CNVM forces 200 hundred issuers listed on the Rasdaq to comply with the reporting requirements

Almost two hundred issuers from the Rasdaq market received a warning from the Romanian National Securities Commission (CNVM) for failing to comply with the reporting requirements. The issuers were summoned to deliver to the Commission and to the Bucharest Stock Exchange the financial statements for the years 2008 and 2009, the reports pertaining to the General Shareholder Meetings which contained the approval of those statements and the shareholder decisions. The issuers involved in ongoing lawsuits have also been summoned to notify the Commission and the Stock Exchange on the current status of those respective lawsuits.

Claudia Sava, a commissioner of the Romanian National Securities Commission, informed us that the action of the institution comes as several companies listed on the Rasdaq were notified in 2010 on the reporting requirements that they were expected to comply with, but they refused.

"In February last year, the Commission notified 1,472 companies listed on the Rasdaq through recommendation letters whereby they were warned that they need to submit their financial annual statements and to comply with the reporting requirements. About 500 issuers did not comply, which is why they were sent a second letter last summer. The Commission undertook a similar action in the mid 2,000s and since then it has constantly warned the issuers and pressured them into complying with the reporting requirements".

The shares of some of the companies that were sanctioned by the CNVM haven"t been traded in years, such as "Geopec" Piteşti (symbol:GEPI), whose stock was last traded in July 2002, while other companies are suspended from trading, as they have entered insolvency, such as for instance "Foremar" Baia Mare (symbol:FORE).

The ordinances of the Commission come as the status of the Rasdaq and of the issuers listed on it have been put up for public debate, as the capital market watchdog drew up a draft instruction which requires the Rasdaq issuers to summon their shareholders to have them decide on whether they want to move to the regulated market (as long as they meet the requirements) or to the Alternative Trading System (ATS) of the BSE. Some of the minority shareholders of the Rasdaq have protested against the initiative of the Commission, as they were concerned that issuers that switch over to the ATS would be held to less strict requirements than the ones listed on the Rasdaq.

Conversely, the management of the BSE has maintained that the companies that move to the ATS would be required to comply with stricter regulations than those listed on the Rasdaq.