Narcisa Oprea: "We must regain investor confidence"

Reporter: How did you come to run for the position of member of the Board of Directors of the Bucharest Stock Exchange?

Narcisa Oprea: On a personal level, things are very simple. My professional experience was tightly connected to the stock market; in college I wrote a few articles for BURSA, I found out what intermediation meant at the Bucharest Stock Exchange, and after graduation I worked for more than five years on the team of the Bucharest Stock Exchange, and later, for a short period of time, I also worked at the Rasdaq Electronic Exchange. I've been working in the capital market sector for over 13 years, I grew up along with it, I learned as I did so. I started off with my experience in the Bucharest Stock Exchange, which for me was amazing, as it allowed me to accumulate major professional expertise, and then I moved on to working as a lawyer, which in itself is a wonderful experience, but which made me see things differently.

From my position as a lawyer, my desire was to exclusively work in the capital market sector, but in order to do that, we need a mature market. In order to have lawyers specializing in the capital market, we need a market that would provide them with enough work.

I think that there are many things to do, a lot of fine tuning to do to accelerate the growth of the capital market. For instance, if we look at corporate governance, even though it is a notion which is frequently used in statements or at conferences, it is an area which, from my point of view, there is very little done. I think more could be done in this area.

Again, I go back to my professional expertise. When I joined the Bucharest Stock Exchange, in the beginning of 1998, the Law of Companies had just been changed and everyone was hearing about the reference date for the first time. It was a self-teaching exercise, of learning for issuers and it proved to be a true success, including because of the real partnership between the Stock Exchange and the issuers.

This positive experience needs to be implemented when it comes to corporate governance. Because there are still major problems when it comes for the core elements, such as understanding and complying with the law no. 31 (ed. note: the Law of Companies).

The Stock Exchange can get involved actively. I am not saying it is currently not doing that, but perhaps it is not allocating sufficient resources.

And because I like the sector which gave me so much professional satisfaction, I think the time has now come for me to help consolidate it. Besides, the aficionados of the capital market know that once this sector captivated you, you will never be able to truly leave it. These are the reasons which made me run for the Board of Directors of the Exchange.

Reporter: The idea of implementing a dual management of the Bucharest Stock Exchange was brought up. How do you feel about it?

Narcisa Oprea: The Law of Companies provides two alternative systems for managing companies. I do not think that, on a theoretical level, a comparative analysis can be made to decide which one of the two systems is better. From my point of view, both systems are defined clearly enough that they can ensure the highest level of compliance with corporate governance standards. Thus, contrarily to what is being said publicly, I think neither of the two systems is closer or farther away from the principles of corporate governance. I also do not think that any failures of the BSE stem from the management system. Because if we look at the Bucharest Stock Exchange, we will find that there already is a separation between the executive management and the board of directors, since there is currently no director that also holds an executive position.

Perhaps switching of the BSE to the dual management system is a subject that needs to be reviewed, but it also has a preliminary requirement, and that is the fact that its success depends on having a team of executives of high professional caliber. I think it is an issue which needs to be debated, provided there is a solid fundament for it, and especially when it is not made due to cu contextual factors, such as the holding of new elections, if the current elections don't lead to the expected outcome.

Reporter: What do you think qualifies you for this position?

Narcisa Oprea: I like to think it is my expertise, because, as I was saying, I've been working for 13 years on the capital market; I was involved in several large scale and pioneering projects, which proved to me that even though it is difficult, tenaciousness and involvement can help you change things for the better.

Also, as a member of the management team of "Schoenherr" I have gained the experience and vision needed to contribute to the development of the BSE. We need to bring confidence to the market beneficiaries, to help them and support them, to solve the real issues that they are faced with.

Reporter: What program do you come before shareholders with? What are the directions that you see available for the development of the Romanian stock market?

