EnglishWhen the Romanian National Securities Commission decided to suspend for two weeks the operating license of SSIF "Broker" Cluj, I found out and subsequently wrote in an article published in "BURSA", that the Bylaws of the CNVM is unconstitutional because it grants it a series of prerogatives that in theory allows its commissioners to evade any supervision.
Among the provisions of the Bylaws that demonstrate its unconstitutionality, I have chosen to back up my claim using the first paragraph of section (7) of Article 7 of the CNVM Bylaws:
"CNVM is the only authority entitled to decide on the expediency, on the evaluations and qualitative analyses that its decisions are based upon [...]"
No democratic Constitution allows the subjectivity implied by the notions of "expediency", "evaluation" and "analysis" to be among the prerogatives of a State institution. The Romanian Constitution doesn"t either.
At the time I had uncovered this anomaly in the Bylaws of the CNVM, I had no idea I was overstating the obvious.
In fact, the lawyers of "Nestor Nestor Diculescu Kingston Petersen" had challenged the unconstitutionality of the CNVM Bylaws as far back as 2007, in a lawsuit which was on trial at the Bucharest Court of Appeal, which went over to the Constitutional Court in the meantime.
The attorneys claim that the CNVM Bylaws infringes on the provisions of the Constitution:
"Our unconstitutionality claim is looking at the juridical nature of the Romanian National Securities Commission, because through its attributions and procedures, it has placed itself outside of the Constitution, and the provisions we challenged and the law itself in general infringe on the Constitution." (Brief no. 4317/2/2007 Bucharest Court of Appeal, the Administrative Court)
By reviewing what the Constitution allows, the lawyers found that the jurisdiction of the CNVM does not feature anywhere and they mentioned the following:
"- in violation of the provisions of art.. 24 paragraph (2) of the Constitution, during the proceedings, the people undergoing verification are not allowed to receive assistance from a lawyer, meaning their right to an attorney is violated;
- the verification of the securities is made by the same institution that decides whether the legal entities or individuals which are being investigated infringed on the law or not. This confusion between the investigatory and the ruling function violates the provisions of art. 21 paragraph (3), art. 124 paragraph (2) of the Constitution and the principles of the rule of the law, which state that the judicial system must be impartial, and the proceedings should be fair;
- the Romanian National Securities Commission produces evidence from its own activity, which is another fact that provides reasons to doubt its fairness.
- the debates are not public and they are not contradictory."
The lawyers claim that this combination of prerogatives and procedures turn the CNVM into an "extraordinary court", with an "extraordinary jurisdiction", which is forbidden by art. 126 paragraph (5) of the Romanian Constitution.
The lawyers proved that because of the way the CNVM Bylaws was passed (using an Emergency Ordinance), it is ungrounded.
The issue of the constitutionality of the CNVM bylaws is of course unknown to the general public; it is a specious issue, involving a rather obscure institution of a specialized market, which only consists of a few thousands accounts out of a population of 22 million people.
For those of us who are involved in the capital market in one way or another, the issue is crucial. And if this political regime, will most likely have other priorities, I am however sure that at some other time, we will have an Emergency Ordinance that will pull the CNVM down from its pedestal.
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