Jul - Aug 2009 Financial Services Industry monthly bulletin

Domestic 4
Legislative changes 4
Regulatory updates 5
International 8

Legislative changes o request the persons owning
qualified participations to
Amendments to the Banking Law financially support the credit
institution by increasing the share
I. Qualified participations capital or by granting eligible
loans to be included in the
 Interdiction to purchase new shares calculation of the own funds,
issued by the credit institution according to the specific
(Romanian legal person) for the regulations issued by NBR and/or
holders of qualified participations in a by swapping such loans into
credit institution who had their voting shares;
rights suspended and which no longer
meet the requirements of the law o forbid the total or partial
regarding the quality of the distribution of profits through
shareholding of a credit institution or other destinations than those
exercise on it an influence that may provided by law as being
jeopardize the prudent administration mandatory, until NBR attests the
of the credit institution; remediation of the credits
institution’s financial standing
 The shareholders meetings of the
credit institution may be held by the III. Employment agreements concluded with
shareholders whose voting rights are directors/members of the directorate
not suspended; the majority
requirements for validly taking  The employment agreements of the
shareholders resolutions shall apply to persons designated to exercise the
the total share capital held by those mandate of director/member of the
shareholders; directorate must be terminated within
6 months after the entry into force of
 Obligation to sell the shares acquired this law. Otherwise, the employment
without taking into account the agreements shall be terminated by law
objection raised by National Bank of at the end of the 6-month period.
Romania (“NBR”) within 3 months as
of communication of the objection. Law no. 270 of 7 July 2009 (for the approval of
the Government Emergency Ordinance no.
II. Remedy in case of prudential indicators’ 25/2009 for amending and completing the
deterioration Banking Law - Government Emergency
Ordinance no. 99/2006 on credit institutions and
 In order to remedy the deterioration of capital adequacy) was published in Official
the prudential and performance Gazette Part I, no. 483 of 13 July 2009.
indicators of a credit institution
(Romanian legal person) or in order to For a consolidated version of the Government
prevent the occurrence of a Emergency Ordinance no. 99/2006 on credit
predictable significant deterioration of institutions and capital adequacy, please click
nature to jeopardize the ability of the here
credit institution to meet the
prudential requirements, NBR may:

Financial Services Industry Monthly Bulletin 3

Regulatory updates Classification of loans and investments and the
establishment, adjustment and use of specific
Banking credit risk provisions

Issuer: National Bank of Romania (“NBR”)  NBR Regulation no. 13/2009 amends
NBR Regulation no. 3/2009 regarding
Banks’ liquidity classification of credits and placements
as well as the set up, regulation and
NBR Norm no. 7/2009 amended NBR Norm no. use of specific credit risk provisions.
1/2001 on banks’ liquidity. Norm no. 7/2009 Regulation no. 13/2009 was published
was published in the Official Gazette no. in the Official Gazette no.
468/7.07.2009. 537/3.08.2009.

For the full contents of Norm no. 7/2009 please For the full contents of Regulation no.
click here 14/2009, please click here

Interest rates for mandatory reserves  NBR Regulation no. 14/2009 amends
the Methodological Norm no. 12/2002
 4.90 % per year for the minimum for the application of NBR Regulation
mandatory reserves established in lei; no. 5/2002 regarding the classification
of credits and placements and the set
 2.47 % per year for the minimum
up, regulation and use of specific
mandatory reserves established in
credit risk provisions. Regulation no.
Euro;
14/2009 was published in the Official
Gazette no. 537/3.08.2009.
 0.89 % per year for the minimum
mandatory reserves established in US For the full contents of Regulation no.
Dollars. 14/2009, please click here

The said rates apply for the application period The interest reference rate for August 2009 is
24.06.2009 ‟ 23.07.2009 and were approved by 9.00% per year
NBR’s Circular no. 25/2009 published in the
Official Gazette no. 489/14.07.2009. The above interest reference rate is provided as
per NBR Circular no. 27/2009, published in the
For the full contents of Circular no. 25/2009 Official Gazette no. 537/3.08.2009.
please click here
For the full contents of Circular no. 27/2009,
please click here

4

Issuer: NBR and the National Securities Such branches shall participate for the difference
Commission (“NSC”) between the guarantee thresholds and/or for the
deposits not guaranteed by the guarantee
Credit risk treatment for credit institutions and scheme in the home member state.
investment companies based on internal rating
models approach Procedure: Romanian branches of credit
institutions authorized in other EU member
Joint Order no. 6/43/2009 issued by NBR and states may request to become party to the
NSC approves the joint Regulation 12/5/2009, banking deposit guarantee scheme by filing a
amending NBR and NSC Regulation no. request with the Fund, accompanied by a
15/20/2006 on credit risk treatment for credit Romanian authorized translation of the
institutions and investment firms based on regulations for deposit guarantees in the home
internal rating models approach. Order no. member state, applicable to the scheme to
6/43/2009 was published in the Official Gazette which the respective credit institution
no. 602/31.08.2009. participates.