Narcisa Oprea: There can be no capital market without investors. Nobody can force them to make trades. If they don't have confidence in the market, they will not invest. In order for investors to have confidence, there have to be attractive financial instruments, professional, diligent and fair intermediaries, a performing stock exchange compatible with the most important stock markets in the world, clear and simple rules which are implemented in a firm and indiscriminate manner, issuers that provide investors with accurate and correct information on time, professional oversight conducted by the competent authorities and not by the prosecutors. We can't keep finding that the main problem of the Stock Exchange is the lack of liquidity and to continue not doing anything of what is up to us to change that situation.

Once more, I want to emphasize the importance of corporate governance. Let's not forget that improving corporate governance is also on the European agendas and it is precisely for that reason that I think we need to accelerate our involvement on a European level, especially because European structures are flexible, open for dialog. Writing corporate governance codes or asking issuers to make statements of the "implement or have to explain" is not the most important thing; what is important is to apply the rules of corporate governance. If the exercise of applying the Corporate Governance Code of the BSE will be treated as a mere formal exercise, we will have already missed the first step towards raising the standards for the listed issuers.

Market rules are very important. All market participants are looking for simple rules, which are easy to implement. Unfortunately we keep stumbling over our own rules.

When in 2011 we have the officials of the Bucharest Stock Exchange arguing the semantics of what a conducting a public offering through the Bucharest Stock Exchange means, I think we have a major problem.

Then let's allocate some resources in this area and let's make sure that lawyers no longer get called to be asked how to fill out an order, how a trade is conducted, whether a trade on the "Deal" market is a form of market manipulation, what is inside information and what should be done with it.

I like working in this sector, but I would like to work on structuring some major and innovative projects, whereas we are currently wasting too much time with the clarification of norms that contradict each other or have no connection to reality.

An important segment is the dialog with potential issuers and with their shareholders, in particular with the Romanian State. A privatization program this ambitious, of such a scale, has never been initiated before.

If we look at what is going on, we find that this year, some of the public offers only received one intermediation bid. But I wouldn't jump to the conclusion that intermediaries aren't interested. It is illogical for intermediaries that have the ability to submit bids not to do so. So the explanation may lie somewhere else. That is why I think ongoing dialog and a true partnership with the Romanian government would be the best solution to make this program successful. I like to think that all the parties involved want the successful completion of this program and I am convinced that we have the ability to achieve that result.

Reporter: Do you think that investors are worried about the failure which happened in the summer, when the government tried to sell shares in Petrom?

Narcisa Oprea: Any investor is looking to make a profit. As long as the investors feel that they will make a profit, they will invest. Reviewing the causes of the failure, however, is also important and the conclusions of such a review should be taken on by the Romanian State, in order to avoid similar occurrences in the future. I don't think that investors are to blame for this future.

Reporter: What is your opinion on the evolution of the stock market so far? What are its successes and what are its failures?

Narcisa Oprea: If we make this analysis since the creation of the Bucharest Stock Exchange and up to the present moment, there is definitely progress.

If we look at the latest period, most definitely the market ratios are far below expectations. Of course, we are asking ourselves how much of this negative evolution is caused by the current financial climate. The prices and their volatility are just part of the problem, but the lack of liquidity comes from other sources. It's hard to answer such questions, but I am certain that regardless of these economic evolutions, which are beyond our control, there are many improvements that can be made.

As for the successes and failures, we need to remember that a significant part of the rules that apply in Romania also apply in European states. From this point of view, we speak the same language as investors from the European Union and things seem to be OK. But when we get into the details stage, there are numerous differences. Just for the sake of example, we find that the way that public offers happen on the developed markets of the EU are completely different than the way they happen here.

We need to be compatible with what is happening on the developed markets.

There is a major advantage being able to have major investment funds find here things that it is already familiarized with and I think that this talk can be extended to include public offers, nominee accounts and so on.

Reporter: What do you think the current management did wrong?

Narcisa Oprea: I am not a fan of criticism and I do not think that we should make an inventory of the good and the bad. But I do think that the Bucharest Stock Exchange needs a new vision and implicitly a new management and I hope that the next general shareholder meeting will bring about this change.

Reporter: Which of the shareholders of the BSE support you?

Narcisa Oprea: We will see that when the General Shareholder Meeting comes. I am convinced that the things I believe in are important and I can contribute to their achievement.