IN ORDER TO SAVE DERIVATIVES, The management of Sibex is ready to drop the spot market

Sibex may drop the spot market, which is only hosting two issuers anyway (Sibex itself and Prodplast Imobiliare), if the shareholders approve the proposals for the General Shareholder Meeting scheduled for June 28th/29th.

The council of the Sibiu Exchange has summoned the shareholders, with summer in full swing, to approve some of the steps towards the creation of the Central Counterparty (CCP), an institution required by the EU for the settlement of derivatives, which requires a minimum capital of 7.5 million Euros.

Now, Sibex is coming with the proposal to disband the depository activities, reduce the share capital of Sibex, by 22.72 million lei (5.2 million Euros) and to distribute the money to shareholders. The previous attempt to start off the Central Counterparty project, which involved the shareholders of Sibex injecting more money failed, because the General Extraordinary Shareholder Meeting did not meet the necessary quorum.

The Sibiu Exchange only holds approximately 70% of the Sibex Depository, in other words it would only get 3.64 million Euros from the reduction of the share capital.

The amount could be used as a contribution to the creation of the local counterparty.

The shareholders will have to decide whether they approve the making by the Sibex Group of a contribution in cash of a maximum of 6.25 million Euros for the creation of the Central Counterparty, together with the Bucharest Stock Exchange group.

The two local exchanges, BSE and Sibex have begun the talks concerning the creation of a central counterparty, in the beginning of the year, but so far they have yielded no results.

The drastic reduction of the capital of the Central Depository also means that the Sibiu Exchange will lose its spot market, on which the only stocks listed are its own and those of Prodplast Imobiliare.

Aside from the shared project for the Central Counterparty, it would seem that each of the two stock exchanges are discussing alternative plans with foreign institutions.

The shareholders of Sibex will also decide as part of the General Shareholder Meeting the amendment of the articles of incorporation of the Stock Exchange, as the shares of Sibex will be traded on the regulated market for financial instruments managed by Sibex and/or on another regulated market or alternative trading system.

Considering the collaboration between the BSE and Sibex for the Central Counterparty, the most readily available market for the listing of Sibex would be the BSE itself.

For the same purpose of giving a boost to the Central Counterparty project, the management of the Bucharest Stock Exchange has summoned the shareholders, on June 27th/28th, to decide on whether to approve the participation of the BSE in the increase of the share capital of the Bucharest Clearing House (CCB), with a contribution in cash of 23,000,000 lei. The summoning came at the request of a group of shareholders comprising the Association of Brokers and five intermediaries.

The BSE tried to obtain the agreement of the shareholders for the increase of the capital of the Romanian Clearing House, but the General Extraordinary Shareholder Meeting of April, which also had other topics on the agenda, was not held due to the failure to meet the quorum.

At the time, some of the shareholders who preferred not to register for the meeting, precisely to prevent the quorum from being met, suggested that they would not sabotage a new general shareholder meeting that would concern the Central Counterparty issue.

The shareholders in question - mostly brokers - were against the new pricing policy proposed by the new management of the BSE, which stipulated the introduction of a fixed commission for brokerages.

The management of the Bucharest Stock Exchange had proposed for the General Shareholder Meeting of April participating with an amount between 10 million and 37 million lei to the capital increase of the Romanian Clearing House.

Whereas for the BSE, the derivatives aren't that important, and the creation of the Central Counterparty is more of an image exercise, for Sibex, the central counterparty is vital.