This document provides a summary of recent regulatory updates and proposals in Romania across various financial services sectors: 1. The Romanian government regulated payment services by adopting an emergency ordinance and the National Bank of Romania issued regulations for payment institutions. 2. Various supervisory authorities like NBR, ISC, and PPSSC amended regulations regarding non-banking financial institutions, the insurance pool against natural disasters, and investment thresholds for pension funds. 3. The National Securities Commission updated rules on group registrations, income reporting, and transaction execution outside regulated markets. 4. The Romanian government issued an ordinance amending the fiscal code which included new tax filing deadlines for banks and rules for VAT taxation of financial services

1. October 2009

2. Domestic regulatory updates 3
Legal 4
1. Banking 4
2. Insurance 7
3. Private pensions 8
4. Capital Markets 9
Tax 10
International regulatory updates 11
Domestic regulatory proposals 13
1. Banking 14
2. Insurance 15
3. Private pensions 16
International regulatory proposals/measures 17

3. Financial Services Industry Monthly Bulletin 8

4.  its initial capital to be between EUR 20.000
and EUR 125.000, depending on the
Issuer: Romanian Government rendered payment services;
Romanian Government regulates the payment  its headquarter to be located in Romania;
services in view of implementing into national
legislation Directive 2007/64/EC of the European  in view of maintaining a healthy and
Parliament and of the Council as of 13
prudent management, NBR must ascertain
November 2007 regarding payment services in
the internal market that the persons responsible for leading and
managing its activity have a good
Romanian Government adopted Emergency reputation and an adequate knowledge
Ordinance no. 113/2009 regarding the payment related to the nature, extension and
services published in the Official Gazette no. complexity of its activity.
685/12.10.2009 (“GEO 113/2009”). The main
provisions of GEO 113/2009 refer to:
Payment services
Scope
The payment services can be performed under
GEO 113/2009 covers the following categories single payment transactions, framework
of payment services providers: contracts and related payment operations, if the
user acts as a consumer.
 credit institutions;
Through a payment service it is to be understood
 electronic currency issuers; any of the following activities:
 postal services providers that provide  services that allow to deposit/withdraw cash
payment services under the applicable into/from a payment account, as well as all
national legal framework;
of the operations necessary to operate that
payment account;
 payment institutions as per GEO 113/2009;
 European Central Bank and national central  performance of the following payment
banks when they are not acting as operations irrespective whether the funds
monetary authorities or in any other quality are covered or not by a credit line: direct
implying the exercise of public authority; debit, including single direct debit, payment
operations through a payment card or
 Member States or their regional or local similar device, transfer of credit operations,
authorities when they are not acting in their
including operations with scheduled
capacity of public authorities.
payment orders;
Conditions related to the payment services
providers  issuance and/or acceptance for payment of
payment instruments;
 A payment institution is defined as the legal
entity authorized under GEO 113/2009 to  delivery of money;
provide payment services within the
European Union and European Economic  performance of payment operations in
Area. The conditions which must be which the payer's consent to carry out a
observed by an entity in order to provide payment transaction is given through any
payment services in Romania are: telecommunication system, digital or
informatics, and the payment is made by
 to obtain an authorization before starting the operator of the system or of the
its activity from the National Bank of telecommunications or computer network
Romania (“NBR”); that acts exclusively as an intermediary
between the user of the payment services
 to be established in accordance with the
and the supplier of goods and services.
provisions of Companies’ Law no. 31/1990;
4

