IN THE FIRST SEMESTER OF 2010 The "Rompetrol" takeover bid helped the CNVM return to profit

In the first semester of 2010, the net profit of the Romanian National Securities Commission (CNVM) edged slightly above 1 million lei, after it had posted a loss of 10 million lei in the first six months of 2009, according to information obtained by BURSA.

The Commission ended the first quarter with a loss of 1.41 million lei, but managed to cover its deficit and to return to profitability in the second quarter of the year, stemming from the amount of 1 million Euros it earned following the fees for the public takeover bid of "Rompetrol Rafinare", launched by the Kazakhs of "Rompetrol Group".

The capital market watchdog almost missed the bulk of the fees from the public takeover bid of "Rompetrol Rafinare", after the Kazakhs bought majors stakes on the Deal market, for which the CNVM charges lower fees. However the capital market watchdog reacted harshly and later forced the Rompetrol Group to pay a fee of 2% for the Deal transactions by which it acquired around 15.7% of the shares of RRC, which amounted to around 1 million Euros.

Since the beginning of the year, the Commission was extremely careful with its cash, as its accounts were frozen for a while following a ruling of the Court of Bihor which forced the CNVM and brokerage firm Mobinvest to pay 7 million lei to the former customers of the latter. Thus, since the beginning of the year, the CNVM has proposed that investment companies (including the five SIFs) pay their fees of 0.1% of their net assets six months in advance, with a 5% discount.

The representatives of the Commission said that only part of the companies to which this proposal was addressed have decided to follow through.

At the end of June 2010, the CNVM reported operating revenues of 21.9 million lei, double the figures of H1 2009 of 10.34 million lei. However, the Commission had an operating profit of just 966,464 lei, on the back of operating expenses of around 21 million lei.

For comparison, in H1 2009, the capital market watchdog reported operating expenses of 20.7 million lei and operating losses of 10.46 million lei. The Commission had a financial result of profit of 53,515 lei (compared to 205,060 lei in H1 2009) and a profit of 34,604 lei from its extraordinary activities (compared to 35,013 lei in H1 2009).

At the end of June 2010, the Commission had 7.21 million lei in cash, up significantly YOY, from 2.76 million lei. The current receivables of the Commission increased in the first semester to 2.3 million lei, compared to 1.3 million lei, in H1 2009. At the same time, the short term debts of the Romanian National Securities Commission increased from 2.37 million lei at the end of June 2009 to 3.9 million lei. The wage bill for the employees of the Romanian National Securities Commission decreased slightly, from 1.18 million lei (in H1 2009) to around 1 million lei.