The Romanian Investor Relations Association (ARIR) sets its own agenda of legislative priorities to contribute to the development of the capital market
- Attractiveness: Shorten by half the duration of the capital increase operations and of other corporate operations for the listed companies is a desideratum of ARIR’s community;
- Efficiency: Reduce the bureaucracy for shares and bonds issuers, as well as streamline inter-institutional dialogue to unify the reporting platforms and avoid duplication of the financial and non-financial reporting;
- Relevance: Reflect the role of the capital market as a financier of the economy in the government programs, strategies and policies, attract new issuers to the Bucharest Stock Exchange from the SMEs with the potential to develop and scale the business, attract new individual investors through financial education;
The Romanian Investor Relations Association (ARIR), the only association specialized in Investor Relations from Romania, announced at ARIR Annual Forum its agenda of legislative priorities for the next 3 years, in line with the good international practices of similar associations in the developed and emerging markets. The approach reflects the vision of the listed companies regarding the development of the Romanian capital market, by increasing its attractiveness, efficiency and a higher relevance.
At the beginning of this year, ARIR members centralized the legislative and public policy issues related to their activity on the capital market.The most common problems faced by ARIR members regarding the local capital market and the regulations applicable to issuers relate to the multiple forms and reporting systems for the same information – the lack of a single platform, of an integrated reporting system to BVB and ASF. The issuers want a single annual report, a simplification of records and of the duration of the capital changes and of the processing of the corporate events. Duplicate reporting to BVB and ASF and overlapping documentation that needs to be prepared unnecessarily increases the complexity of the reporting process. Furthermore, simplifying and clarifying the reporting of real beneficiaries, the requirements for reporting transactions with related parties and the formalities provided by Law 24/2017 would facilitate the implementation of integrated reporting.
The first directions of action will be:
- Shorten by half the duration of the capital increase operations and of the other corporate operations for the listed companies is a desideratum of the ARIR community;
- Reduce the bureaucracy for shares and bonds issuers, as well as streamline inter-institutional dialogue to unify reporting platforms and avoid duplication of the financial and non-financial reporting;
- Reflect the role of the capital market as a financier of the economy in the government programs, strategies and policies, attract new issuers on the Bucharest Stock Exchange from the SMEs with the potential to develop and scale the business, attract new individual investors through financial education.
In order to create a uniform and effective mechanism for institutionalized dialogue with the relevant authorities of the capital market and to be the only professional voice of issuers in relation to the authorities, ARIR sets up an internal working group on legislation, public policy and advocacy, composed of representatives of issuers, jurists and lawyers, public policy and advocacy specialists, legislative monitoring and communication specialists. The first members that joined the group are:
- Adrian Tănase, CEO Bucharest Stock Exchange;
- Marius Ștefan, CEO and Founder, Autonom;
- Marian Năstase, Chairman, ALRO;
- Ioana Olănescu, Chief Governance Officer, Banca Transilvania;
- Claudiu Cercel, Deputy CEO, BRD Group Societe Generale;
- Constantin Sebeșanu, CEO IMPACT Developer & Contractor;
- Eugen Comendant, COO Purcari;
- Huang Liang Neng, CEO Romcarbon;
- Alexandru Stânean, CEO TeraPlast;
- Daniela Șerban, ARIR President;
- Narcisa Oprea, lawyer, Partner Schoenherr;
- Mircea Mitruțiu, advocacy and public policy consultant.
According to an independent analysis contracted by ARIR and realized by the expert Mircea Mitruțiu, the way the Romanian state currently understands and capitalizes on the role, potential and tools of the domestic capital market is incomplete and inefficient for solving the complex needs of financing, development, and reform of the economy and of the budget. On the one hand, The Government Program 2021-2024 includes measures proposed for the Ministry of Finance to consolidate the emerging market status of the Bucharest Stock Exchange and its development through: actively supporting the listing of new companies; stimulating the bond market, including through fiscal facilities, to increase transparency, access to finance and corporate governance performance; opening new investment and savings opportunities for the population. On the other hand, the Monitoring of the Institutional Strategic Plans (PSI) 2019 -2022 of the relevant ministries for the capital market reveals the following:
- Ministry of Business Environment, Trade and Entrepreneurship: the Institutional Strategic Plan does not link the capital market to financing the development of SMEs with potential to export or internationalize business, being focused exclusively on national SMEs financing programs and entrepreneurship from the state budget.
- Ministry of Economy: the interest in the local capital market is strictly associated with the corporate governance of state-owned enterprises, where the lack of independence in terms of management and dividend policy is highlighted as a weak point.
- Ministry of Public Finance: the interest in the local capital market is strictly associated with optimizing the process of financing the state budget deficit and refinancing the public debt in the medium term.
In the first three years since its establishment, ARIR has been actively involved in dialogue with capital market institutions on topics such as: clarifying the legislation on the conduct of the GMS in hybrid format in the context of the pandemic situation, supporting the need for a single reporting point for issuers, postponing the implementation of the Single European Reporting Format (ESEF), clarifying the implementation in the local legislation of the remuneration policy and report, introducing in COR two new occupations for specialist and director for investor relations, clarifying the requirements for non-financial reporting for issuers. All these topics remain of interest in the future.
ARIR will act to simplify and eliminate reporting obligations and information required to issuers that are not relevant and useful to investors but are only an unjustified and administrative burden. We aim to implement the measurement of primary and secondary compliance costs and administrative burdens – based on the Standard Cost Model, the SME Test and online surveys conducted regularly among issuers and investors.