concerning the regulation of establishing and operation of the open funds for investments and the investment companies as financial intermediary institutions no 24 of 1993
Based on the Art.107 para.(1) and (3) of the Constitution of Romania and the Art.1, letter d) of the Law 58/1993 regarding the empowerment of the Government of Romania to issue Ordinances, to contract and guarantee loans and to contract state borrowings,
The Government of Romania issues the following Ordinance:
Art.1. - This Ordinance regulates the set-up, structure and operation of the investment open funds, investment companies, investment management companies and fund depositing companies as well as monitoring their activities for attracting the dispersed savings and their allocation to a portfolio of investments on the basis of prudent risk diversification.
Art. 2. - There are exempted from the provisions of this Ordinance the underwriters and the underwriting groups which:
1.did not float stock, which might have been considered as a contribution to their asset;
2.even though they have floated stock, they have either less than 50 investors or a total asset value less than the minimal value established by the Real Estate Agency.
Art. 3. - The use of the specific terms concerning the activities which are mentioned in the request of authorisation is restricted only to those persons or legal entities who have requested the authorisation to perform the activities specified in the mentioned authorisations.
Any unauthorised use of specific terms, including among others: investment funds, mutual funds, open-end investment funds, investment trusts, investment company, investment management company,fund-deposit company or custody company as well as any equivalent or similar terms which describe activities subject of regulation under the provisions of this law, is forbidden
and may be penalised according to the provisions of this Ordinance and the regulations of the Securities and Exchange Comission.
Art. 4. - The Securities and Exchange Comission is empowered to monitor the compliance with the law and to issue the necessary regulations accordingly.
The Mutual Funds
Art. 5. - Persons and legal entities, may set up, provided the Securities and Exchange Comission authorisation, through a contract of civil company, an open-end investment fund, without juridical status, by floating stock, buying and investing stock in a diversified investment portfolio of transferable securities.
The number of securities and, as a result, the total volume of the funds of the Open-End Investment Funds are variable, depending of the number of securities issued and traded back.
Art. 6. - If, within 60 days from the authorisation date by the Securities and Exchange Comission, an Open Investment Fund does not manage to secure at least 50 security holders, or the total value of the securities does not reach the minimum level referred to in Art.2., b) of this Ordinance, then, the authorisation is cancelled and the investors are reimbursed, within 15 days, with their whole contribution, without charging any costs or commissions.
If, within one year from the authorisation date by the Securities and Exchange Comission, an Open Investment Fund does not manage to secure at least 500 security holders, the Securities and Exchange Comission is entitled to ask for a redesign of the investment policy and funds placement strategy, to merge with another Fund or Investment Fund, or to liquidate the whole operation, as the case may be.
Art. 7. - The founder members of an Open Investment Fund will conclude an Administration Contract with a qualified and authorised Investment Management Company.
The draft Administration Contract will be prepared by the Securities and Echange Comission.
The stockholders of this fund, issued later, will automatically adhere, agree and comply with the provisions of the Contract and internal regulations, will initial the stock certificates of the stock purchased by them.
Art. 8. - The internal regulations qualify the investment projects portfolio of the Open Investment Fund and set up the rules for achieving the objectives according to the provisions of this Ordinance and the regulations of the Securities and Exchange Comission.
Art. 9. - The prerequisites for the Securities and Exchange Comission approval of the operations are the following:
1.legal set-up of the company and employment of the Management Company;
2.internal regulations of the Investment Fund;
4.selection, by the Investment Management Company, of a "deposit company".
Art. 10. - Ownership of a security of the Open Investment Fund, is equivalent to the ownership of part of the net assets of the Fund. This security will be nominally issued, not endosable or transferrable and not stock-exchange listed. The securities will be issued in only one lot and will grant the owners the same benefits and liabilities.
Participation at an Open Investment Fund may be proven and certified by a Certificate, regulated by the Securities and Exchange Comision.
