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    The Government has approved the Draft Law amending and supplementing Law no. 24/2017 on issuers of financial instruments and market operations.

The Government has approved the Draft Law amending and supplementing Law no. 24/2017 on issuers of financial instruments and market operations.

Bucharest, 19 September 2024 – The draft law amending and supplementing Law no. 24/2017 on issuers of financial instruments and market operations has been approved by the Government. This draft was prepared by the Financial Supervisory Authority (ASF) and went through an extensive public consultation process, following which the Authority assessed all the comments received, thus bringing a number of novelties and improvements to the legislative act by taking on board the comments and proposals considered appropriate to fulfill the objective of developing and strengthening the capital market.

The objectives of this amendment to the regulatory framework are to provide protection and confidence to investors and to facilitate access to capital for companies, which implicitly means a boost for Romania’s economic development.

            ‘The adoption of this draft law is an important milestone in the process of consolidation and modernization of the capital market legislation, so necessary for it to weigh more and more in the national economy and to become attractive for as many categories of investors as possible, but also for issuers’, said Mr. Alexandru Petrescu, President of ASF.

The draft law approved by the Government is to be submitted to the Parliament for debate and approval.

‘This legislative initiative is a crucial step for the Romanian capital market and that is why we intend to request an urgent parliamentary debate in order to ensure the rapid implementation of these measures. In drafting the draft law, at ASF level, we have taken into account the evolution of the relevant EU legislation, the issues raised by the market, as well as those identified in the supervisory activity in the field of issuers. The draft law aims at transposing two European directives and at fulfilling some objectives of the National Strategy on the development of the capital market for the period 2023-2026’, said Mrs. Gabriela Horga, the ASF Vice President, coordinator of the Financial Instruments and Investments Sector of the Authority.

Among the most important amendments and additions to the legislation on issuers of financial instruments and market operations are:

Simplification of procedures and reduction of the time required to raise capital:

  • Time limit for exercising pre-emptive rights. Provisions are introduced whereby, by way of derogation from the general provisions applicable in this area, in the case of increases in the share capital of companies whose shares are traded on the capital market, the minimum period allowed for the exercise of the pre-emptive right is reduced from 30 days to 14 calendar days, but not less than 10 working days.
  • Publication and expeditious publication of decisions by the Official Gazette. Provisions are introduced establishing a maximum deadline within which the decisions on the modification of the characteristics of the issues/numbers of securities shall be submitted to the Trade Register Office (3 working days from the date of adoption of the decision), respectively a maximum deadline within which these decisions shall be published in the Official Gazette of Romania.

 

Enforcement of a judgment annulling or declaring nullity:

  • Provisions are introduced to regulate the manner of enforcement of a judgment definitively annulling or declaring null and void a resolution approving an increase in share capital.

 

Maintaining the obligation to prepare and publish the quarterly report:

  • Quarterly report. The quarterly report has been maintained, increasing the publication deadline from 45 days to 60 days. The maintenance of the quarterly report has resulted, for the sake of unity of approach and to ensure comparability of financial information, in the introduction of express provisions establishing that the provisions relating to the content/form of the half-yearly report also apply to the quarterly report, with an exception from the obligation to publish the directors’ report, which may be published optionally.
  • Half-yearly report. Where the issuer is required to prepare consolidated reports, the half-yearly financial report shall only contain the condensed consolidated half-yearly financial statements prepared in accordance with international accounting standards applicable to interim financial reporting and the other component documents of the half-yearly financial report and, optionally, the condensed half-yearly individual financial statements and the other component documents of the half-yearly financial report.

ASF is carrying out an extensive process of modernization of the regulatory framework aimed at strengthening the role of the capital market in the national economy and puts particular emphasis on the implementation of the provisions included in the National Strategy for the development of the capital market in Romania for the period 2023-2026.