) The committee of the Bucharest Stock Exchange shall appoint an attorney to carry out the formalities of registration and licensing of S.C. Bursa de Valori Bucure�ti - S.A., until the date of the general meeting of the Bucharest Stock Exchange Association, referred to in par. (1).(6) On the date of the registration of S.C. Bursa de Valori Bucure�ti - S.A. with the Trade Register Office, the Bucharest Stock Exchange Association shall be dissolved de jure.Article 286
(1) By way of derogation from the Law no. 31/1990, as regards the investment companies' shares issued in accordance with the provisions laid down in Art. 4 of the Law no. 133/1996, in the property of the original holders, the limit established under Art. 103 of the Law no. 31/1990 may be exceeded only subject to the decision of the management company or of the board of directors, with the approval of the NSC, and in accordance with its regulations.(2) The shares acquired in accordance with the conditions set out in par. (1) may be used, following the decision of the board of directors, with the approval of the NSC, in order to diminish the share capital or to adjust the quotations of its own shares on the capital market.(3) By way of derogation from the Law no. 31/1990, the amendments to the articles of incorporation of the investment companies, for compliance with the provisions of this law, shall be registered with the Trade Register Office, pursuant to the decision of the board of directors or of the management company, as appropriate, subsequent to obtaining prior authorization issued by the NSC.(4) The investment companies are required to comply with the provisions of this Law within maximum 18 months from its entry into force.(5) Within 30 days from the entry into force of this Law, the independent registers have the obligation to assign serial numbers to all shares issued by the investment companies.(6) The board of directors of the investment companies are required to convene, according to the provisions of the Law no. 31/1990 and of par. (5) of this Article, the extraordinary general meetings of shareholders so as to amend the articles of incorporation according to the provisions of this Law, within 60 days from its entry into force.Article 287
S.C. Bursa Monetar-Financiar� �i de M�rfuri Sibiu - S.A. (the Securities and Commodities Exchange Sibiu), S.C. Bursa Rom�n� de M�rfuri - S.A. (the Romanian Commodities Exchange), and the brokerage firms of the shareholders members of the two exchanges shall be required to align with the provisions of this Law within maximum 18 month from its entry into force.Article 288
(1) The provisions of the following articles shall enter into force at the time of accession of Romania to the European Union:a) Art. 37 to Art. 43;b) Art. 111, Art. 112, and Art. 113 par. (1);c) Art. 124 par. (4);d) Art. 192.(2) Until the accession of Romania to the European Union, the entities having their registered offices in the Member States may carry on activities regulated by this Law, without having to be provided with an authorization based on reciprocity, under the cooperation agreements concluded by the NSC with the competent authorities of the home Member States. The supervision of these entities shall be conducted under the terms of those agreements.(3) The NSC shall inform the European Commission:a) of the authorization of any company, which is the subsidiary of a parent undertaking, according to in Art. 2, par. (1), points 6 and 27, within the scope of a non-Member State, as well as of the structure of the group of the parent undertaking;b) any time the parent undertaking referred to in let. a) acquires a holding in a company authorized by the NSC such that the latter would become its subsidiary;c) of any difficulties which the companies authorized by the NSC encounter in establishing themselves or providing investment services in any non-Member State.(4) The NSC shall transmit to the European Commission, at the latter's request, information regarding:a) any application for authorization of any company that is the subsidiary of a parent undertaking, according to Art. 2, par. (1), points 6 and 27, within the scope of that non-Member State;b) any notification whereby the NSC is informed, in accordance with Art. 18, par. (2) and Art. 61, that the parent undertaking referred to in let. a) intends to acquire a holding in a company authorized by the NSC, such that the latter would become the subsidiary of that parent undertaking.(5) The entities of the non-Member States that conduct in Romania activities governed by this Law shall not benefit from a more favourable treatment in relation to that applied to the entities of the Member States.Article 289
(1) The Annex to the Government Expeditious Ordinance no. 25/2002 for the approval of the Statute of the Romanian National Securities Commission, as published in the Official Gazette of Romania, Part I, no. 226, of 4 April 2002, passed with amendments and additions by the Law 514/2002, shall be amended and supplemented as follows:1. For paragraph (3) of Article 1, there shall be substituted the following paragraph:(3) On request, the NSC shall report to the Commissions for budget, finance, and banks of the Senate and Chamber of Deputies, to the Economic Commission of the Senate, and to the Commission for economic policy, reform, and privatisation of the Chamber of Deputies on the activity carried out in compliance with the legal provisions regarding the confidential and classified information.2. For Article 6, there shall be substituted the following article:Art. 6 - (1) The NSC may take part in the activity of similar international organizations and may become a member of these organizations.(2) The NSC shall cooperate with the competent authorities of the Member States and, based on reciprocity, with the competent authorities of the non-Member States whenever necessary, in order to fulfil its obligations, making use of the powers granted by this Law.(3) The NSC shall grant assistance to the competent authorities of the Member States, particularly as regards the exchange of information and cooperation in investigation activities. This type of assistance shall include, without being exhaustive:a) provision of public or non public information on, or related to, a natural or legal person that is the subject of regulation, supervision, or control by the NSC;b) provision of copies of the records kept by regulated entities;c) collaborating with persons who hold information on the subject of an investigation.(4) The NSC shall issue regulations regarding the procedure in respect of the cooperation with the competent authorities of the Member States, in accordance with the Community legislation in force.3. At Article 7, after paragraph (2), there shall be inserted paragraphs (2^1) and (2^2) as follows:(2^1) The obligation of professional secrecy may not be prevent the NSC to discharge its legal responsibilities.