The prices, when the securities are issued, will be established such as to reflect the net value of the assets at the closing date when the "deposit company" receives the documents and the invoice. The price will be payed fully in cash, at the moment of application.
Art. 11. - The Open Investment Funds shall not issue any other kind of securities excepting those of participating stock.
Provided the approval of the Securities and Exchange Comission, the internal regulations of the Open-End Investment Funds may allow provisions for the Administration Company for temporary borrowing, on the name and on the account of an investment fund under its control and management, subject to:
1.the total debt volume of an Open-End Investment Fund shall not exceed, at any moment, the ceiling of 10% of its net assets;
2.the funds should be borrowed exclusively for: payback of participating stock deemed for buyback; payments to cover the flotation costs of stock issued, subscribed for as preemptive rights mentioned in the association contract.
3.the borrowed funds must be totally repayed within 30 days from the date of contracting the debt;
4.no other fees or commissions should be charged by the Administration Company in relation with or as a result of such borrowing.
The provisions of the para 1 and 2 will not prevent commitments to make future payments for stock purchasing with partial payments.
Art. 12. - The participation rights issued by an Open-End Investment Fund may be bought back at request and at a price reflecting the value of the rights calculated on the basis of the net assets available at the end of the last day, prior to receiving the buy-back request by the deposit company and the participating certificate attached.
The buy-back price will be payed within 10 working days after receiving the request. It might be charged buy-back fees, according to the regulations of the Investment Fund.
Art. 13. - The right to buy-back participating rights of an Open- End Investment Fund, may be cancelled by the Securities and Exchange Comission, if:
1.it is found that the value of some participating rights, computed on the basis of net assets, is not accurate or it may be determined only by jeopardising the interests of the other participation rights owners;
2.the stock exchange operations are suspended and the stock cannot be traded;
3.other events justify the suspension of the buy-back rights for protecting the rights and the interests of the other owners of participation rights.
The suspension time of buy-back rights cannot exceed the time limit of 10 working days. During the suspension period, there will be no issue of additional participation rights for the respective Open-End Investment Fund.
Investment Trust Companies
Art. 14. - An Investment Trust Company will be set-up as a joint stock company, with a minimum of 50 shareholders, according to theprovisions of this Ordinance and the general provisions of the Law no.31/1990.
These companies have at the core of their activity, mobilisation of the financial resources available, from the legal entities and individuals and the placement of this capital in stock, in accordance with the provisions of this Ordinance and the regulations of the Securities and Exchange Comision.
Art. 15. - The contract and the by-law of an Investment Trust Company will be drafted in accordance with the regulations issued by the Securities and Exchange Comission regarding the features and the minimal content of these documents.
The internal regulations of an Investment Truat Company and if it may be the case, its Administration Contract will be drafted in accordance with the provisions of this present Ordinance and the regulations of the Securities and Exchange Comission.
The Investment Trust Companies may conclude administration contracts with a qualified investment administration company provided the approval of the Securities and Exchange Comission.The Securities and Exchange Comission will authorise the operation of an Investment Trust Company, without concluding an administration contract, only if such a company can
demonstrate its capacity, organisational structure and adequate management capability.
The Investment Trust Companies must indicate in their association contracts and by-laws one of the two operating options available in para.3 and 4 in this article.
Art. 16. - The Investment Trust Companies will show at any moment the total stock subscribed and deposited in an amount equivalent, at least with the minimum level required by the Securities and Exchange Comission.
The stock of the Investment Trust Companies is based on only one type of shares, issued exclusively nominally and covered integrally on cash basis at the moment of the application. Each share grants to the owner the same equal rights and liabilities.
The shares might be issued on account, according to the regulations provided by the Securities and Exchange Comission. They may be freely negociable and transferable, excepting the cases mentioned in art. 24 of this Ordinance. The Investment Trust Companies must request the listing of their shares at the stock exchange, within 90 days from the date of the issue.
Art. 17. - Establishment of the investment companies and their operations are subject to the approval of the Securities and Exchange Comission.
