Lawmakers ask annulment of SIF ownership threshold

A draft law on the financial investment companies (SIF) issued by 19 deputies and senators rocked Romania's capital market yesterday, with SIF quotations shooting up as much as 12 percent only minutes after the news was out.

The lawmakers want the SIF ownership threshold, currently set at 1 percent of total shares, to be eliminated. The threshold was an issue for debate for some time, but this is the first proposal for its elimination, in contrast to an increase in the ownership limit to 2, 3 or 5 percent.

Senator Ovidiu Marian, who initiated the draft law, told Business Standard that he has been working since April to change the legislation in the field. The Senate's Permanent Bureau is to decide on 29 June whether the draft will be sent to the Chamber of Deputies or the Senate for debates, he added. The five SIFs are among the top companies listed on the Bucharest Stock Exchange (BVB). On the capital market, these are worth a total €560 million, while their net assets amount to some €1.4 billion. BVB's top investors, such as investment funds Julius Baer, East Capital, and Hyposwiss, are among SIF shareholders. On the other hand, the SIFs own stock in various companies, including the country's largest lender, Banca Comerciala Romana (BCR), controlled by Austrian Erste group.

The heads of the financial investment companies indicated that Parliament's intervention on the capital market is unconstitutional, given that this will lead to a change in the articles of incorporation for some private companies if the draft is passed and enforced. "It would be best for shareholders to decide. They are the ones who should decide what happens with the threshold, and not the lawmakers," SIF Oltenia President, Dinel Staicu, said. "What if a new parliament comes in four years time and changes the legislation?" he added.

Business Stadard