(2^2) The confidential information received by the NSC in the course of its duties may be used only in the following situations:a) in order to verify the compliance with the requirements for the authorization of regulated entities, to enable the supervision, on consolidated or unconsolidated basis, of the activity of the regulated entity, in particular with respect to the capital adequacy requirements, accounting and administrative procedures and internal control mechanisms;b) for the purposes of imposing sanctions;c) within administrative complaints and actions brought against acts issued by the NSC.4. For paragraph (15) of Article 7, there shall be substituted the following paragraph:(15) The regulations and instructions issued by the NSC shall be approved by order of the chairman of the NSC. The order for approval shall be published in the Official Gazette of Romania, Part I. The full texts of the approved regulations and instructions shall be published for enforceability in the NSC Bulletin.5. For paragraph (1) of Article 11, there shall be substituted the following paragraph:Art. 11 - (1) The members and employees that work or have worked for the NSC, as well as the representatives and employees of the entities to which the NSC has delegated one or more prerogatives, granted to it by the law, must comply, as regards the information obtained in the course or as a result of exercising their duties, which has not been disclosed to the public, with the legal treatment applicable to professional secrecy. For the purposes of this Law, the transmission of information under Art. 6 pars. (2) and (3) shall not be considered an infringement of this obligation.6. At Article 13, after paragraph (2), there shall be inserted paragraphs (4) and (5) as follows:(4) The quota set out in par. (2) lets. a) and e) shall be also applied to the alternative trading systems.(5) The quota set out in par. (2) let. b) shall be also applied to other collective investment undertakings, other than UCITSs.7. At Article 14, after paragraph (3), there shall be inserted paragraph (3^1) as follows:(3^1) If necessary, the expenses relating to the organization and operation of the National Securities Commission shall be financed, in part or in full, from the State Budget or from the special funds of the Government.Article 290
(1) This Law shall enter into force within 30 days from its publication in the Official Gazette of Romania, Part I.(2) The NSC shall issue regulations for the implementation of this Law within maximum 12 months from its entry into force.(3) The regulations issued by the NSC before the entry into force of this Law shall remain valid until the adoption of the new regulations issued pursuant thereto, unless provided otherwise.(4) The legal provisions relating to trading companies shall be applicable to the entities governed by this Law to the extent to which they are not contrary to it.Article 291
(1) On the date of the entry into force of this Law, the following shall be repealed:a) the Government Expeditious Ordinance no. 26/2002 on the undertakings for collective investment in transferable securities, as published in the Official Gazette of Romania, Part I, no. 229 of 5 April 2002, approved with amendments and additions by the Law 513/2002;b) the Government Expeditious Ordinance no. 27/2002 on the regulated markets for commodities and derivatives, as published in the Official Gazette of Romania, Part I, no. 232 of 8 April 2002, approved with amendments and additions by the Law 512/2002;c) the Government Expeditious Ordinance no. 28/2002 on securities, investment services, and regulated markets, as published in the Official Gazette of Romania, Part I, no. 238 of 9 April 2002, approved with amendments and additions by the Law 525/2002, as further amended and supplemented;d) Art. 2 par. (4) and Art. 7 of the Law no. 133/1996 regarding the transformation of Private Property Funds into investment companies, as published in the Official Gazette of Romania, Part I, no. 273 of 1 November 1996, and Art. 4 par. (3) of the Government Expeditious Ordinance no. 54/1998 for the finalization of the process of privatisation without consideration, as published in the Official Gazette of Romania, Part I, no. 503 of 28 December 1998, approved with amendments by the Law 164/1999;e) the Government Ordinance no. 20/1998 on the formation and operation of venture capital funds, as published in the Official Gazette of Romania, Part I, no. 41 of 30 January 1998;f) Art. 162, par. (1) of the Law 31/1990 on trading companies, as republished in the Official Gazette of Romania, Part I, no. 33 of 29 January 1998, as further amended and supplemented;g) the Government Ordinance no. 24/1993 regarding the regulation of the formation and operation of open-end investment funds and investment companies as financial-mediation institutions, as published in the Official Gazette of Romania, Part I, no. 210 of 30 August 1993, approved by the Law no. 83/1994;h) any other contrary provisions. This Law transposes the following Directives:a) Directive 93/22/EEC on investment services in the securities field, as subsequently amended, published in the Official Journal of the European Communities no. 141/11.06.1993;b) Directive 97/9/EEC on investor compensation schemes, published in the Official Journal of the European Communities no. 84/26.03.1997;c) Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), published in the Official Journal of the European Communities no. 375/31.12.1985, as subsequently amended;d) Directive 98/26/EEC of the European Parliament and of the Council on settlement finality in payment and securities settlement systems, published in the Official Journal of the European Communities no. 166/11.06.1998;e) Directive 2003/71/EEC on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC, published in the Official Journal of the European Communities no. 345/31.12.2003;f) Directive 2001/34/EEC on the admission of securities to official stock exchange listing and on information to be published on those securities, published in the Official Journal of the European Communities no. 184/06.07.2001;g) Directive 2003/6/EEC on insider dealing and market manipulation (market abuse), published in the Official Journal of the European Communities no. 96/12.04.2003;h) Directive 2002/65/EEC concerning the distance marketing of consumer financial services, published in the Official Journal of the European Communities no. 271/09.10.2002;i) Directive 1993/6/EEC on the capital adequacy of investments firms and credit institutions, published in the Official Journal of the European Communities no. 141/11.06.1993. ----