The approval requires the examination of:
1.the association contract, the by-law and the internal regulations;
2.the selection of a deposit company;
3.the selection of the board of administration, the management and their personal qualifications and professional background;
4.the administration contract, if it is the case.
Art. 18. - If, within 60 days from the date of approval from the Securities and Exchange Comission, an investment trust company would not manage to attract at least 50 shareholders or the subscribed amount of capital would not reach the minimum level required by the Art.2, letter b) of this present Ordinance, the approval for operations would have to be cancelled and the total capital
subscribed would have to be payed back within 15 days, without charging any comission or fee, the company coming into liquidation in accordance with the Art.169, para.1, b) of the Law no.31/1990 concerning the commercial companies.
Art. 19. - An investment trust company will not issue other stock excepting one single type of nominative common shares. Explicitly, the closed investment companies will not issue any other negociable securities. Even though, provided the approval of the Securities and Exchange Comission, the association contract and the by-law of an Investment Trust Company may have provisions which allow the company to borrow, temporarily, on the condition that:
1.the total debt will not reach at any moment, 10% of the total capital subscribed and deposited;
2.the borrowed funds should be used only for payment the flotation cost of stock subscribed, in accordance with the issuer instructions concerning the preemptive rights;
3.the borrowed funds should be reimbursed within 30 days from the date of borrowing;
4.in the case an Investment Trust Company has an administration contract with an administration company, no commissions or fees are allowed to be charged by the administration company in relation with such a borrowing.
The above mentioned provisions will not prevent a future commitment to make future payments for purchasing stock partially payed.
Art. 20. - Prior to any public offer of stock or any kind of security by the open-end investment fund or its investment trust company, a qualified investment management company will be responsible for drafting a prospectus. In the case of an investment trust company which does not operate on the basis of an administration contract, the prospectus will be drafted and responsible for, by its Board of Administration.
The prospectus will include all the necessary information for a possible investor to asess the investment proposed and enable him to take sound decisions in this regard.
The prospectus will have at least the format and the features required by the Securities and Exchange Comission. The Securities and Exchange Comission may request to include in the prospectus additional information, depending on the investment and its nature.
In the case of an open end investment fund, the prospectus will include the contract content and the internal regulations of the fund. In the case of an investment trust company, it will include the association contract, the by-law, the internal regulations and, if it may be the case, the administration contract.
The presentation document will be submitted for aproval to the Securities and Exchange Comission, prior to any public offering of stock. The aproval issued by the Securities and Exchange Comission means only that the issuer has complied with its obligations to provide the required information.
This does not imply, in any way, an aproval or asessment of the investment from the part of the Securities and Exchange Comission, nor the quality of the stock to be issued.
Once aproved, the presentation document will be published according to the regulations issued by the Securities and Exchange Comission and it will be distributed to all the individuals and the legal entities interested in the stock offered. Each stock subscriber will be requested to sign a statement certifying the receiving and the reading of the presentation document.
Art. 21. - Within 60 days from the reporting closing date, the investment companies which operate without concluding an administration contract as well as the investment management companies- for each investment fund or each investment management company under their management- will compile, submit, publish and distribute among all the shareholders and security owners, as the case may be, the following reports:
1.an annual report, including audited financial reports, the audit report, the investments status and appraisal as well as any changes in stock or securities, during the reported period;
2.a semiannual report and similar reports as those described in a) above;
3.quarterly reports and financial reports as those mentioned in para. a) above, unaudited, including reports on the investment portfolio as well as any changes in the stock or securities status.
Art.22. - Non compliance with the provisions of the Art.20 and 21 of this Ordinance and providing inaccurate or incomplete information constitutes an infringement and penalties will be charged, in accordance with the provisions of this Ordinance, to the investment company which does not operate on the basis of an administration contract or an investment administration company, irrespective of the losses it may cause, because of this, to a third party.
Art. 23. - The net assets of an open investment fund or of an investment company not listed at the stock exchange, will be computed daily by the deposit company. For the companies stock exchange listed, the net assets will be computed at least weekly, in a specific day mentioned in their internal regulations.
