Foreign Investment in Romania
Stock Exchanges

The Romanian stock market is dominated by two organized securities markets, the Romanian over-the-counter market ("Rasdaq"), and the Bucharest Stock Exchange ("BSE"). Openly traded joint stock companies are under the jurisdiction of the National Commission of Securities ("CNVM").

Listing Rules

Listing on the Bucharest Stock Exchange

In order to be listed on the BSE, a company must prove that it is an open company and is registered with the Office for Evidence of Securities ("OEVM"), a special department within CNVM. The application for listing on the BSE market must be performed through a brokerage company, which must be a member of the BSE Association (the "Initiator"). The Initiator represents the company before the BSE during the listing process and advocates the company's interests before the Listing Commission (the executive body) of the BSE.

The company must file a standard form application with the BSE-Issuers Department, requesting a listing of the company's shares on the BSE market and must submit within 45 calendar days from such filing the following documents:

1. Presentation of the company, to be prepared in a standard form described by BSE’s regulations;
2. The Constitutive Act and Statute, the general meeting of shareholders’ decisions, the Additional Acts as well as all registrations/applications/correspondence with the Trade Registry;
3. Copies of the fiscal code and registration certificate;
4. The public offer prospectus;
5. The last financial-accounting review, certified by the independent external auditor and the last semester's financial-accounting review;
6. Personal data forms filled out and criminal records for each person having a management position in the company, as well as for the liaison person with the BSE;
7. Decisions of the management body of company on listing its shares on the BSE market;
8. Proof of registration of the company's shares with the OEVM;
9. Issuer’s statement regarding listing and maintaining the shares on the BSE market;
10. Statement of the company appointing the Initiator as its representative during all listing procedures.

The Listing Commission must issue a decision within three months from the date of the complete filing of all documents required.

The previously described procedure leads to the listing of company's shares on the Second Category Securities of the BSE. If the company is heavily traded among many shareholders, the company may then seek to have its shares listed on the First Category Securities of the BSE. To do so, the company must meet the following additional criteria:

1. The applicant must have net profit during the last two years, and for such purposes the financial profit shall not be aggregated;
2. At least 15% of the share capital must be held by at least 1,800 shareholders, excluding company's employees and concerned persons; and
3. Each of these shareholders have shares with a value exceeding ROL 100,000 and the 15% stake in the share capital includes more than 75,000 shares.

In addition, the applicant must file cash flow statements for the preceding year and a written business plan, as well as financial accounting reviews for the last two years.

Listing on the Rasdaq Market

The national regulatory body responsible for approving the listing on the Rasdaq exchange is the National Association of Securities Brokerage Firms ("ANSVM"). Should the company decide to trade its shares on the Rasdaq market, it must file an application with ANSVM, which includes the following:

1. A notification stating company's intention to have its shares listed on the Rasdaq market, data identifying the applicant (registration certificate and fiscal code) and name and signatures of the company's representatives.
2. Contract with an independent shareholders registry; and
3. Certificate issued by OEVM proving that the company is an open company and is registered as a securities issuer with OEVM.

Although required for listing on the BSE, there is currently no requirement that a company seeking to list its shares on Rasdaq pay a listing tax or sign a listing contract. Thus, in practice a listing on Rasdaq is less expensive and more simply accomplished than a listing on BSE.

Disclosure Provisions

Companies listed on the BSE market have semi-annual and annual reporting obligations, in order to assure transparency of the market and protection for investors. The BSE may also ask for additional information whenever it deems such data to be necessary. Such reporting obligations include, inter alia, the financial-accounting annual review statement certified by an independent auditor, the statement of profit and loss, the significant changes of the constitutive documents, list of dividends paid, and the minutes of proceedings of the last general meeting of shareholders.

Besides these periodic reporting obligations, companies whose shares are listed on the BSE market has the obligation to regularly provide information to the BSE, which essentially includes data covering all of the important events in the corporate and business life of the company.

For all listed open companies, regardless if listed on BSE or Rasdaq, the reporting requirements are the same. Under Regulations No. 2 of 1996 on "Periodic and Continuous Information by Securities Issuers", all companies registered with the OEVM as issuers of securities (shares) have reporting obligations to the CNVM. Such obligations consist of submitting current semi-annual and annual reports regarding all corporate and business events that might interest the investors and be necessary to assure transparency of the market.

The deadlines for submitting these reports are:
1. Fifteen days from the occurrence of an important event;
2. Forty-five days from the end of the first semester of the financial year, attaching the financial accounting situation certified by internal auditors; and
3. Ninety days from the end of the financial year, attaching the financial accounting situation and the external audit report.

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