THE INSURANCE OVERSIGHT COMMISSION - YES, THE CSSPP and the CNVM - NO Compensations for the former overseers of the financial markets- paid selectively

The huge severance packages owed to the former overseers of the stock market, of private pensions and the insurance market (CNVM, CSA and CSSPP) - up to 19 times their monthly wage - is the "hot" topic which the Financial Oversight Authority (ASF), the successor of the three institutions has begun its operations with.

The representatives of the ASF yesterday wrote, in a press release, that the Authority is in the process of implementing a new compensation policy, which includes, among others, no compensation packages if the mandate of the members of the Board of Directors is interrupted prior to the deadline, after the vice-president of the Authority, Mircea Ursache also stressed the "bizarreness" of these stipulations in the internal regulations of each institution, in an interview he gave on Tuesday, in the press.

"The severance packages of the former leaders of the regulators which were merged into the ASF (up to 9 in the case of the CNVM and up to 19 in the case of the CSA) have been paid to the former entities according to the contracts concluded at the beginning of their terms", the press release of the ASF issued yesterday states.

The representatives of the Authority also said that, from the date the ASF began its activity (April 29th, 2013) and until the present day, the ASF hasn't paid any severance package, as its policy does not allow the payment of any compensation in case the mandate of any executive or non-executive member of the management ends early.

The former president of the Romanian National Securities Commission, Mrs. Carmen Negoiţă, told us that during her term, which ended on April 29th, no compensation packages were paid.

"I don't know whether at the CSA or the CSSPP they granted this kind of payments or not, but no severance packages have been paid at the CNVM during my term", Carmen Negoiţă said yesterday.

Mircea Ursache hinted that former commissioners of the CNVM have received compensations, even though they had carried their terms through to the end.

He said, in Tuesday's interview: "There are two categories of former commissioners: the ones who are still in place and are counselors at the ASF, specifically Bogdan Chetreanu, Gabriela Anghelache, Cătălina Sava, and others who have become non-executive members in the new structure, specifically Lorand Kralik, Gheorghe Albu, Dorina Mihăilescu.

This is bizarre, because these things have gotten out of control. I can understand paying severance packages when the term is interrupted before it's expired, but they shouldn't be paid when the term is over".

However, Carmen Negoiţă said that the three commissioners whose term expired last year, Bogdan Chetreanu, Gabriela Anghelache and Cătălina Sava, did not receive any amount as compensation.

The internal regulations of the CSSPP, do not stipulate any severance packages, according to information from the former Commission.

Thus, the former commissioners of the CSA, whose terms ended on April 29th, are the only ones to have been paid severance packages, according to some market sources.

• The ASF wants to cut wage expenses by 15%

The ASF intends to reduce the number of employees by 15% (down to approximately 460 people), according to the press release it issued yesterday, which also states that this would result in a reduction of the wage expenses at least equivalent to the number of employees cut.

"Just like we used to do until now, the staff of the Financial Supervision Authority will be paid out of its revenues, as the ASF is self-financed and it not supported by the state budget", the press release also states.

According to the representatives of the institution, the ASF has adopted a policy of transparency when it comes to wage expenses: "The biggest salary in the ASF is that of its chairman, the equivalent of 14,000 Euros/month. The salary for the position of president of the ASF has been established using three criteria: - the level of wages in the National Bank of Romania; -the salary level of the management of regulated companies in the market (insurance companies, collective investment entities, private pension funds); - the wages paid in similar European institutions".

The new salary policy of the ASF stipulates the elimination of all the bonuses granted to the management "intended to distort the salary policy and which have contributed to the compensation excesses of the former authorities (for example the compensation for each Board meeting)".

Also, according to the aforementioned quote, the management of the ASF is not allowed to conduct any other compensated activity, aside from teaching.

The inconsistency of the intentions announced by the ASF, compared to the statements of the top officials of the former CNVM, makes us praise the new pricing policy inaugurated by the Authority, because the new one seems to be the same as the old one.

It took an entire investigation for us to succeed in finding out that yes, among the predecessors of the ASF, an institution, the CSA which did indeed pay out severance packages.