Deputies of the Economic Commission consider the 5% threshold for the FICs inadequate

• Mihai Tudose, the president of the Economic Commission: The initiative to raise the holding threshold for the FICs is beneficial, but the time is not right for it

• Even though they were called to express the opinion of the Romanian National Securities Commission, its representatives presented personal opinions

• "The Government does not support the adoption of the legislative proposal in its mentioned form", a document signed by PM Emil Boc said.

The chairmen of the five financial investment companies can now breathe a sigh of relief after the Commission for Economic Policy, Reform and Privatization of the Chamber of Deputies yesterday repealed the bill for raising the holding threshold in the SIFs (Financial Investment Companies) from 1 to 5%. The dismissal came at the end of a session which lasted less than 2 hours, with 11 deputies voting against the raising of the threshold and only 2 voting in favor of the proposal.

The debate was attended by Ioan Cuzman (the chairman of SIF Banat-Crişana), Mihai Fercală (chairman of SIF Transilvania), Petre Pavel Szel (hairman of SIF Muntenia), Tudor Ciurezu (vice-president of SIF Oltenia) and Liviu Doroş (vice-president of SIF Moldova).

Commissioner Bogdan Chetreanu and Radu Toia were invited to attend the session and to present the opinion of the Romanian National Securities Commission on the matter. No official of the Bucharest Stock Exchange attended the session of the parliamentary Commission.

Senator Ovidiu Marian, the man behind the draft bill, yesterday said that raising the holding threshold to 5% would help energize the domestic stock market and would allow investors in the FICs to exert their shareholder rights. The senator yesterday said during the debate: "Investors in the FICs are hindered in expressing their opinions, by summoning a General Shareholders" Meeting, or by adding new items to the agenda, since it is automatically assumed to be acting in concert, and they are required to hold a 5% stake in an FIC in order to be allowed to ask for it. The presidents of the FICs have this infallible weapon called "acting in concert" and they use it against the shareholders when the interests of the two groups diverge. The goal of the project is to defend the many who own a small number of shares".

The chairmen of the FICs defended themselves, claiming they are called to represent the interests of all shareholders, instead of just those of a small group of investors.

Even though they were invited to present the official position of the Romanian National Securities Commission on the matter, the representatives of the Romanian Securities Commission (CNVM) were taken to task by the Chairman of the Economic Commission, Mihai Tudose, for only expressing a personal opinion. When asked on a possible negative impact that the increase of the holding threshold in the FICs might have on small shareholders, commissioner Bogdan Chetreanu said: "Our analysis does not suggest any imminent danger for the minority shareholders of the FICs, since the raising of the threshold would increase the activity of SIF shares. We have to take into account the fact that companies listed on the European and American markets do not have such restrictions. However, this is a personal opinion, not that of the CNVM".

At the end of the debate, chairman Mihai Tudose suggested that the Commission repeal the bill to raise the holding threshold in the FICs to 5%, claiming the time was not right for such a change. He said: "The FICs represent 30% of the Romanian economy, but they have a larger weight of the viable economy, and they are handling the current crisis well. I was a member of the Commission, which a few years ago, voted in favor of raising the holding threshold to 1% and the shares of the FICs did very well afterwards. The initiative to raise the holding threshold is beneficial, but the timing is not right, which is why I propose the dismissal of the bill".

Some of the deputies that voted against the initiative said they based their decision on a document signed by PM Emil Boc, which mentions that the government does not support the adoption of the bill.

Last week, the bill had been approved by the Legal Commission and it is expected to go up for debate with the Budget and Finance Commission, in a few days.

BET-FI yesterday lost almost 5% yesterday, but the market was full of buyers

BET-FI, the index of the five financial investment companies, yesterday closed down 4.91%, to 27,342.78 points, after the Economic Commission voted against the raise of the holding threshold in the FICs. SIF "Transilvania" had the biggest drop (more than 9%), due to an order to sell 770,000 shares which found no bidder.

"What is interesting is that there were a lot of buyers that found shares of the FICs attractive at yesterday"s prices. True, there was a big selloff, but the pressure was relieved by the presence of buyers who generated significant volume", Paul Brendea, of brokerage firm "Prime Transaction", said for BURSA.