For the full contents of Order no. 6/43/2009, The Fund shall obtain an agreement in principle
please click here for the mutual cooperation from the deposit
guarantee scheme to which the credit institution
Issuer: Fund for Guaranteeing Banking Deposits participates in the home member state and shall
(“FGBD”) communicate to the branch the requirements to
be observed as a participant to the Fund, within
Transmission of status of the guaranteed 90 days as of the date of filing the request.
depositors to FGBD
Value of the contribution: For the computation
FGBD issued Regulation no. 3/2009 on the of the initial contribution, the Fund shall request
transmission to the FGBD of the status of the to the National Bank of Romania the
guaranteed depositors. FGBD issued Regulation classification of the branch in one of the
no. 3/2009 was published in the Official Gazette categories of credit institutions provided by
no. 599/31.08.2009. Government’s Emergency Ordinance no.
99/2006. The amount of the initial contribution
For the full contents of Regulation no. 3/2009,
shall be the equivalent of 0.5 % of the initial
please click here
capital required under Romanian law for the
category of credit institution the branch has
Participation of Romanian branches of EU credit
been categorized in.
institutions to the FGBD
Effects of the renouncing to/withdrawal of the
FGBD (or “Fund”) issued Regulation no.
quality of participant to the Fund: The deposits
4/31.08.2009 regarding the participation to the
attracted by such branches continue to be
Fund of the Romanian branches of credit
guaranteed by the Fund until the maturity date
institutions authorized in other member states
of the deposits. The initial contribution shall not
(the “Regulation”).
be reimbursed.
Applicability: the Regulation is applicable to
Entry into force: The Regulation entered into
Romanian branches of credit institutions
force after 5 days as of publication in the Official
authorized in other EU member states if the
Gazette. The Regulation has been published in
officially recognized guarantee scheme in the
the Official Gazette no. 599/31.08.2009.
home member state to which the credit
institution participates provides for a guarantee
For the full contents of Regulation no.
threshold lower than the one provided by the
4/31.08.2009 please click here
applicable Romanian legal provisions (Ordinance
no. 39/1996), respectively EUR 50,000 and/or a
narrower scope for deposit guarantees.

Insurance Calculation of the solvency margin of the
insurer/reinsurer, minimum solvency margin and
Issuer: Insurance Supervisory Commission value of the safety fund
(“ISC”)
 Change of the minimum value of the
Amendments regarding the amount and the safety fund
payment term of the functioning tax owed by
insurance companies and insurance brokers General insurances: The minimum value of the
safety fund shall be RON equivalent of EUR 2.3
Starting with July 2009, the amount of the million and RON equivalent of EUR 3.5 million if
functioning tax for insurance companies and the insurer subscribes one or more risks set forth
insurance brokers is 0.3 %, applied for the under each of the classes 10 to 15 mentioned
period for which the tax is owed to the gross under title B «General Insurances» of Appendix
insurance premiums cashed in for insurance 1 of Law no. 32/2000.
companies, respectively applied to the income
realized from the brokerage activity, for Life insurances: The minimum value of the safety
insurance brokers. The functioning tax is payable fund shall be RON equivalent of EUR 3.5 million;
monthly by the insurance companies and
quarterly by the insurance brokers. Reinsurance activity: The minimum value of the
safety fund shall be RON equivalent of EUR 3.2
The said amendments are brought by ISC’s million.
Order no. 11/2009 published in the Official
Gazette no. 512/27.07.2009.  Regulation of the obligation to proceed
with a share capital increase if the
For the full contents of Order no. 11/2009 please available solvency margin drops below
click here the value of the safety fund, namely

