jul - aug 2009 financial services industry monthly bulletin
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July – August 2009
Domestic 4
Legislative changes 4
Regulatory updates 5
International 8
Financial Services Industry Monthly Bulletin 3
Legislative changes
Amendments to the Banking Law
I. Qualified participations
Interdiction to purchase new shares
issued by the credit institution
(Romanian legal person) for the
holders of qualified participations in a
credit institution who had their voting
rights suspended and which no longer
meet the requirements of the law
regarding the quality of the
shareholding of a credit institution or
exercise on it an influence that may
jeopardize the prudent administration
of the credit institution;
The shareholders meetings of the
credit institution may be held by the
shareholders whose voting rights are
not suspended; the majority
requirements for validly taking
shareholders resolutions shall apply to
the total share capital held by those
shareholders;
Obligation to sell the shares acquired
without taking into account the
objection raised by National Bank of
Romania (“NBR”) within 3 months as
of communication of the objection.
II. Remedy in case of prudential indicators’
deterioration
In order to remedy the deterioration of
the prudential and performance
indicators of a credit institution
(Romanian legal person) or in order to
prevent the occurrence of a
predictable significant deterioration of
nature to jeopardize the ability of the
credit institution to meet the
prudential requirements, NBR may:
o request the persons owning
qualified participations to
financially support the credit
institution by increasing the share
capital or by granting eligible
loans to be included in the
calculation of the own funds,
according to the specific
regulations issued by NBR and/or
by swapping such loans into
shares;
o forbid the total or partial
distribution of profits through
other destinations than those
provided by law as being
mandatory, until NBR attests the
remediation of the credits
institution’s financial standing
III. Employment agreements concluded with
directors/members of the directorate
The employment agreements of the
persons designated to exercise the
mandate of director/member of the
directorate must be terminated within
6 months after the entry into force of
this law. Otherwise, the employment
agreements shall be terminated by law
at the end of the 6-month period.
Law no. 270 of 7 July 2009 (for the approval of
the Government Emergency Ordinance no.
25/2009 for amending and completing the
Banking Law - Government Emergency
Ordinance no. 99/2006 on credit institutions and
capital adequacy) was published in Official
Gazette Part I, no. 483 of 13 July 2009.
For a consolidated version of the Government
Emergency Ordinance no. 99/2006 on credit
institutions and capital adequacy, please click
here
4
Regulatory updates
Banking
Issuer: National Bank of Romania (“NBR”)
Banks’ liquidity
NBR Norm no. 7/2009 amended NBR Norm no.
1/2001 on banks’ liquidity. Norm no. 7/2009
was published in the Official Gazette no.
468/7.07.2009.
For the full contents of Norm no. 7/2009 please
click here
Interest rates for mandatory reserves
4.90 % per year for the minimum
mandatory reserves established in lei;
2.47 % per year for the minimum
mandatory reserves established in
Euro;
0.89 % per year for the minimum
mandatory reserves established in US
Dollars.
The said rates apply for the application period
24.06.2009 ‟ 23.07.2009 and were approved by
NBR’s Circular no. 25/2009 published in the
Official Gazette no. 489/14.07.2009.
For the full contents of Circular no. 25/2009
please click here
Classification of loans and investments and the
establishment, adjustment and use of specific
credit risk provisions
NBR Regulation no. 13/2009 amends
NBR Regulation no. 3/2009 regarding
classification of credits and placements
as well as the set up, regulation and
use of specific credit risk provisions.
Regulation no. 13/2009 was published
in the Official Gazette no.
537/3.08.2009.
For the full contents of Regulation no.
14/2009, please click here
NBR Regulation no. 14/2009 amends
the Methodological Norm no. 12/2002
for the application of NBR Regulation
no. 5/2002 regarding the classification
of credits and placements and the set
up, regulation and use of specific
credit risk provisions. Regulation no.
14/2009 was published in the Official
Gazette no. 537/3.08.2009.
For the full contents of Regulation no.
14/2009, please click here
The interest reference rate for August 2009 is
9.00% per year
The above interest reference rate is provided as
per NBR Circular no. 27/2009, published in the
Official Gazette no. 537/3.08.2009.
