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Investment firms

Law 247/2004 on the capital market and Regulation 32/2006 issued by the Romanian National Securities Commission (NSC), regarding the financial investment services, which replaced the Regulation 15/2005, stipulate the principle of freedom to provide investment services and activities within the territory of Romania by the investment firms authorised in a member state of European Union.

Investment firms authorized and supervised by the competent authorities of another member state may freely perform in Romania, directly or through a branch, those investment services and activities covered by the authorization obtained in their home member state. Ancillary services may only be provided together with the principal investment services provided in the Annex one to the new regulation.

Before providing any services or activities, any investment firm which intends to perform services or activities in Romania for the first time must communicate the following information to the competent authorities of its home member state:

  1. the fact that it intends to perform investment services and activities in Romania directly or through a branch;
  2. a programme of operations stating in particular the investment services and/or activities as well as ancillary services which it intends to perform directly or through a branch and whether it intends to use tied agents in the territory of Romania;
  3. identity of the tied agents, as the case may be; and
  4. information regarding the investor compensation scheme of which the investment firm is a member.

In case the investment firm chooses to perform the services and activities in Romania through a branch, it should also provide the following information: the organizational structure of the branch and the address from the home member state from where documents may be requested and the identity of the persons appointed to ensure the management of the branch.

The competent authority of the home member state shall, within one month from receiving all information, send it to the NSC. The investment firm should be registered in the NSC Register and it has to pay the registration tariff.

Any change of the information above-mentioned that might occur imposes to the investment firm the obligation to give written notice of the respective change to the competent authority of the home member state at least one month before implementing the change. The competent authority of the home member state shall inform the NSC of those changes.

The identity of the tied agents shall be published on the NSC's web page and Official Journal and also on the web pages of the regulated markets/ATS on which they will conduct their business. In cases where an investment firm uses a tied agent established in a member state outside its home member state, such tied agent shall be assimilated to the branch.

Investment firms from other member states which are authorized to execute client orders or to deal on their own account have the right of membership or have access to regulated markets established in Romania by means of any of the following arrangements:

  1. directly, by setting up branches in the host member states; and
  2. by becoming remote members of or having remote access to the regulated market without having to be established in Romania.

Investment firms from other member states have also the right of access to central counterparty, clearing and settlement systems in Romania for the purposes of finalizing or arranging the finalization of transactions in financial instruments.

The access of the investment firms to a regulated market or central counterparty, clearing and settlement systems in Romania shall be subject to the fulfilment of the rules issued by the operator of that market or system and approved by NSC.

Investment firms authorized in other member states who have established a branch in Romania should from time to time communicate to NSC the information concerning the activity of the branch.

By Cristian Vlaicu

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