LEGAL UPDATE
Draft New Law on Markets in Financial Instruments
Directive 2014/65/EU on markets in financial instruments (“MiFID II“) and Regulation (EU) No. 600/2014 on markets in financial instruments (“MiFIR“) entered into force on 2 July 2014 and will apply as of 3 January 2018. This new legal framework is meant to update the existing MiFID rules applicable to investment services across the European Economic Area (EEA).
Pursuant to the entry into force of MiFID II and MIFIR, the Romanian Financial Supervisory Authority (“FSA“) has published the Draft New Law on Markets in Financial Instruments which is estimated to apply, with certain exceptions, as of 3 January 2018 and is designed to transpose MiFID II provisions into Romanian legislation as well as to align the provisions regulating the activity of the central securities depository, clearing houses and CCPs, to the existing European legal framework. The Draft New Law on Markets in Financial Instruments will repeal most of the provisions of the current Capital Market Law no. 297/28 June 2004.
ISDA Netting & Collateral Opinions
Leroy si Asociatii is advising the International Swaps and Derivatives Association (“ISDA”) in connection with the Romanian derivatives market and the associated financial collateral and has issued in 2016 the first Romanian netting opinion for the benefit of all ISDA members. Furthermore, ISDA has recently commissioned to Leroy si Asociatii Romanian Collateral Provider and Collateral Taker Insolvency opinions.
WHAT TO EXPECT FROM THE MARKET OVER THE NEXT 12 MONTHS
A liquidity boost for the Romanian capital market is anticipated and much awaited over the next months, driven in particular by the expected privatization of several state-owned companies (e.g. Hidroelectrica). This will contribute to the promotion of the Romanian capital market from frontier to emerging market status.