5. The entities providing payment services upon the Regulations repealed
date when GEO 113/2009 entered into force
must apply for an authorization with NBR until Regulation 20/2009 repeals a series of Norms
December 31st, 2010. If these entities shall not issued by NBR regulating: NBFI minimal share
be authorized under GEO 113/2009 until April capital; General, Special and Evidence Registries;
30th, 2011, then they shall not be allowed to notification and registration procedures within
provide payment services any longer. the said registries; criteria for the registration
with the Special Registry; changes within NBFI
With respect to the ongoing contracts, the status; NBFI own funds; supervision of NBFI
payment services providers have the obligation exposures; organization and internal control, the
to ensure the compliance of the contract with administration of significant risks, as well as the
the provisions of GEO 113/2009 within 45 days performance of internal audit.
as of its entering into force. GEO 113/2009
entered into force on November 1st, 2009. NBR amends the regulatory framework
regarding payment institutions
Issuer: National Bank of Romania (“NBR”)
NBR issued Regulation no. 21/2009 regarding
NBR amends the current legal framework payment institutions (“Regulation 21/2009”)
regarding non banking financial institutions which was published in the Official Gazette no.
735/ 29.10.2009, being able to be accessed
NBR issued Regulation no. 20/2009 regarding here.
non-banking financial institutions (“Regulation
20/2009”) which was published in the Official Further to the recent entry into force of the GEO
Gazette no. 707/21.10.2009 and may be 113/2009 which sets forth that the payment
accessed here. The main provisions of Regulation services shall only be provided by payment
20/2009 refer to: institutions authorized by NBR, the said authority
issues the Regulation 21/2009 setting forth the
Registration of Non Banking Financial Institutions conditions which must be met by an undertaking
(“NBFI”) in order to be authorized as a payment
institution along with changes in the activity of
Regulation 20/2009 details the legal
such institution that requires NBR prior approval.
requirements and the documentation necessary
for the registration of NBFI with the General,
The most important new elements brought by
Special or Evidence Registries. Regulation 21/2009 are described below as
follows:
Prudential requirements
Authorization process
Regulation 20/2009 provides a set of prudential
requirements applicable to NBFI in relation to: Among the conditions to be observed by the
the computation of own funds and their entity requesting to be authorized as a payment
minimum level; the maximum limits of institution we underline:
exposures; the general framework regarding the
organization, internal control and audit as well  to have an initial share capital between EUR
as administration of significant risks. 20.000 and EUR 125.000, depending on
the rendered payment services;
Financial Services Industry Monthly Bulletin 5

6.  to have as business scope of activity only  Opening of branches within third party
payment services that shall effectively be countries;
performed;
 Outsourcing important operational services
 shareholders and the persons responsible in connection with the payment services.
for leading and managing the activity to
have a good reputation and an adequate NBR repeals the norms for the application of Law
knowledge related to the nature, extension no. 289/2004 regarding the legal regime for
and complexity of its activity. consumer credits for individual consumers
NBR issued Order no. 8/2009 repealing NBR’s
Furthermore, Regulation 21/2009 obliges the
Order and of the president of the National
undertakings which provide payment services
Authority for Consumers Protection no.
upon the date when Payment Ordinance entered
2/231/2005 on the approval of Norms for
into force to apply for an authorization with NBR
implementing Law no. 289/2004 regarding the
until December 31st, 2010.
legal regime of consumer credit contracts for
Changes within the activity of a payment individual consumers. The above mentioned
institution Order was published in the Official Gazette no.
675/08.10.2009.
Regulation 21/2009 provides also some changes
in the activity of a payment institution which are NBR’s Circular no. 36/2009 regarding the level of
subject to the prior approval of NBR such as: the reference interest rate applicable in October
2009, namely 8.5 % per year
 Amendment of the business scope of
The above mentioned Circular was published in
activity;
the Official Gazette no. 648/1.10.2009 and may
be accessed here.
 Change of the persons responsible for
leading and managing the payment services
activity;
6

7. Issuer: Insurance Supervision Commission
(“ISC”)
ISC amends the current regulatory framework
regarding the Insurance Pool against Natural
Disasters
ISC issued Order no. 20/2009 for the
amendment of the Norms regarding the
Insurance Pool against Natural Disasters as
approved through ISC’s Order no. 17/2009.
The above mentioned Order was published in
the Official Gazette no. 691/14.10.2009 and
may be accessed here
Financial Services Industry Monthly Bulletin 7

8. PPSSC amends the current regulatory framework
regarding the threshold applicable to the
investments made by voluntary pension funds in
Issuer: Private Pension System Supervision
treasury bills
Commission (“PPSSC”)
PPSSC issued Decision no. 25/2009 for the
PPSSC amends the current regulatory framework
approval of Norm no. 17/2009 for the
regarding the threshold applicable to the
amendment of Norm no. 23/2008 for the
investments made by privately administered
temporary amendment of the threshold
pension funds in treasury bills
applicable to the investments made by voluntary
pension funds in treasury bills and approved
PPSSC issued Decision no. 24/2009 for the
through PPSSC’s decision no. 39/2008.
approval of Norm no. 16/2009 for the
amendment of Norm no. 22/2008 for the
The above mentioned decision was published in
temporary amendment of the threshold
Official Gazette no. 693/15.10.2009 and may be
applicable to the investments made by privately
accessed here.
administered pension funds in treasury bills and
approved through PPSSC’s decision no. 38/2008.
The above mentioned decision was published in
Official Gazette no. 693/15.10.2009 and may be
accessed here.
8