For the full contents of Circular no. 27/2009,
please click here
Financial Services Industry Monthly Bulletin 5
Issuer: NBR and the National Securities
Commission (“NSC”)
Credit risk treatment for credit institutions and
investment companies based on internal rating
models approach
Joint Order no. 6/43/2009 issued by NBR and
NSC approves the joint Regulation 12/5/2009,
amending NBR and NSC Regulation no.
15/20/2006 on credit risk treatment for credit
institutions and investment firms based on
internal rating models approach. Order no.
6/43/2009 was published in the Official Gazette
no. 602/31.08.2009.
For the full contents of Order no. 6/43/2009,
please click here
Issuer: Fund for Guaranteeing Banking Deposits
(“FGBD”)
Transmission of status of the guaranteed
depositors to FGBD
FGBD issued Regulation no. 3/2009 on the
transmission to the FGBD of the status of the
guaranteed depositors. FGBD issued Regulation
no. 3/2009 was published in the Official Gazette
no. 599/31.08.2009.
For the full contents of Regulation no. 3/2009,
please click here
Participation of Romanian branches of EU credit
institutions to the FGBD
FGBD (or “Fund”) issued Regulation no.
4/31.08.2009 regarding the participation to the
Fund of the Romanian branches of credit
institutions authorized in other member states
(the “Regulation”).
Applicability: the Regulation is applicable to
Romanian branches of credit institutions
authorized in other EU member states if the
officially recognized guarantee scheme in the
home member state to which the credit
institution participates provides for a guarantee
threshold lower than the one provided by the
applicable Romanian legal provisions (Ordinance
no. 39/1996), respectively EUR 50,000 and/or a
narrower scope for deposit guarantees.
Such branches shall participate for the difference
between the guarantee thresholds and/or for the
deposits not guaranteed by the guarantee
scheme in the home member state.
Procedure: Romanian branches of credit
institutions authorized in other EU member
states may request to become party to the
banking deposit guarantee scheme by filing a
request with the Fund, accompanied by a
Romanian authorized translation of the
regulations for deposit guarantees in the home
member state, applicable to the scheme to
which the respective credit institution
participates.
The Fund shall obtain an agreement in principle
for the mutual cooperation from the deposit
guarantee scheme to which the credit institution
participates in the home member state and shall
communicate to the branch the requirements to
be observed as a participant to the Fund, within
90 days as of the date of filing the request.
Value of the contribution: For the computation
of the initial contribution, the Fund shall request
to the National Bank of Romania the
classification of the branch in one of the
categories of credit institutions provided by
Government’s Emergency Ordinance no.
99/2006. The amount of the initial contribution
shall be the equivalent of 0.5 % of the initial
capital required under Romanian law for the
category of credit institution the branch has
been categorized in.
Effects of the renouncing to/withdrawal of the
quality of participant to the Fund: The deposits
attracted by such branches continue to be
guaranteed by the Fund until the maturity date
of the deposits. The initial contribution shall not
be reimbursed.
Entry into force: The Regulation entered into
force after 5 days as of publication in the Official
Gazette. The Regulation has been published in
the Official Gazette no. 599/31.08.2009.
For the full contents of Regulation no.
4/31.08.2009 please click here
6
Calculation of the solvency margin of the
insurer/reinsurer, minimum solvency margin and
value of the safety fund
Change of the minimum value of the
safety fund
General insurances: The minimum value of the
safety fund shall be RON equivalent of EUR 2.3
million and RON equivalent of EUR 3.5 million if
the insurer subscribes one or more risks set forth
under each of the classes 10 to 15 mentioned
under title B «General Insurances» of Appendix
1 of Law no. 32/2000.
Life insurances: The minimum value of the safety
fund shall be RON equivalent of EUR 3.5 million;
Reinsurance activity: The minimum value of the
safety fund shall be RON equivalent of EUR 3.2
million.
Regulation of the obligation to proceed
with a share capital increase if the
available solvency margin drops below
the value of the safety fund, namely
General insurances/life insurances/ reinsurances:
If the available solvency margin drops below the
value of safety fund, the Board of Directors and /
or the Managing Council are / is immediately
required, to convene the extraordinary general
meeting of shareholders in view of increasing
the company’s share capital. The duration of this
operation (including contribution of the
subscribed share capital), shall not exceed 60
calendar days as of the date the shareholders
meeting was convened.
