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Dec 11, 2014

Romania to issue DRs in bid to open up market to foreign investors

Easing of regulations on DRs for Romanian companies part of broader plan to allow indirect listings on foreign markets

Romania’s Financial Supervisory Authority (FSA) has eased regulations on the issuance of DRs, allowing Romanian companies already listed on a Romania-regulated market to issue DR programs in fellow member states of the European Union (EU).

The FSA ruling, which continues a move started last year toward easing regulations on DRs, will allow Romanian companies to use DRs for non-capital raising technical listings and secondary public offers, the authority says.

BNY Mellon, which acts as depositary for more than 2,800 US and global DR programs, says the move will help ease access for foreign investors wanting exposure to Romanian companies and open up new channels of investment for companies based in the European nation.

In 2013 Romania’s FSA eased regulations to allow companies listing in their home country for the first time to also list in other member nations of the EU. Shortly after, Romgaz, Romania’s largest natural gas producer and supplier, listed its global DRs on the London Stock Exchange. Romanian power supplier and distributor Electrica did the same in July this year.

‘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,’ says Christopher Kearns, CEO of BNY Mellon’s DR business, in a press release welcoming the change. ‘As depositary bank for both Romgaz and Electrica, BNY Mellon is at the forefront of this evolution in the market.’

The FSA says in a statement on its website that the easing is part of a broader program called STEAM (Set of actions Toward Establishing and Acknowledgment of the Emergent Market status), designed to ‘increase the visibility of Romanian companies listed on capital markets through the possibility of indirect listings on other capital markets.’