Investment funds on romanian capital market

• Author: Cristian Gheorghe
• Position: Associate Professor, PhD, 'Nicolae Titulescu' University of Bucharest, Faculty of Law, Private Law Department (gabi_uluitu@yahoo.com).
• Pages: 19-25

LESIJ NO. XXI, VOL. 2/2014

INVESTMENT FUNDS ON ROMANIAN CAPITAL MARKET

Cristian GHEORGHE *

Abstract

National la ws governing collective investment undertakings were updated as a result of European

secondary law modernization with a view to approximating the conditions of competition between those

undertakings at Community level, while at the same time ensuring more effective and more uniform

protection for unit-holders. Such coordination intended to fa cilitate the removal of the restrictions on

the free movement of units of UCITS in the in ternal market. For the purposes of internal regulation

UCITS means an undertaking: (a) with the sole object of collective investment in transferable securities

or in other liquid financial assets of capital raised from the public and which operate on the principle

of risk-spreading; and (b) with units which are, at the request of holders, repurchased or redeemed,

directly or indirectly, out of those undertakings’ a ssets. The UCITS may be constituted in accordance

with contract law (as common funds managed by management companies), trust law (as unit trusts),

or statute (as investment companies).Key investor information should be provided as a specific

document to investors, before the subscription of the UCITS, in order to help them to reach informed

investment decisions. Investment funds enjoy in Romania a new regulatory framework: the contract of

common society hosted by new Civil Code and the new Emergency Ordinance regarding UCITS.

Keywords: capital market, investments, undertakings for collective investment in transferable

securities (UCITS), financial supervisory authority, key information

Introduction*

The Romanian Capital Ma rket Act

(Law no 297/2004) thoroughly regulated the

undertakings for collective invest ment in

transferable securities (UCITS) since 200 4

till 2012 . Following the amendments made

on European level since 2009 (beginning

with Directive 2009 /65/EC of the European

Parliament and of the Council on the

coordination of laws, regulations and

administrative provisions relating to

undertakings for collective invest ment in

transferable securities (UCITS)) Romanian

legislator has chosen to recast the rules in an

independent act, outside of consolidated

Capital Market Act intended to comprise all

the capital market regulations: GEO no

32/2012. This normative act encompasses

* Associate Professor, PhD, “Nicolae Titulescu” University of Bucharest, Faculty of Law, Private Law Department

(gabi_uluitu@yahoo.com).

many measures designed to rebuild the tr ust

in a capital market continuously shaken by

an endless economic crises.

The establishment of a financial

supervisory authority (European Securities

and Markets Authority, hereinafter ‘ESMA’,

agreed by Regulation (EU) No 1095/2010 of

the European Parliament and of the Council)

is a strong signal of determination on

European stage to coordinate the measures

converging to build a uniform and efficient

framework for capital market.

One of the new elements of the UCITS

regulation is key investors in formation: the

new law requires that an investment

company and, for each of the common funds

it manages, a management company draws

up a short document containing key

information for investors. Such information