For computing the net assets value, the stock and the securities will be leveled at the market value. The market value is defined as the minimum value of the weighted average tradings at the stock exchange, for a trading period and the closing price of such trading period, for transactions which are above a certain minimum level of trading price. The minimum level of the trading price
is regulated by the Securities and Exchange Comission.
The Securities and Exchange Comission regulations contain provisions regarding the criteria and procedures to calculate the net assets value which, in case of the open investment funds, will specify the computing methodology both for issuing securities and buying them back, adjusted accordingly with comissions, if provided.
Art. 24. - No individual or legal person, including those involved the way they are defined in Art.2, f) of the Government Ordinance no.18/1993 concerning the regulation of the non- stock exchange trading, will have the right to own securities or shares in an open investment fund or an investment company if, as a result of such ownership, the individual or the legal person will control
more than 5% of the total stock traded or owned or the voting right in such an investment company.
The above mentioned limitation will not apply to ownerships over 5% resulted from heritage, mergers or any other similar situations defined by the Securities and Exchange Comission, on the condition that, within one year, that particular owner, should reduce his ownership to the level of the above mentioned ceiling of 5%.
If the total number of securities of an open investment fund, owned by a sole owner, as defined above, overstep the limit of 5% of the total number of securities owned or traded, as a result of buying back activities of other investors, then, such a particular owner does not have to reduce its ownership to the level of the mentioned ceiling but he is not allowed to acquire new
additional stock or securities of that fund as long as his ownership is above the mentioned 5% ceiling.
Art. 25. - The open-end investment funds and the investment trust companies will comply at any moment with prudent levels of investment diversification portfolio, to avoid bulding-up the risk in their investment activities.
The documents necessary to set-up the open-end investment funds and the investment trust companies, will specifically contain clauses certifying that they cannot acquire, own, neither individually nor collectively, securities which could enable them to control or to influence materially the management of any company owner of securities which are part of their portfolio.
Art. 26. - The open-end investment funds and the investment trust companies may acquire or may own investments only in:
1.securities, registered at the Securities and Exchange Comission, based on the fact that they have been publicly offered, proving that such securities have been listed at the stock exchange or are traded regularly on other markets monitored by the Securities and Exchange Comission;
2.securities acquired on the main stock market or the market for new issues, within 90 days from the date of their issue, as long as the date of their application for stock exchange listing was prior to their acquiring and the listing should be made within 180 days from the date of their issue;
3.securities, not listed at the stock exchange, which are not traded on other monitored markets in the way defined at para. a) of this article but limited by the provisions of art.27 d) and e);
4.other securities which could be validated by the Securities and Exchange Comission;
5.cash and other assets representing securities which could be qualified by the Securities and Exchange Comission for investments as investments from the Investment Trust Funds and investment companies, on the condition that they become due within maximum 60 days.
The Investment Trust Funds and the investment companies will not retain hard currency for investment purposes.They will not invest in gold or any other valuable metals, nor in certificates or any other such instruments which, directly or indirectly, will provide a recourse on them.
Art. 27. - The investments in stock of an investment trust fund or an investment company will be diversified in such a manner that they will stay below the following limits:
1.- 10% of the total volume of the securities issued by a single issuer and traded on the market;
2. - the minimum of, 5% of the stock with voting rights issued by a single issuer and traded on the market, and the total sum of voting rights granted to the owners of such stock;
3. - 5% of the total net assets in stock, issued by a single issuer, listed at the stock exchange and traded or, if it is the case, guaranteed by such an issuer; this limit may be increased to 10% of the net assets as long as the total investments in stock, which individually is greater than 5% of the net assets, will stay below 25% of the total net assets of the investment fund or of the investment company;
4. - 2% of the net assets in securities issued by a sole issuer, traded on the market, or, if it the case, guaranteed by a sole issuer whose securities are not listed at the stock exchange in the way mentioned in art.26, c);
5.- 10% of its net assets in stock isuued by any number of issuers, traded on the market, or, if it is the case, guaranteed by any number of issuers whose stock is not listed at the stock exchange in the way defined in Art.26, c).