Norms regarding the Guarantee Fund General insurances/life insurances/ reinsurances:
If the available solvency margin drops below the
ISC issued Order no. 10/2009 approving the value of safety fund, the Board of Directors and /
norms concerning the guarantee fund. Order or the Managing Council are / is immediately
no. 10/2009 was published in the Official required, to convene the extraordinary general
Gazette no. 516/28.07.2009. meeting of shareholders in view of increasing
the company’s share capital. The duration of this
For the full contents of Order no. 10/2009,
operation (including contribution of the
please click here
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.

please click here

6

Procedure for supervision of the application of Capital markets
international sanctions in the insurance field
National Securities Commission (“NSC”)
ISC issued Order no. 13/2009 approving the
norms setting out the procedure for supervizing Regulation on the exercise of shareholders’
the application of international sanctions in the rights within shareholders meetings
field of insurances
The regulation is applicable as regards entities,
Order no. 13/2009 was published in the Official having their head-office located in Romania and
Gazette no. 555/10.08.2009. listed on a regulated market and transposes the
provisions of EU Directive no. 2007/36/CE
For the full contents of Order no. 13/2009 please regarding the exercising of certain rights of the
click here shareholders within the shareholders meetings.

The right of establishment and freedom to Main provisions of the Regulation pertain to:
provide services in Romania in the insurance field
„ Summoning procedure of the
ISC issued Order no. 14/2009 approving the shareholders meeting;
norms regarding the insurance/reinsurance „ Rights of minority shareholders
activity in Romania based on the right of (representing at least 5% of the share
establishment and freedom to provide services. capital) to request supplementing the
agenda
Order no. 14/2009 was published in the Official „ Reference date
Gazette no. 569/14.08.2009. „ Provisions related to the participation
of the shareholders within the
For the full content of Order no. 14/2009, please shareholders meeting and voting
click here through electronic means
„ Appointment of representatives
norms regarding the right of establishment and Order of the Romanian Securities Commission
freedom to provide services on the Romanian no. 44/2009 for the approval of Regulation no.
territory by insurance/reinsurance agents, 6/2009 regarding the exercise of the
authorized and/or registered by a competent shareholders’ rights within shareholders
authority from a member state of the European meetings was published in the Official Gazette
Union. Order no. 15/2009 was published in the no. 588/25.08.2009. For the full contents of
Official Gazette no. 569/14.08.2009. Regulation no. 6/2009 please click here.

please click here

Insurers authorization

norms for insurers’ authorization. Order no.
16/2009 was published in the Official Gazette
no. 569/14.08.2009.

please click here


Technical provisions on risk management New rules on credit rating agencies, bank capital
requirements, cross-border payments and e-
Directive no. 2009/83/EC of 27 July 2009 money as well as a programme to support the
(“Directive”) amends certain Annexes of effectiveness of EU policies
Directive 2006/48/EC of the European Parliament
and of the Council as regards technical The Council of the European Union announced
provisions concerning risk management. on 27th of July 2009 that it has adopted new
rules on credit rating agencies, bank capital
The Directive provides for the Member States’ requirements, cross-border payments and e-
obligation to adopt and publish, by 31 October money as well as a program to support the
2010 the latest, legislative measures and other effectiveness of EU policies.
administrative provisions necessary to comply
with the Directive. These national measures and Please click here for the full contents of the press
provisions must apply from 31 December 2010. release issued by the Council.

For the full contents of Directive no. 2009/83/EC, EU Council’s decision regarding the existence of
please click here 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

8

Guidelines for notifications of free provision of Notification of setting up branches
services and setting up branches by credit
institutions within another member state of the Contents of notification for the set up of a
EU/EEA adopted by the Committee of European branch in another member state:
Banking Supervisors
 name, head office address and branch
The Committee of European Banking Supervisors address of the credit institution and the
(“CEBS”) adopted on August 27th, 2009 the address in the host member state from
Guidelines for passport notifications (“the which documents may be obtained (if
Guidelines”) aimed to provide a framework for different from the branch address);
the co-operation between competent authorities  details of the accredited compensation
with regard to the notification of free provision scheme of which the institution is a
of services and setting up branches by credit member;
institutions within another member state of the  activities to be provided in the host
EU/EEA. member state (as listed in Annex I of the
Banking Directive);
Applicability - the Guidelines apply to banking  investment services and/or activities as well
supervisory authorities in the EU and EEA states as ancillary services to be provided in the
(i.e. authorities qualifying as “competent host member state (as listed in Annex 1 of
authorities” for the purposes of Directive the MiFI Directive, if applicable);
2006/48/EC (the Banking Directive) and Directive  identification of management of the
2004/39/EC (the MiFI Directive) (together, “the branch;
Directives”).
 'programme of operations' including at
least the following information: business
Concept - the Guidelines provide for:
plan, organizational structure, systems and
controls, financial information and
 cooperation between competent
investment activities (if applicable) (as set
authorities;
out in detail in the Schedule attached to
 harmonized passport notifications based Annex 2 of the Guidelines).
on common templates;
Timing: the notification must be transmitted by
 mutual assistance between competent the competent authority of the home member
authorities; state to the competent authority of the host
member state within three months of its receipt.
 confidentiality in the exchange of The competent authority of the host member
information between competent state should acknowledge receipt of the
authorities. notification in a timely manner, but no later
within than two months from its receipt.
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.


