June edition of Financial Services Industry Monthly Bulletin – a banking and finance law publication by Reff & Associates, correspondent law firm of Deloitte Romania and Deloitte Tax. Each month, our specialist team of finance lawyers and tax advisors prepares for you a summary of the latest legal, tax and regulatory developments relevant for banks, non-banking financial institutions, private pensions and capital markets in Romania. In addition, our bulletin updates you on the most recent changes and trends in the international financial services industry regulatory framework.

1. June 2010

3.  Provisions with respect to commissions
With respect to the commissions to be charged
by credit institutions in relation to the consumer
credits, GEO 520/2010 establishes the following:
Romanian Government amends the current
regulatory framework regarding the credit  the increase of the commissions, taxes,
facilities for consumers costs, bank charges or other costs related to
the credit agreement is prohibited, except
The Romanian Government enacted the for those imposed by legislation (i.e. file
Emergency Ordinance no. 520/2010 regarding analysis fee, administration credit fee or
the credit facilities for consumers („GEO current account administration fee, early
520/2010”). Further to entry into force of the repayment fee, insurance costs, penalties,
GEO 520/2010, provisions of Law no. 289/2004 or single commission for services provided
regarding the legal regime of the credit facilities upon the consumer demand);
for consumers - natural persons, shall be
repealed.  in relation to the amounts drawn down, it
is prohibited to charge a commission for the
It is worth mentioning that the protection disbursement of the respective amounts;
granted to the consumers through the provisions
of GEO 520/2010 shall be also maintained in  in case that the facility is not granted, it is
case that the law applicable to the agreement is forbidden to charge a file analysis fee.
the law of a non-member state, if the credit
facility is closely related to the territory of a  Early repayment fee
member state.
According to the provisions of GEO 520/2010,
The most significant amendments brought the early repayment fee in relation to credit
through the provisions of GEO 520/2010 are facilities having a variable interest rate is
presented below: prohibited. In case of credit facilities having a
fixed interest rate, the early repayment fee may
 The withdrawal right of the consumer not exceed 1 %, if the period of time between
the early repayment date and the maturity date
In accordance with the provisions of GEO of the credit agreement exceeds one year, and it
520/2010, the consumer may withdraw from the may not exceed 0,5 % in case the mentioned
credit facility, without giving any reason, within period of time does not exceed one year.
14 calendar days either as of the conclusion date
of the credit agreement, or as of the day when The regulations regarding the early repayment
the consumer is notified with respect to the shall be applicable to the leasing agreements
amendments that the creditor envisages to bring which are subject to the provisions of GEO
to the existing credit agreement. If the consumer 520/2010, further to the expiry of a12 months
exercises his/her right of withdrawal, he/she will period as of their conclusion.
pay to the creditor the principal or the amounts
drawn down and the related accrued interest.

4.  Limitation of default interest rate amount  Assignment of the creditor's rights under
the credit agreement
In accordance with the provisions of GEO
520/2010, the default interest rate in case of late In the event that the creditor assigns its right
payments cannot be 2 percentage points higher under the credit agreement or the credit
than the interest rate to be paid in lack of such agreement itself, the assignor is obliged to notify
delay, in case the consumer or his/her spouse is the assignment to the consumer within 10 days
in one of the following situations: unemployed, as of the execution of the assignment agreement
extended sick leave, divorced, death, decreased by registered mail with confirmation receipt.
of the salary by at least 15% of its value.
The assignee is requested to have a contact
 Provisions concerning the amendment of person in Romania for the purpose of solving the
credit facilities potential disputes and to be kept liable in front
of the public authorities.
In accordance with GEO 520/2010, there are
prohibited the contractual clauses giving to the  Linked credit agreements
creditor the right to unilaterally amend the
contractual terms without the execution of an The GEO 520/2010 prohibits the execution of
additional act agreed by the consumer. credit agreements having for object the
acquisition of goods / services in the trading
 In case of amendments requested by the spaces of such goods and / or services, even in
applicable legislation, the lack of execution case such credit agreements would be executed
of the additional acts by the consumer shall through the dealers of the goods and / or
be deemed an implicit approval. In this services.
case, the inclusion in the additional acts of
provisions different to those requested by However, linked credit agreements are excluded
the legislation are null by law; from the application of this interdiction. The
linked credit agreement means a credit
 In case of amendment of contractual terms agreement where the credit serves exclusively to
regarding the costs, the creditor should finance an agreement for the supply of specific
send to the consumers a notification with at goods or the provision of a specific service, and
least 30 days prior to their application. The it is characterized by the fact that the two
consumer has to notify its option within 15 agreements, facility and sale-purchase
days as of receipt of the notification. The agreements, form a commercial unit from an
lack of any answer from the consumer objective point of view.
cannot be considered implicit acceptance of
the new conditions and the agreement will GEO 520/2010 mentions that, where the goods
remain unchanged. In case that the or services covered by a linked credit agreement
consumer does not accept the new are not supplied, or are supplied only in part, or
conditions, the creditor does not have the are not in conformity with the contract for the
right to sanction the consumer or to supply thereof, the consumer shall have the right
accelerate the credit; to pursue remedies against the creditor if the
consumer has pursued his remedies against the
 In case of the consumer's impossibility to supplier but has failed to obtain the satisfaction
accept the amendment of the contractual to which he/she is entitled. In this case, the
terms regarding the increase of interest, the creditor is jointly liable with the supplier with
creditor does not have the right to respect to any remedies the consumer may
unilaterally terminate the credit facility pursue against the supplier.
without firstly proposing to the consumer a
rescheduling or a refinancing of the facility,
taking into account the consumer’s income,
if such rescheduling / refinancing is possible
according to internal regulations of the
creditor.