For meeting the requirements of portfolio diversification, the issuers whose stock is listed at the stock exchange, include all the issuers which are refered to in Art.26, a) and b).
Investments in securities issued by branches or any other companies effectively controlled, directly or indirectly, by an issuer, are considered investments in securities of such an issuer.
The portfolio diversification requirements mentioned above, will not apply to investments in stock issued by the State or its territorial and administrative organisations.
The Securities and Exchange Comission may issue regulations for portfolio diversification concerning the stock mentioned in the previous para.
Art. 28. - If an investment administration company manages, on a contractual basis, investment administration for more than one investment fund or investment company - in accordance with the provisions of art.37 of this Ordinance - portfolio diversification requirements set in art. 27 will prevail, also for the total portfolios of all the administered investment funds and administered
investment companies, with the difference that:
1. - the 10% ceiling set in art 27, a) is increased to 15%, aplicable to the total portfolio of all investment funds and investment companies of such type;
2.- the 5% ceiling set in art.27, b) is increased to 10% aplicable to the total portfolio of all investment funds and investment companies under joint administration.
Art. 29. - For a maximum period of 180 days from the start of investment operations, the Securities and Exchange Comission may exempt the open investment funds and the investment companies from certain requirements of portfolio diversification set in art.27 of this Ordinance, based on regulations issued for such purposes.
The open investment funds and the investment companies may temporarily exceed the limits set in art.27, a)-c) of this Ordinance by maximum 5%, on the condition that this margin will result exclusively and directly from exercising the preemptive rights for stock increase of the respective companies and on the condition that the original ceiling should be reestablished within 180 days from the first ceiling overrun.
Art. 30. - Both the open investment funds and the investment companies will not acquire or own securities or stock which:
a) have been issued by their administration companies, as the case might be;
b) have been issued by any other investment fund or investment company;
c) have been issued and guaranteed by the respective deposit company, other than a bank, stock exchange listed;
The Securities and Exchange Comission may set-up exceptions from the provisions of the preceding para b) if such investments will be the only legal way to access certain markets or segments of them and always on the condition that neither such investment will lead to or will involve, directly or indirectly, reciprocal ownership, for any issuer, as well as on the condition that
the ownership of stock according to preceding b) should not involve, in any way, administration fees or anything like that.
The open investment funds and the investment companies are not allowed to purchase stock on credit basis or to sell stock which they do not own.
The use of any other instruments or techniques will be strictly limited to those which increse the efficiency of portfolio administration and will be subject, anyway, of the regulations set by the Securities and Exchange Comission.
Investment Administration Companies
Art. 31. - Investment administration companies will be set-up as joint stock companies, according to the Romanian Law and prior approval of the Securities and Exchange Comission is also required.
Once the companies have been set up as companies with an organised operating structure, they will have to request an operating authorisation from the Securities and Exchange Comission and they may start afterwards the operation within 180 days.
The conditions to obtain the authorisation, mentioned at para. 1 and 2 of this present article, will be determined by the regulations of the Securities and Exchange Comission.
Art. 32. - The investment management companies will have to obtain an authorisation from the Securities and Exchange Comission for:
1.association contracts, by-laws and eventual amendments to them;
2.internal regulations and eventual amendments to them;
3.association contracts and the by-laws of the investment companies managed by them and the amendments to them, eventually;
4.administration contract and the internal regulations of the open investment funds managed by them and the amendments, eventually;
5.the presentation documents for the public offering of stock issued by the open investment funds and the investment companies, operating on the basis of an administration contract;
6.changes in the property structure of the administration company, which involves more than 5% of the total capital subscribed;
7.changes in the management and in the structure of the investment
9.merger of investment funds or investment companies, operating on
10.the basis of a management contract;
11.other documents, events or situations which the Securities and Exchange Comission may approach through their regulations.