The above amendments were approved through
ISC’s Order no. 12/2009. Order no. 12/2009 was
published in the Official Gazette no.
543/5.08.2009 and will become effective as of
November 1, 2009.
For the full contents of Order no. 12/2009,
please click here
Insurance
Issuer: Insurance Supervisory Commission
(“ISC”)
Amendments regarding the amount and the
payment term of the functioning tax owed by
insurance companies and insurance brokers
Starting with July 2009, the amount of the
functioning tax for insurance companies and
insurance brokers is 0.3 %, applied for the
period for which the tax is owed to the gross
insurance premiums cashed in for insurance
companies, respectively applied to the income
realized from the brokerage activity, for
insurance brokers. The functioning tax is payable
monthly by the insurance companies and
quarterly by the insurance brokers.
The said amendments are brought by ISC’s
Order no. 11/2009 published in the Official
Gazette no. 512/27.07.2009.
For the full contents of Order no. 11/2009 please
click here
Norms regarding the Guarantee Fund
ISC issued Order no. 10/2009 approving the
norms concerning the guarantee fund. Order
no. 10/2009 was published in the Official
Gazette no. 516/28.07.2009.
For the full contents of Order no. 10/2009,
please click here
Financial Services Industry Monthly Bulletin 7
Procedure for supervision of the application of
international sanctions in the insurance field
ISC issued Order no. 13/2009 approving the
norms setting out the procedure for supervizing
the application of international sanctions in the
field of insurances
Order no. 13/2009 was published in the Official
Gazette no. 555/10.08.2009.
For the full contents of Order no. 13/2009 please
click here
The right of establishment and freedom to
provide services in Romania in the insurance field
ISC issued Order no. 14/2009 approving the
norms regarding the insurance/reinsurance
activity in Romania based on the right of
establishment and freedom to provide services.
Order no. 14/2009 was published in the Official
Gazette no. 569/14.08.2009.
For the full content of Order no. 14/2009, please
click here
ISC issued Order no. 15/2009 approving the
norms regarding the right of establishment and
freedom to provide services on the Romanian
territory by insurance/reinsurance agents,
authorized and/or registered by a competent
authority from a member state of the European
Union. Order no. 15/2009 was published in the
Official Gazette no. 569/14.08.2009.
For the full contents of Order no. 15/2009,
please click here
Insurers authorization
ISC issued Order no. 16/2009 approving the
norms for insurers’ authorization. Order no.
16/2009 was published in the Official Gazette
no. 569/14.08.2009.
For the full contents of Order no. 16/2009,
please click here
Capital markets
National Securities Commission (“NSC”)
Regulation on the exercise of shareholders’
rights within shareholders meetings
The regulation is applicable as regards entities,
having their head-office located in Romania and
listed on a regulated market and transposes the
provisions of EU Directive no. 2007/36/CE
regarding the exercising of certain rights of the
shareholders within the shareholders meetings.
Main provisions of the Regulation pertain to:
„ Summoning procedure of the
shareholders meeting;
„ Rights of minority shareholders
(representing at least 5% of the share
capital) to request supplementing the
agenda
„ Reference date
„ Provisions related to the participation
of the shareholders within the
shareholders meeting and voting
through electronic means
„ Appointment of representatives
Order of the Romanian Securities Commission
no. 44/2009 for the approval of Regulation no.
6/2009 regarding the exercise of the
shareholders’ rights within shareholders
meetings was published in the Official Gazette
no. 588/25.08.2009. For the full contents of
Regulation no. 6/2009 please click here.
8
Technical provisions on risk management
Directive no. 2009/83/EC of 27 July 2009
(“Directive”) amends certain Annexes of
Directive 2006/48/EC of the European Parliament
and of the Council as regards technical
provisions concerning risk management.
The Directive provides for the Member States’
obligation to adopt and publish, by 31 October
2010 the latest, legislative measures and other
administrative provisions necessary to comply
with the Directive. These national measures and
provisions must apply from 31 December 2010.
