The Romanian National Securities Commission (NSC) has issued Instructions number 5 regarding the notification procedures to be complied with by undertakings for collective investment in transferable securities (Ucits) from member states, effective from August 24 2007. The Instructions set out the notification rules both for situations where a member state Ucits markets units in Romania, and where a Romanian Ucits markets units in other member states.
According to the Instructions, a member state Ucits may sell its units directly in Romania, provided that it is registered with the NSC. Such Ucits must first inform the NSC of its intentions and submit various documents to the NSC. These include a standard notification letter, an attestation issued by the competent home member state authority ascertaining that the respective Ucits fulfils all mandatory national and EU provisions, financial data and other internal documents. The latest updated fund rules or instruments of incorporation, details on how the units will be marketed, the prospectus or a simplified prospectus for selling units, and information about how the information will be presented to investors, must also be included.
The documents attached to the notification letter should be in the latest form authorized by the competent authority from the member state of origin. All changes to the documentation or information provided initially to the NSC must be disclosed to the NSC.
A Ucits may sell its units in Romania two months after the complete documentation is submitted to the NSC, unless the NSC officially forbids the Ucits to market such units in Romania. An interdiction will be issued only when the NSC establishes that the Ucits does not comply with the law, or the Ucits does not complete its documentation within six months of the NSC's request.
The Instructions set out rules to simplify the procedure of preliminary notification for umbrella funds with a large number of sub-funds. For example, if new classes of units are issued by a sub-fund of an umbrella fund, such a fund has the obligation to notify the NSC and specify the objective criteria on which the issue was based. The two-month period does not apply in this case. The sub-funds of the umbrella may immediately start distributing units, unless objective reasons for the NSC to forbid such an action exist.
The activity of marketing units in Romania may be performed through:
- Romanian NSC-authorized financial investment companies and asset management companies
- investment firms and asset management companies authorized by the member states' competent authorities and authorized to perform services in Romania, after fulfilling the relevant notification procedures
- credit institutions in Romania authorized by the National Bank of Romania or credit institutions authorized by the member states' competent authorities, after fulfilling the relevant notification procedures
- branches of investment firms/asset management companies/credit institutions of non-member states, authorized in accord with the relevant procedure provided by Romanian legislation
If the Ucits' activity terminates, the arrangements for redemption and payment shall ensure that it complies with Romanian rights of units' holders, including those on units' redemption. Romanian Ucits authorized by the NSC and intending to market units in other member states must follow the notification procedure imposed by that member state, which is similar to the one described above.