The Securities and Exchange Comission may request an investment management company to take up amendments to the documents referred to the above a)-e) of this article, as many times as the Securities and Exchange Comission may consider necessary.
Art. 33. - The investment management companies will issue only one type of stock, nominally, which must be covered totally in cash at the moment of application.
The minimum volume of subscribed capital and totally deposited of the investment administration companies will be set by through the regulations issued by the Securities and Exchange Comission. These regulations may include provisions that the minimum capital requirement may vary either according to the number of open investment funds or investment companies
managed, or according to the total net assets administered.
Art. 34. - The investment management companies will perform their activities exclusively for the management of the open investment funds and for the investment companies.Any other activity, not related to the above, is not allowed, except auxilliary and adjacent activities, established by the Securities and Exchange Comission. Administration activities of investment funds, on contract
basis, are reserved only for qualified authorised administration companies, according to the provisions of this ordinance.
In case of any doubt concerning the nature of the activity, the Securities and Exchange Comission is empowered to decide if a certain activity is qualified as an administration of an open investment fund or an investment company and consequently, it will be treated according to the provisions of this Ordinance.
Art. 35. - The banks may own stock of the investment management companies up to the level of 20% of total stock, on the condition that:
1. - the total ownership of stock of an investment management company, which manages investments of the companies mentioned in Law no.33/1991, should be less than 40% of the stock of an investment management company;
2. - none of the financial companies, regulated by the Law no.33/1991 should own stock, directly or indirectly, of more than one investment management companies.
In no one of the investment management companies, the members of its Board of Administration, the Executives or the owners of more than 5% of the total stock, including the individuals involved, should not own the stock of other investment management companies.
The financial companies, which serve as deposit companies for the investment funds or investment companies managed by an investment management company, as well as the members of their Board of Administration, executives and the owners of more than 5% of their stock, including the persons involved, are not allowed to own stock or to accept management positions in the
respective investment management companies.
The intermendiary companies, operating based on the authorisation from the Securities and Exchange Comission, the members of their Board of Administration, executives and their personnel which perform the transactions, are not allowed to own, on overall, more than 5% of the total stock of the investment management companies. The members of the Board of Administration, executives and the owners of more than 5% of the total stock of an underwriting group, including the persons
involved, are not allowed to take up management positions in a investment management company.
Art. 36. - An investment management company is not allowed to perform the functions, according to this Ordinance, of a deposit company. In exercising its management functions, the investment management company will operate independently from the shareholders interest and exclusively for the benefit of the investors in the open investment funds and the investment companies under its management.
Art. 37. - A management investment company may manage more than one open investment fund or an investment company, according to their individual contracts, on the condition that:
a) the investment projects should be clearly differentiated and identifiable by the individual entities, to avoid uncertainties and confusion for the potential investors;
b) the individual administration contracts, internal regulations and, where it is aplicable, the contracts and the by-laws of the investment funds or the investment companies under its administration, should be approved by the Securities and Exchange Comission;
c) the management company should meet the minimum capital requirement for managing more investment funds, it this is required by the regulations of the Securities and Exchange Comission, in accordance with the authorisation granted through the provisions of the art.31 of this Ordinance;
d) the assets,operations and the records concerning each investment fund or investment company under management, should be clearly identified, separately from those of the management company;
e) the management company should refrain itself from any other transaction with and for investment funds and investment companies under its management.
Art. 38. - An investment management company may not acquire or own any securities or stock issued by:
1. - investment funds or investment companies under its management;
2. - individuals having positions in deposit companies for investment funds or investment companies under its administration;
3. - other investment management companies;
4. - stock and exchange companies;
5. - legal persons which are stockholders of that particular investment management company;
Art. 39. - An investment management company will cease to operate, on the condition that:
1. - it will notify, within maximum 90 days before the efectiveness, about the decision to terminate the management contract;
2. - acceptance by the Securities and Exchange Comission of a requst from the shareholders which own at least 30% of the stock of an open investment fund or of an investment management fund, for the replacement of the management company;
3. - withdrawal, by the Securities and Exchange Comission of the authorisation granted to to an investment management company, because of the failure to comply with the regulations and the specific laws addressing the activities of an investment management company.
