The Bucharest Stock Exchange begins restructuring

• All of the employees of the BSE group will be submitted to a strict evaluation

• The board of the Stock Exchange wants to cut its employee expenses by 10%

• Together with the other companies in the group, the BSE could move to another headquarters, to cut costs

The current management of the Bucharest Stock Exchange is considering reorganization of the BSE Group, after the former Board of Directors also tried to cut expenses.

The Board of the Stock Exchange yesterday adopted a decision for the restructuring and streamlining of the BSE Group, after the managers of the Bucharest Stock Exchange and of other companies in the group met for a secret discussion in a mountain resort, according to sources.

Even though the broad strokes of the plan concern cutting personnel and rent expenses, this could also affect the development strategies of some of the Companies in the group, such as the Central Depository, which had announced that it would need to make major investments over the next years.

"An evaluation of the entire staff of the BSE Group (circa 150 employees) will be done by an independent firm specializing in human resources, as well as an evaluation of the cost of IT contracts, consumables, etc. We will also introduce a unitary procedure for group for negotiating the future procurement contracts on the Group level", Ciprian Zah, a member of the board of the Exchange said for BURSA. Ciprian Zah said that the goal of the reorganization is to cut employee expenses by around 10%, but he does not rule out the possibility of this figure being revised, depending on the results of the assessment.

"We will set the structure and number of employees based on the evaluation report", said Cosmin Gheorghiu, another member of the Board of the Exchange.

Furthermore, the Bucharest Stock Exchange may need to relocate from its current location near the Armenian Church to a different headquarters which would be shared among the companies in the Group.

"The analysis of the current costs also includes the logistics component. We are considering two solutions: either the Central Depository would move in with the Settlement House, the BSE and the Investor Compensation Fund, or the four companies could move to a new headquarters", said Ciprian Zah.

The cost cutting measures come as the Bucharest Stock Exchange is going through a difficult period, as the daily turnover has trouble exceeding one million Euros.

However, the officials of the Exchange deny that these measures have anything to do with the shrinking daily turnover of the BSE over the past weeks, and say that they needed to review the operations of the companies which are part of the BSE group to get a better overview of their activity.

"These actions are only being taken now because we needed to review the activity of the companies in the BSE Group to know the exact state of things. This documentation period overlapped with other activities, such as the launch of the ATS, the listing of the BSE, and the implementation of the structured products on the BSE. These decisions have no connection to the current liquidity of the BSE, these principles for coordinating the activities for the entire group were adopted in the General Shareholder Meeting of April 2009", Ciprian Zah added.

The Bucharest Stock Exchange has a market capitalization of 205.66 million lei, according to the price per share of 27.6 lei/share of yesterday"s trading session.

Last year, the BSE saw its net profit drop 21.6% over 2008, to 8.32 million lei. In 2007, when the stock market had reached historical highs, its net profit was 34.72 million lei.