THE REINTERPRETATION OF A DECISION OF THE ROMANIAN SECURITIES COMMISSION Oops, we made a mistake!

Thunder and lightning struck the capital market watchdog, the Romanian National Securities Commission, after it decided on March 17th (perhaps during a moment of heavenly bliss) that only agents registered in the Registry of the Romanian National Securities Commission can take over the subscription forms for public stock offerings.

However, some of the brokerage firms have very few agents registered with the CNVM, which means that the decision angered many people in the market. It wouldn"t have been such a problem, but the document in question didn"t do so well with the Ministry of the Economy, which will hold a sale for a stake of 9.84% of the shares of Petrom.

Even though Lorand Kralik, a commissioner of the Romanian National Securities Commission said on March 20th, 2011 that there was nothing preventing brokerages from registering as many agents as they wished and that the process to do so was relatively simple, the Commission was forced to provide additional details.

In fact, the subscription forms can be submitted by the entities which are part of the distribution group, including by any branches or agencies of the brokerage firms, and after that, the subscription forms would be taken over by the people certified by the Romanian National Securities Commission to perform the professional services stipulated in the law no. 297/2004 concerning the capital market", the Romanian National Securities Commission stated in a press release issued yesterday.

In other words, what the CNVM is saying is that in fact, its own decision of March 17th does nothing to change the existing legal environment.

Meaning it was pointless.

In reality, the document of March 17th, would have forced all those eager to subscribe in the offerings to crowd in the offices of the few agents of the brokerage firm which were registered with the CNVM.

In the case of "Petrom", where six consortiums were fighting for intermediating the offering, the decision for which the CNVM is now presenting a new interpretation, would have favored two of the competitors, which have more than 100 agents each, whereas the rest only have less than 20 registered agents each to fight the same battle over clients.

As BURSA wrote as early back as March 21st on the flaws of the decision of the CNVM issued on March 17th, and the Association of Brokers sent on Friday a press release in which it expressed its concern over the future of public stock offerings and urged the institutions in charge to come up with a quick and definitive solution to the situation, the Commission took the time to bring yesterday"s clarifications.

There was a little snag when publishing those too. A document concerning the decision of March 17th, sat for just 30 minutes on the website of the Commission, before being taken down. In the end, the Romanian National Securities Commission yesterday managed to tell us that maybe we had misunderstood the entire situation.

Except is wasn"t just us; or the brokers, or the Ministry of the Economy. Oops!

• The head of the OPSPI: "The winner of the call for tenders for the Petrom sale, to be announced in a few days"

The consortium that will intermediate the sale of the stake of 9.8% in "Petrom" owned by the Ministry of the Economy, will be announced in a few days, namely this week or early next week at the latest, said Victor Cazana, the head of the Office For The State"s Interests and Privatization in the Industry (OPSPI), who was present at the conference "The economic recovery through the Romanian Capital Market". He has expressed his hope that the process for the sale of the second block of shares in "Petrom" will be completed by year end, even though the initial deadline had been set for the end of March or early April.

Cazana stressed how important the sale of the 9.8% stake in Petrom and of the two stakes of 15% each in "Transgaz" and Transelectrica" were for the state and for the future of the domestic capital market.

"We share the anxiety of private companies, when we get close to the listing of some very important companies. We want these steps towards the capital market to be perfect", said Victor Cazana.

The head of OPSPI implied that he was aware of the interest that the sale of the stake in "Petrom" caused among foreign investors: "We want to come out with a series of stakes to sell on the domestic capital market, especially since the players that compete over the intermediation of the sale of Petrom are now watching us and we expect good advice from them. We are convinced that we are doing the right thing. We believe that the listing of these companies on the BSE will provide added value in the medium and long term and that the investors that will enter the Romanian stock market attracted by these deals will help make the market more attractive for other investors".

In the beginning of this month, the Minister of the Economy announced that it received offers from six bidding groups for managing the sale of a 9.8 percent stake in OMV Petrom SA (SNP). The secondary offering of "Petrom" stock, estimated at about 500 million Euros, will be the biggest in the history of the Bucharest Stock Exchange. (ŞTEFANIA CIOCÎRLAN)