Within 90 days from the appearance of cases described in a)-c) of the precedent para., the majority of the shareholders of an open investment fund or of an investment company, which operates on the basis of a management contract, will decide on another investment management company, on a merger with another open investment fund or other investment company, or the
liquidation of the respective open investment fund or the investment company.
Within the time limit of the precedent paragraph, the Securities and Exchange Comission may cancel the issue or the buy-back of the securities of the respective investment fund.
Depository Trust Companies
Art. 40. - The investment management companies will send for depositing, with the approval of the Securities and Exchange Comission and on a contract basis, the assets of the open-end funds and the investment trusts which they are administering, to deposit companies or other authorised entities to provide such services.
Art. 41. - The depositary trust companies for the open-end investment funds and the investment trusts will be set up as joint stock companies, with the aproval of the Securities and Exchange Comission.
For obtaining the authorisation required in the previous paragraph, the depository trust companies should submit to the Securities and Exchange Comission documents and satisfactory evidence to demostrate their availability of financial resources and an adequate management structure, as well as professional skills for this specific activity.
The total capital subscribed and the minimum amount deposited will be established by the Securities and Exchange Comission.
Art. 42. - The depository trust companies will perform the following activities concerning the investment trusts and the investment trusts under the management of an authorised investment management company:
1. - safe keeping of the assets of the investment trusts and the investment funds;
2. - accounting of the security transactions and operation of the accounts of the above mentioned entities, in accordance with the instructions received from the investment management companies and confirmed by the Securities and Exchange Comission;
3. - dividend collection, interests and other benefits associated with stock depositing as well as exercising the rights of stock owners, in accordance with the instructions received from the investment management companies;
4. - calculation and publication of the net assets value of the entities mentioned above;
5. - receiving the funds for stock applications of the open-end funds and investment trusts as well as preparation and issue of the securities;
6. - processing the transfer documents for securities of the investment trusts, other than those which did not conclude a management contract;
7. - processing and payment of the due benefits which should be distributed to the stock owners of an open-end investment fund and to the stock owners of the investment trust ;
8. - processing the buy-back requests for open-end investment stock, their cancellation and the appropriate payments to the owners;
9. - other activities established by the Securities and Exchange Comission.
Art. 43. - The activities performed by the depository trust companies, mentioned in art.42., may be performed by other companies as well, provided the approval of the Securities and Exchange Comission.
Art. 44. - The functions of a depository trust company and functions of an investment management company cannot be performed by the same legal entity. A depository trust company will not acquire or own any security isued or guaranteed by an investment management company for which it provides depository services.
The members of the administration board and the executives, as well as the stockholders who own 5% or more of the stock, including the involved individuals, shall own neither stock, nor equivalent positions in an investment management company, for which the depository trust companies provide depository services.
The depository trust company will not perform activities, other than those related to their specific functions described in this Ordinance and the regulations of the Securities and Exchange Comission, excepting those specific activities granted to the financial institutions which operate according to the Law no.33/1991.
Art. 45. - An investment management company may let the depository functions, for each investment fund or investment trust company, to be performed by only one single depository entity. However, a depository trust company may perform such functions for any number of investment funds or investment trust companies, on the condition that assets, operations and the accounting for each these entities should be done separately and separated from those of the depository entity.
The depository trust company is responsible to the investment management company, stock owners of open-end investment funds, investment trust companies and their shareholders, for any losses in the value of stock or damages, as long as the losses and the damages are caused by or appeared because of omission or failure to perform adequately the functions of the depository entity.
The depository company, on its own risk, may transfer partially or integrally to a qualified third party its assets concerning the investment funds and investment trust companies to whom is contractually linked. However, the depository company will not be exonerated from the responsibility as a result of such transfers with the exception of the cases when it takes such actions on the basis of the instructions received from the respective investment management company.