Notification of changes to existing notifications: Timing: the competent authority of the home
the credit institutions shall give written notice of member state shall communicate the above
any change in respect of the establishment of a information to the competent authority in the
branch to the competent authority of the home host member state as soon as is practicable, but
and host member state at least one month no later than one month from its receipt from
before implementing the change. The the credit institution. The competent authority of
competent authority in the home member state, the host member state should acknowledge
once its accepts the change, shall notify the receipt of the notification in a timely manner.
change to the competent authority in the host
member state no later than within one month as Notification of changes to existing notifications:
of receipt of the notification from the credit although not specifically required under the
institution. Directives, any changes to an existing services
notification should also be communicated as
Notification of free provision of services above between home and host competent
authorities.
Contents of notification for the free provision of
services: For the full contents of the Guidelines, please
click here
 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).

10

Reff & Associates is the correspondent law firm of Deloitte Romania, fully
integrated with the Deloitte multi-disciplinary advisory practice and affiliated to a
network of law firms and legal departments working with Deloitte all over the
world. Deloitte’s correspondent legal practice provides assistance to clients in
Romania on various matters pertaining to mergers and acquisitions, corporate
and commercial law, finance, banking and capital markets, real estate, project
finance, employment, competition, fiscal and commercial litigation, and
intellectual property.

In the financial services sector, Reff & Associates provides the full range of services
to banks and financial institutions, including:

- Finance deals: transaction support in bilateral and syndicated loans, loan
workouts, securitisation, loan transfers and assists in drafting and
negotiating the transaction documentation (loan agreements, security and
other ancillary documentation).

- M&A transactions in the financial services sector: advice on the structure
of the transaction, the pre-contractual documentation, due diligence,
drafting/negotiating the purchase agreements and assisting the
implementation of the transaction.

- Regulatory assistance: ongoing assistance with respect to the specific
legal and regulatory requirements applicable to banks / non banking
financial institutions operating in Romania, development of new
financial products, representation in front of the regulators (National
Bank of Romania, Insurance Supervisory Commission, Securities
Commission etc.).

Andrei Burz Pinzaru
Partner
+ 40 21 207 52 05
aburzpinzaru@deloittece.com

Simina Mut
Manager
+ 40 21 207 52 69
smut@deloittece.com

Leontin Trifa
Manager
+ 40 21 207 53 13
ltrifa@deloittece.com


George Mucibabici
Chairman
tel: + 40 21 207 52 55
e-mail: gmucibabici@deloittece.com

Audit
Santiago Pardo
Partner
tel: + 40 21 207 54 92
e-mail: sapardo@deloittece.com

Enterprise Risk Services
Gary Bauer
Director
tel: + 40 21 207 52 19
e-mail: gbauer@deloittece.com

Financial Advisory
Antonis Ioannides
Partner
tel: + 40 21 207 56 26
e-mail: anioannides@deloittece.com

Tax
Rodica Segarceanu
Partner
tel: + 40 21 207 52 31
e-mail: rsegarceanu@deloittece.com

Legal
Andrei Burz-Pinzaru
Partner, Reff&Associates
correspondent law firm of Deloitte Romania
tel: + 40 21 207 52 05
e-mail: aburzpinzaru@deloittece.com

Consulting
Razvan Horobeanu
Manager
tel: + 40 21 207 53 57
e-mail: rhorobeanu@deloittece.com

Actuarial & Insurance
Solutions
Slawomir Latusek
Consultant
tel: + 48 (22) 511 04 54
e-mail: slatusek@deloittece.com

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