9. NSC confirmed the possibility of executing
transactions outside a regulated market or an
alternate transaction system
Issuer: National Securities Commission (“NSC”)
NSC issued the decision nr. 203/28.10.2009
NSC amends the current legal framework
regarding the registration of groups confirming the possibility to execute transactions
outside a regulated market or an alternate
NSC enacted Order no. nr. 55/2009 for the transaction system for financial instruments not
approval of Instruction no. 5/2009 for the admitted to be transacted on a regulated market
amendment of Instruction no. 11/2005 and/or sold in an alternate transaction system
regarding the registration of groups with NSC.
within Romania or on RASDAQ market.
The above mentioned Order was published in
Official Gazette no. 737/ 29.10. 2009. The text Moreover, it is expressly provided that the
of the above mentioned Instruction may be mechanisms based on which the above
accessed here mentioned transactions are carried out do not
fall under the provisions of Law no. 297/2004
NSC amends the current legal framework regarding capital markets.
regarding the income of the institution
The text of the above mentioned decision can be
NSC enacted Order no. 54/2009 for the approval
accessed here
of Regulation no. 7/2009 for the amendment of
Regulation no. 7/2006 regarding the incomes of
NSC. The above mentioned Order was published NSC decided through decision no.
in Official Gazette no. 736/29.10.2009 and may 1501/20.10.2009 that the evaluation report
be accessed here based on which the price within a mandatory
takeover offers is determined shall be made
NSC suspends the application of certain available to the shareholders in the same
provisions of Regulation 1/2006 regarding conditions as the offer itself
issuers and operations with securities
The above mentioned decision can be accessed
NSC decided through Decision no. 16/2009 that here
the application of Article 69 (1), (2) and (4) of
Regulation no. 1/2006 regarding issuers and Other individual acts issued by NSC which may
operations with securities, referring to the present interest to the participants to the capital
professional and independency conditions market
evaluators must met, is suspended until the
entering into force of the amendments of NSC’s  Ordinance no. 587/22.10.2009 regarding
regulations regarding independent evaluators. the evaluators’ obligation to act impartially
The text of the above mentioned decision can be  Decision no. 1511/22.10.2009 regarding
accessed here
the computation of the value of the stocks
NSC decided to forbid the execution of based on income approach
contractual relationships between authorized
entities and the persons sanctioned with a  Decision no. 1512/22.10.2009 regarding
misdemeanor and to whom the complementary the computation of the value of the stocks
measure of forbidding to carry out their activities based on income approach
was applied
NSC decided through Decision no.
1522/26.10.2009 that authorized entities,
regulated and supervised by NSC cannot enter
into contractual relationships regarding specific
activities related to capital market which implies
performance from persons being under the
provisions of Article 273 (1) letter (c) point 3 of
Law nr. 297/2004 regarding capital markets,
namely which have been sanctioned with a
misdemeanor and to whom the complementary
measure of forbidding to carry out their activities
was applied.
The text of the above mentioned decision can be Financial Services Industry Monthly Bulletin 9
accessed here

10. Issuer: Romanian Government From a VAT perspective, the Fiscal Code
implements the new rules adopted by the EU
Romanian Government issued Ordinance no. with regard to the place of taxation of services.
109/2009 for amending and completing the
The main rule for services rendered to taxable
Fiscal Code. Those amendments will enter into
force starting 1 January 2010. persons is that the place of taxation shall be the
place where the beneficiary has established its
The above mentioned Ordinance was published business or has a fixed establishment to which
in the Official Gazette no. 689/13 October 2009. the services are rendered.
For companies operating in the financial sector, The financial-banking institutions and insurance
the deadline for submitting the corporate companies will have new reporting requirements
income tax returns is modified, as follows: for services acquired from suppliers established
in EU, which are taxable in Romania through a
- Taxpayers (except for the banks) that reverse-charge mechanism.
finalize until 25 February the closing of the
previous financial year shall submit the annual Also, as a consequence of the new rules, the
corporate income tax return by 25 February. financial institutions not registered for VAT
purposes (e.g. insurance companies) will have to
- The deadline for submitting the annual register in this respect for acquisitions of services
corporate income tax return is set to 25 April from EU companies.
(banks included).
Recently, the European Court of Justice decided
The deadline for paying the withholding tax on that the transfer of life reinsurance portfolio is
dividends which were not paid until the end of subject to VAT (case C-242/08). An aspect that
the year has been extended until 25 January of deserves a closer consideration is whether this
the following year. decision may be extended to the financial
transactions (e.g. transfer of loan portfolio).
The deadline for submitting of the annual However, an automatic extension of this decision
withholding declaration concerning the to other transactions is not likely, as each
computation and withholding of tax was transaction has different characteristics and even
extended to 30 June of the following year. the scope of the VAT exemption is different.
In case of companies operating in the financial
sector that have as shareholders pension funds,
as defined in the legislation of the European
Union member states, interest and / or dividends
paid to such funds are exempt from withholding
tax in Romania.
10