Art. 46. - A depository company will cease to operate on the condition :
1. - prior notification, within minimum 90 days, of the decision to terminate the contract by anyone of the parties;
2. - expiring the validity of the contract, without making of use the option to renew it, if this clause was stipulated in the contract;
3. - withdrawal of the authorisation to perform essential functions during effective execution of the contract;
4. - the amendments of the association contracts and the by-laws negatively affects, in the opinion of the Securities and Exchange Comission, the interests of the investors.
Changing the depository trust companies by the investment management companies is subject to the Securities and Exchange Comission approval.
Contraventions and Sanctions
Art. 47. - The Securities and Exchange Comission, through its empowered individuals, may apply the following contraventional sanctions:
1. - written warning;
2. - published warning;
3. - fine;
4. - temporary forbidding or interdiction to individuals or legal entities to perform activities regulated by this Ordinance;
5. - suspending the authorisation;
6. - withdrawal or cancellation of the authorisation.
Art. 48. - There are considered contraventions the following actions if, according to the penal law and the circumstances, there are not infringements:
1. - any activity performed, for which this Ordinance require the authorisation or the approval of the Securities and Exchange Comission;
2. - unauthorised use of the names and terms mentioned in art.3;
3. - noncompliance with the provisions of art.10, para 3, concerning the pricing mechanism of security issue;
4. - underwriting, by the underwriting groups of other securities than those mentioned in art.11, para.1 and art.19, para.1;
5. - contracting loans in other conditions than those mentioned in art.11, para.2 and art.19, para 2;
6. - noncompliance with the provisions of the art.20 and 21 concer- ning the drafting, publishing and distribution of the prospectus;
7. - noncompliance with the provisions of the art. 23 concerning the calculation of net assets;
8. - noncompliance with the ownership ceiling of stock and the provisions mentioned in art.24;
9. - noncompliance with the provisions of the art. 25-29 concerning the prudent management of portfolios;
10. - ownership of stock, forbidden by the provisions of art.30 and 38;
11. - noncompliance with the provisions of the art.42 concerning the activities of the depository trust companies and unsatisfactory performance of these activities.
Art. 49. - Sanctioning the legal persons, according to this Ordinance, does not prevent the Securities and Exchange Comission to apply identic sanctions or others specific for the same reason or actions of the individuals, who, acting as members of the Boards of Administration, legal representatives, individuals acting "de jure" or "de facto" in management positions, experts in activities regulated by this Ordinance, are responsible for their actions or, having the duty and the possibility to prevent its occurrence, they have failed to prevent it.
Art. 50. - The fine sanction applicable to legal entities will be in the range of 1 - 3% of the total capital subscribed.
For the individuals, the sanction will be in the range of 300,000 - 1,000,000 lei.
In the case of fine sanctions, the provisions of art.25 and 26 of the Law no.32/1968 do not apply.
Art. 51. - The authorisation suspending sanction could be applied for a period of 5 to 90 days.
Final Provisions and Transitory Provisions
Art. 52. - Within 60 days from the date of coming into force of this Ordinance, the Securities and Exchange Comission will draft and will submit for approval to the Government, all the maximum and minimum levels of the amounts expressed in national currency, correlated with the stock exchange and capital market development.
Art. 53. - The Securities and Exchange Comission is empowered to update and to submit for approval to the Government, all the maximum and the minimum levels of the sums, expressed in the national currency, in accordance with the stock market development and the macroeconomic conditions.
The Government decisions, taken on the basis of the previous paragraph, will come into force within maximum 180 days from the date of its publishing in the "Monitorul Oficial" of Romania, such as to allow the proceeding of the activities covered by this Ordinance, on the basis of previous issued authorisations.
No. 24/25 August 1993
Published in Official Gazette no. 210, 30 August 1993
|Copyright 1998-2015 DSC.NET All rights reserved.|