For the full contents of Directive no. 2009/83/EC,
please click here
New rules on credit rating agencies, bank capital
requirements, cross-border payments and e-
money as well as a programme to support the
effectiveness of EU policies
The Council of the European Union announced
on 27th of July 2009 that it has adopted new
rules on credit rating agencies, bank capital
requirements, cross-border payments and e-
money as well as a program to support the
effectiveness of EU policies.
Please click here for the full contents of the press
release issued by the Council.
EU Council’s decision regarding the existence of
an excessive deficit in Romania
EU Council issued on 7 of July 2009 decision no.
2009/590/EC regarding the existence of an
excessive deficit in Romania. The said decision
was published in the Official Journal of the
European Union no. 202/4.08.2009.
For the full content of the said decision, please
click here
Financial Services Industry Monthly Bulletin 9
Notification of setting up branches
Contents of notification for the set up of a
branch in another member state:
name, head office address and branch
address of the credit institution and the
address in the host member state from
which documents may be obtained (if
different from the branch address);
details of the accredited compensation
scheme of which the institution is a
member;
activities to be provided in the host
member state (as listed in Annex I of the
Banking Directive);
investment services and/or activities as well
as ancillary services to be provided in the
host member state (as listed in Annex 1 of
the MiFI Directive, if applicable);
identification of management of the
branch;
'programme of operations' including at
least the following information: business
plan, organizational structure, systems and
controls, financial information and
investment activities (if applicable) (as set
out in detail in the Schedule attached to
Annex 2 of the Guidelines).
Timing: the notification must be transmitted by
the competent authority of the home member
state to the competent authority of the host
member state within three months of its receipt.
The competent authority of the host member
state should acknowledge receipt of the
notification in a timely manner, but no later
within than two months from its receipt.
Guidelines for notifications of free provision of
services and setting up branches by credit
institutions within another member state of the
EU/EEA adopted by the Committee of European
Banking Supervisors
The Committee of European Banking Supervisors
(“CEBS”) adopted on August 27th, 2009 the
Guidelines for passport notifications (“the
Guidelines”) aimed to provide a framework for
the co-operation between competent authorities
with regard to the notification of free provision
of services and setting up branches by credit
institutions within another member state of the
EU/EEA.
Applicability - the Guidelines apply to banking
supervisory authorities in the EU and EEA states
(i.e. authorities qualifying as “competent
authorities” for the purposes of Directive
2006/48/EC (the Banking Directive) and Directive
2004/39/EC (the MiFI Directive) (together, “the
Directives”).
Concept - the Guidelines provide for:
cooperation between competent
authorities;
harmonized passport notifications based
on common templates;
mutual assistance between competent
authorities;
confidentiality in the exchange of
information between competent
authorities.
Contents - the Guidelines include the contents
of the notifications for both setting up branches
and free provision of services into another
member state and the circulation of such
notifications between the competent authorities.
Template notifications are included in the
appendixes to the Guidelines.
10
Timing: the competent authority of the home
member state shall communicate the above
information to the competent authority in the
host member state as soon as is practicable, but
no later than one month from its receipt from
the credit institution. The competent authority of
the host member state should acknowledge
receipt of the notification in a timely manner.
Notification of changes to existing notifications:
although not specifically required under the
Directives, any changes to an existing services
notification should also be communicated as
above between home and host competent
authorities.
For the full contents of the Guidelines, please
click here
Notification of changes to existing notifications:
the credit institutions shall give written notice of
any change in respect of the establishment of a
branch to the competent authority of the home
and host member state at least one month
before implementing the change. The
competent authority in the home member state,
once its accepts the change, shall notify the
change to the competent authority in the host
member state no later than within one month as
of receipt of the notification from the credit
institution.
Notification of free provision of services
Contents of notification for the free provision of
services:
name and head office address of the
credit institution;
activities to be provided into the host
member state (as listed in Annex 1 of the
Banking Directive);
investment services and/or activities as
well as ancillary services to be provided
into the host member state (as listed in
Annex 1 of MiFI Directive).
Financial Services Industry Monthly Bulletin 9
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