11. Financial Services Industry Monthly Bulletin 9

12. European Union amends the regulatory European Council amends the regulatory
framework regarding cross border payments framework regarding the collection of statistical
information by the European Central Bank
European Parliament and the Council adopted
Regulation (EC) No 924/2009 as of 16 European Council adopted Regulation (EC) no.
September 2009 on cross-border payments in 951/2009 as of 9 October 2009 amending
the Community and repealing Regulation (EC) Regulation (EC) no. 2533/98 concerning the
No 2560/2001 collection of statistical information by the
European Central Bank.
The said Regulation was published in Official
Journal of the European Union no. The above mentioned Regulation was published
266/9.10.2009 and may be accessed here in the Official Journal of the European Union no.
269/14.10.2009 and may be accessed here
European Union amends the regulatory
framework regarding electronic money Commission notice on current State aid recovery
institutions interest rates and reference/discount rates for 27
Member States applicable as of October 1st
European Parliament and the Council adopts 2009.
Directive 2009/110/EC as of 16 September 2009
on the taking up, pursuit and prudential The said notice was published in the Official
supervision of the business of electronic money Journal of the European Union no.
institutions amending Directives 2005/60/EC and 236/1.10.2009 and may be accessed here
2006/48/EC and repealing Directive 2000/46/EC.
The above mentioned Directive was published in
the Official Journal of the European Union no.
267/10.10.2009 and may be accessed here
12

13. 12

14. Proposal for a Regulation regarding the use of
advanced evaluation approach and the approval
Proposal for a norm for the amendment of NBR’s of such approach by credit institutions for the
Norm no. 26/2006 regarding statistical reporting operational risk
of the data necessary for drafting the payment
balances The above mentioned proposal is now available
for public discussions, with any comments being
The above mentioned proposal is now available able to be send until 20.11.2009 and may be
for public discussions, with any comments being accessed here
able to be send until 15.11.2009 and may be
accessed here
14

15. Proposal for Norms regarding the professional
qualification and continuous training of
Proposal for an Order for the approval of the insurance brokers
accounting regulations applicable to insurance,
insurance – reinsurance and reinsurance The above mentioned proposal may be accessed
companies here
The above mentioned proposal may be accessed Proposal for Norms regarding an unitary
here professional development of the persons
engaged within insurance filed
The above mentioned proposal may be accessed
here
Financial Services Industry Monthly Bulletin 15

16. Proposal for a Norm for the amendment of
Norm no. 11/2008 regarding the collection of
Proposal for a Norm regarding reporting and individual contributions of the participants to the
transparency obligations in the private private administered pension funds
administered pension system
The text of the above mentioned proposal may
The text of the above mentioned proposal may be accessed here
be accessed here
Proposal for a Norm regarding the minimum
Proposal for a Norm regarding the adhering and rentability of all private administered pension
evidence of the participants to the private funds
administered pension funds
The text of the above mentioned proposal may
The text of the above mentioned proposal may be accessed here
be accessed here
16

17. Financial Services Industry Monthly Bulletin 15

18. European Commission has adopted additional Opinion of the European Central Bank of 29
legislative proposals to strengthen financial September 2009 on a proposal for a Council
supervision in Europe Regulation on the introduction of the euro
The European Commission has adopted on For further details please access the following
26.10.2009 additional legislative proposals to link
further strengthen financial supervision in
Europe, aiming to create a European System of Compendium Paper on the supervisory
Financial Supervisors by establishing three new implementation practices across EU Member
European Supervisory Authorities: European States of the Third Money Laundering Directive
Banking Authority, European Insurance and
For further details please access the following
Occupational Pensions Authority and European
link
Securities and Markets Authority.
The Federal Reserve, along with the other
For further details please click here financial regulators of the Federal Financial
Institutions Examination Council has adopted a
The Commission proposes future policy actions policy statement on Prudent Commercial Real
to strengthen the safety of derivatives markets Estate Loan Workouts
The European Commission has adopted on For more details please click here
20.10.2009 a Communication for ensuring
efficient, safe and sound derivatives markets.
The Communication sets out future policy
actions to increase transparency of the
derivatives market, reduce counterparty and
operational risk in trading. For more details,
please click here
18

19. Reff & Associates is the correspondent law firm of Deloitte Romania, fully
integrated with the Deloitte multi-disciplinary advisory practice and affiliated to a
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In the financial services sector, Reff & Associates provides the full range of services
to banks and financial institutions, including:
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workouts, securitisation, loan transfers and assists in drafting and
negotiating the transaction documentation (loan agreements, security and
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of the transaction, the pre-contractual documentation, due diligence,
drafting/negotiating the purchase agreements and assisting the
implementation of the transaction.
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legal and regulatory requirements applicable to banks / non banking
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Financial Services Industry Monthly Bulletin 9

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