Fondul Proprietatea Agrees To Be Listed On The Brokers" OTC Market

• Dan Paul: We have very few steps to go before we commission the mechanism

As listing a company on a regulated market such as the Bucharest Stock Exchange or the London Stock Exchange appears to be something increasingly difficult to achieve, Fondul Proprietatea (Property Fund, FP) has decided that the non-regulated over-the-counter market that the Romanian brokers are planning to commission in a few weeks is sufficient.

The Fondul Proprietatea Supervisory Board on Monday morning approved the transfer of FP shares to the trading platform titled Romanian Over-the-Counter (ROTC), a non-regulated market, whose operational regulations are being defined these days.

"Fondul Proprietatea will sign an addendum to the already existing contract with the Central Depository to explicitly state that they agree to the traded on the ROTC," Dan Paul, President of the Brokers" Association and one of the initiators of the ROTC project, told BURSA.

For the time being, the implementation of the project has exceeded the initial deadline of 1 October. The delay was caused by extended discussions between the Brokers" Association and the National Securities Commission (CNVM) regarding the memorandum of association of the ROTC and the regulatory body, which should license it to operate.

"We have very few steps to go before we commission the OTC," Paul further told BURSA, adding that more details would be communicated at the end of the week.

Transactions in Fondul Proprietatea shares should account for approximately 90 per cent of the overall turnover of the ROTC, according to the initiators of the project, which is also described as a way to generate business for the brokers to help them survive the crisis.

Besides the FP shares, the ROTC will also include shares in companies that have been de-listed off the Bucharest Stock Exchange and companies that have never been listed.

Nicolae Ivan, a Consultant with Cartesian Group, said: "The ROTC will cleanup a great deal of the uncertainty, which is now surrounding transactions in FP shares." Ivan is a Consultant for the U.S.-based fund Cartesian Group, which controls approximately 3 per cent in FP. He believes that making Fondul Proprietatea shares available for trading on the ROTC will reduce current uncertainties about trading in FP shares.

"I have been an advocate of this type of a trading system since four years ago," Nicolae Ivan told BURSA. "Any organized market is good and will be more transparent than the market currently hosting transactions in Fondul Proprietatea shares. In fact, mankind has had this types of markets for 250 years and there was never any problem," he added.

Ivan believes that listing the FP on the Bucharest Stock Exchange is "a very remote prospect," especially considering that the FP does not yet have a management unit.

"I believe that the future management unit of the FP will need 9-to-12 months to prepare the Fund for listing," Ivan added.