FEE CUTS AND CHANGES IN REGULATIONS The ASF will no longer charge fees for trades involving government securities

The Financial Oversight Authority (ASF) will no longer charge any fees for government bonds trades on the Bucharest Stock Exchange, according to the new set of tariffs approved on Wednesday, which also lowered the fee for stock trades from 0.08%, to 0.06%.

The fee for government bonds trades was previously 0,0004%, and the registration fee for securities was 1000 lei, and it has been cut to zero for government bonds, and to 500 lei for other securities.

In doing so, the Authority follows the policy of the Bucharest Stock Exchange, which decided at the end of July, to charge no fees for government bonds dedicated exclusively to retail investors issued by the Ministry of Public Finances traded on the primary market (MFP) for issues of government bonds intended exclusively for retail investors. These decisions come as this kind of offer from the government is expected, ten years after the government stopped selling treasury certificates to the population.

Even though the representatives of the Ministry of Public Finance are saying that the issue of retail government bonds retail is a part of its strategy, no one can tell for sure whether it will be ready by autumn, like the BSE officials are hoping.

Enache Jiru, secretary of state in the Ministry of Finance recently told us: "The bonds issue is still in the intention stage, as there is no official data about it".

In June, the ASF announced that it will cut 25% off the stock trading fees, starting with September 16th.

The decision came as a result of investors having repeatedly criticized the level of fees on the Romanian stock market, and the ASF and the BSE were criticized by Duane Butcher himself, former chargé d'affaires of the US embassy in Romania, who said that the Romanian stock market is one of the most expensive in Central and Eastern Europe, due to the fees charged by the BSE as well as by the ASF.

The ASF has took the criticism to heart, but the BSE is still mulling it over. In a response to the BURSA newspaper, Ludwik Sobolewski, the CEO of the Bucharest Stock Exchange said, in June, that the BSE would continue to lower its "own" fees, for all the market participants, including the main trading fee, but it is unknown when that will happen.

• Rebates for turnaround trades as well

The ASF has also decided to lower its fee for the trades conducted outside the regulated markets and/or the alternative trading systems, such as turnaround trades, to 0.02%.

Turnaround trades are OTC trades (outside the trading systems) which have a stock exchange trade as a pair. Thanks to turnaround transactions, brokers that represent foreign investors can buy shares on the BSE, without having trading accounts opened in Romania, through domestic brokerages.

At the end of 2013, the fee for "turnaround" trades had reached zero, and then, the Authority started a promotion, between March 15th and September 2014, cutting the fee from 0.15% to 0.04%.

The ASF charges 10,000 lei for issuing an opinion representing an official response on matters concerning compliance with the law and the existing regulations, but this does not apply to requests sent by entities authorized, regulated and/or supervised by the institution.

The ASF has also taken the necessary measures to avoid the charging of dual fees for the same trades, at the time of the separation of the trading and post-trading accounts.

• New rules for General Shareholder Meetings

Issuers will be required to summon the General Shareholder Meetings and to provide the information pertaining to them in English as well, according to the amendments made to the Regulation no. 6/2009 concerning the exercising of certain shareholder rights in the general shareholder meetings of companies.

The ASF has decided that a shareholder can appoint one or more proxies through a power of attorney. If several such proxies are designated, the power of attorney will also have to specify the order in which the proxies in question may exercise their mandate.

Companies are required to provide shareholders with the right to vote by mail before the General Shareholder Meeting.

If shareholders decide to personally participate in the General Shareholder Meeting, their votes sent in by mail will be cancelled. In such cases, only the vote expressed personally or by proxy will be taken into consideration, according to the ASF.

The ASF has also changed regulations concerning IPOs, leaving the option of having the prospectuses be drawn up in a widely spoken foreign language: "If an issuer which originates from Romania intends to conduct an IPO/requests to be admitted for trading on a market that is regulated only in Romania, the prospectus will have to be drawn up at the very least in Romanian, unless the ASF agrees to the prospectus being drawn up in a foreign language that is widely spoken in the international financial sector".

But in every case where the IPO/the admission to trading of securities takes place in Romania, the existence of a synopsis in Romanian will be mandatory.

Thus, domestic investors may find themselves having to translate their own prospectuses, because that is what the ASF wants, or to only make investment decisions based on a synopsis alone. Aside from the fact that the measure is one that benefits the foreign investors, it is probably also intended to help avoid the embarrassing situation of the Electrica IPO, when discrepancies between the Romanian and the English versions of the prospectus occurred, which led to the document having to be amended.