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BNY Mellon hails trailblazing move to open up Romanian market to foreign investors

  • Listed companies able to trade securities in other EU countries by issuing depositary receipts
  • Move follows similar rule changes this year in Taiwan allowing non-capital raising DRs

BNY Mellon, a global leader in investment management and investment services, has welcomed new rules which make it easier for foreign investors to buy securities in Romanian companies by allowing more companies to issue depositary receipts (DRs).

In 2013 the Financial Supervisory Authority (FSA) in Romania agreed to allow Romanian-based companies, listing in their home market for the first time, to also list in other European Union (EU) member states in DR form. Under new rules outlined by the FSA, Romanian-based companies which are already listed on a Romanian regulated market will be able to issue DR programs in the EU. This will allow Romanian based companies to utilise DRs for non-capital raising technical listings and secondary public offers.

"The new FSA rules will help Romanian companies diversify their investor base and provide more opportunities for foreign investors to participate in an exciting growth market," said Christopher M. Kearns, CEO of BNY Mellon's Depositary Receipts business. "As depositary bank for both Romgaz and Electrica, BNY Mellon is at the forefront of this evolution in the market."

In November 2013 Romgaz, Romania's largest natural gas producer and supplier, listed its Global Depositary Receipts (GDRs) on the London Stock Exchange. In July this year Electrica, the country's leading power supplier and distributor, listed its GDR program on the LSE. Romania is rich in energy reserves and its economy is growing at four times the rate of the eurozone1.

The FSA's new rules follow a similar move made recently by Taiwan's Financial Supervisory Commission (FCC) to allow for non-capital raising depositary receipts. BNY Mellon supported the FCC in developing the new guidelines, which could be instrumental in attracting greater foreign investment.