The ATS of the Stock Exchange debuts with foreign stocks

• 41 brokers asked to be allowed to access a market with just one issuer listed

More than half of the domestic brokerage firms have rushed to request access to the ATS system of the Bucharest Stock Exchange (CAN-ATS), which was inaugurated yesterday, almost half a year after having received the license of the CNVM. The application from brokerages comes as their fees from the BSE are shrinking by the minute, causing them to look for additional sources of income.

For the moment, the ATS of the BSE only features one issuer, "Daimler" AG, the manufacturer of "Mercedes" cars, but brokers promise that they will bring the stocks of other reputed companies to the ATS, provided investors interest exists. It is not an accident that the shares of "Daimler" were the first to be listed on the ATS, since the decision to bring them over to Bucharest was made by BCR following the consultations with the management of the Bucharest Stock Exchange. The moment which was chosen for the launch also has a special meaning, as the Bucharest Stock Exchange is celebrating 15 years of activity in the post-communist era this week.

"It was one of the intentions of the Bucharest Stock Exchange, we wanted to celebrate the 15 years of operation", Valerian Ionescu said. He is the head of the capital market division at BCR, the company that brought Daimler"s stock to the ATS and will be acting as a market-maker for the stock. He went on to say: "We had a list of stocks to choose from, and we picked Daimler. We were interested in providing investors with the possibility to trade the shares of an industry that wasn"t present on the BSE, namely the automotive industry".

Even though the trading of "Daimler" stock in Bucharest is a first for the Romanian stock market domestic stock market and the entire Eastern Europe, as the officials of the BSE said yesterday, trading these shares may not necessarily be a first for domestic investors.

Some of them have already had access to "Daimler" shares by trading on the international stock exchanges, using the brokerage firms that offered access to those markets. However, Valerian Ionescu said that trading Daimler shares on the ATS has several benefits for domestic investors: "One benefit is that trading and settlement are done in the national currency, and the shares are kept in the Romanian Central Depository". Investors need to search for information about "Daimler" themselves, since the company is not required to report to the Bucharest Stock Exchange, like it is on the Frankfurt Exchange, for instance.

"I recently checked and Daimler shares were traded in about 38 trading venues. The company is only required to report on the regulated market, and investors on the ATS need to search for information about the companies themselves, as the company has very little obligations to report to the ATS", Valerian Ionescu said.

In order to become a market-maker for "Daimler" stock in Bucharest, the brokers of BCR have borrowed shares from the German market, hoping to gain from the difference in spreads between Bucharest and Frankfurt.

• How long until the first domestic company comes to the ATS?

Even though the management of the Bucharest Stock Exchange has said that the ATS was intended for domestic companies that wanted to use the benefits of the stock market, but didn"t meet the requirements for being listed on the regulated market, the officials of the BSE later invited some of the smaller companies listed on the Rasdaq to move to the ATS.

Valentin Ionescu, the general manager of the Bucharest Stock Exchange, subtly dodged to answer the question about when we might see the first domestic company listed on the ATS. Ionescu also declined to say whether the Bucharest Stock Exchange received any feedback from the Rasdaq companies that were invited to the ATS.

"With CAN-ATS we are targeting companies that are already listed, which want to enter the stock market", the general manager of the BSE said yesterday.