THE BOARD OF THE BSE, ONCE AGAIN DISREGARDED BY THE CEO King Sobolewski and Queen Tănăsoiu

A decision with major implications when it comes to the execution of trades on the Romanian stock market - the move to the two-day settlement cycle ("T+2", instead of "T+3"), starting on October 6th,- seems to have been made by two people - Ludwik Sobolewski, the CEO of the Bucharest Stock Exchange, and Adriana Tănăsoiu, the CEO of the Central Depository (DC), even though the brokers who were consulted by them told them that the market is not ready and have proposed postponing this measure until January 1st, 2015 (according to a letter sent by the Association of Brokers).

The date of October 6th, as a moment for the implementation of the measure, has not been selected randomly, as on the same day, similar measures will be taken by several European markets.

It would seem that the executives of the Romanian institutions want to go with the flow, more "for perception's sake", regardless of the consequences.

Some specialists consider that this measure will lead to an increase in the number of failed settlements.

Moreover, turnover may decrease at first, because brokers will be forced to turn down trades which they are not sure can be settled within two days, to avoid sanctions.

It would seem that the executives of the BSE and the Central Depository also want for the separation of the trading accounts and the post-trading accounts to be implemented on October 6th.

Dan Paul, the president of the Association of Brokers, writes in a letter addressed to the managers of the BSE and the Central Depository that the deadline set for the switch to the "T+2" settlement in the meeting with the participants in the clearing-settlement system organized by the Central Depository and the BSE, of July 14th, was not October 6th, and warns that the intermediaries have asked for the deadline for the accounts not to be set on the same date, "given the major risks it poses for the operation of the market".

According to him, the participants in the meeting considered that the date of January 1st, 2015, announced by the Central Depository as the deadline for the migration of the Romanian capital market to the "T+2" settlement, is far more realistic in terms of the time needed for the implementation of all the required changes.

Dan Paul further writes: "Even though we consider praiseworthy the intention of the Bucharest Stock Exchange and of the Central Depository to match the date when a significant number of the European capital markets will make the switch to the «T+2» settlement period, we think that the initiative should take into consideration the infrastructure that exists on the domestic stock market and its ability to implement the two projects within a very short delay".

Ludwik Sobolewski and Adriana Tănăsoiu made an agreement and sent us two letters, in response to the questions on the aforementioned topic, but they both worded them the same.

When asked whether the capital market was ready for these measures, each of the two gave us the same answer: "The Romanian stock market needs many changes that will turn it into an effective system for capital flows. We think that delaying this process would be tantamount to agreeing to the marginalization of the Romanian stock market".

Our question was whether the market was ready, what question did they answer?!

The project to separate trading and post-trading accounts is at an advanced stage and is on schedule, the BSE and the Central Depository told us.

Dan Paul asked the Boards of Directors of the two institutions whether they have approved the deadline for switching to the "T+2" settlement and the schedule for the separation of trading and post-trading accounts.

The question was probably asked more for the benefit of the Board of the Depository, because Dan Paul already knows the answer of the Board of the BSE, whose vice-president he is.

Ludwik Sobolewski and Adriana Tănăsoiu told us that the decisions of the Bucharest Stock Exchange and of the Central Depository concerning the aspects brought to their attention have been, are and will continue to be in line with the entire legislation and regulations applicable which are in effect and serve the interest of the stock market and its development strategy.

It is interesting how Sobolewski and Tănăsoiu have made the existence of the ASF, the Police and the judicial system obsolete, by establishing that their decisions will always be compliant with the legislation.

Hello?!

What questions are you actually answering?

Or is it actually hard for you to admit that you are disrespecting your bosses?

Both executives admit that you have made strategic decisions, but you seek to hide the fact that you are not habilitated to make them?

Besides, Ludwik Sobolewski did not bring any strategy before the shareholders.

Since the appointment of the new CEO, the directors of the BSE seem to have entered a general holiday - they are no longer receiving notifications about important decisions made by the company, they are no longer asked for their opinions, they are no longer getting answers to their questions.

The management of the market has lost control of it.

Now, the executives do whatever they please.

The way things are going, it won't be long the doorman of the Bucharest Stock Exchange will decide to move to "T+1".