5.  The competent authority for the application NBR amended the interest rates payable on
of provisions of GEO 520/2010 minimum mandatory reserves
For the application of the provisions of the GEO NBR issued Circular no. 19/2010 regarding the
520/2010, the consumers may refer to National interest rates payable on minimum mandatory
Authority for Consumer Protection. In exercising reserves. The above mentioned Circular sets
its attributions, National Authority for Consumer forth the interest rates payable on minimum
Protection is entitled to apply fines in amount mandatory reserves during May 24 - June 23,
between 10,000 lei to 100,000 Lei. In addition, 2010 as follows:
the National Authority for Consumer Protection
may also order: (i) immediately compliance of  2.02% per year for minimum mandatory
the infringed contractual terms, (ii) reserves set up in RON;
reimbursement of the amounts disbursed
without legal basis, (iii) bringing the contract in  1.07% per year for minimum mandatory
accordance with legal provisions and (iv) reserves set up in Euro;
reparation of the deficiencies ascertained under
the protocol.  0.99% per year for minimum mandatory
reserves set up in U.S. dollars.
GEO 520/2010 was published in the Official
Gazette no. 389/11.06.2010 and will entry into The said Circular was published in the Official
force within 10 days as of the publication date, Gazette no. 389/11.06.2010 and may be
respectively on June 21, 2010. Within 90 days as accessed here.
of its entry into force all the credit agreements in
place should be amended in order to comply
with the provisions of GEO 520/2010.
MPF amended the regulatory framework
regarding the implementation of “First house”
programme
NBR established the level of the reference
interest rate for June 2010 MPF issued Order no. 1.814/2010 for the
amendment of MPF’s Order no. 2.225/2009. The
NBR issued Circular no. 18/2010 regarding the said order amends among others the template
level of the reference interest rate valid for June convention for the guarantee of housing
2010. According to the above mentioned construction and was published in the Official
Circular, the interest reference rate of NBR valid Gazette no. 407/18.06.2010.
for June 2010 was 6.25% per year. The above
mentioned Circular was published in the Official
Gazette no. 360/01.06.2010 and may be
accessed here.

6. ISC amended the regulatory framework PPSSC set the regulatory framework regarding
regarding the activity of entities organizing the profitability rates of the privately managed
unitary professional trainings for insurance pension funds
personnel
PPSSC adopted Decision no. 9/2010 for
ISC enacted Order no. 6/2010 for the approving Norm no. 7/2010 regarding the
implementation of the Norms regarding the profitability rates of the privately managed
activity of entities organizing unitary professional pension funds. The above mentioned Decision
was published in the Official Gazette no.
training courses for insurance personnel. The 369/04.06.2010 and may be accessed here.
above mentioned Order was published in the
Official Gazette no. 417/22.06.2010 and may be
accessed here.
ISC amended the regulatory framework
regarding the professional qualification and
continuous training of the persons active in the
distribution of insurance products NSC amended the regulatory framework
regarding the certification of the professional
ISC enacted Order no. 7/2010 for the
training institutions, operators and specialists
implementation of the Norms regarding the
within capital markets
professional qualification and continuous
training of the persons active in the distribution NSC issued Order no. 36/2010 for the approval
of insurance products. The above mentioned of Regulation no. 12/2010 regarding the
Order was published in the Official Gazette no. certification of the professional training
417/22.06.2010 and may be accessed here. institutions, operators and specialists within
capital markets. The above mentioned Order was
published in the Official Gazette no.
404/17.06.2010 and may be accessed here.
NSC amended the regulatory framework
regarding the performance of public offers
through the trading system of a market/system
operator
NSC issued Order no. 37/2010 regarding the
approval of Instruction no. 2/2010 for the
amendment of Instruction no. 3/2007 regarding
the performance of public offers through the
trading system of a market/system operator. The
above mentioned Order was published in the
Official Gazette no. 401/16.06.2010 and may be
accessed here.

7. Romanian Government amended
law no. 571/2003 regarding the Fiscal Code and
other financial-fiscal measures.
The Romanian government has enacted an
Emergency Ordinance for the amendment of law
no. 571/2003 regarding the Fiscal Code and
other financial fiscal measures.
We point out that starting 1 July 2010 income
derived from deposits, current accounts and
savings accounts received by individual residents
in Romania and non-residents is taxable income.
This income would be subject to a tax of 16%.
New criteria were introduced for requalification
of the independent activities as dependent,
which it is possible to have as consequences the
increase of the social securities contributions for
certain persons. This requalification may have a
very significant impact on the capacity of
individuals for reimbursement of the credits
obtained, especially when the tax authorities set
up additional liabilities further to tax controls.
The above mentioned law was published in the
Official Gazette no. 431/28 June 2010 and can
be accessed here.

9. The main provisions of the draft order
 starting with financial year 2012, credit
institutions will keep the accounts and will
prepare the annual individual financial
statements in accordance with IFRSs as
NBR published a proposal of Regulation on adopted following the procedure set out in
temporary holding of shares during an assistance Article 6(2) of the Regulation (EC) No.
operation or financial restructuring of an entity 1606/2002 of the European Parliament and
outside the financial sector. of the Council of 19 July 2002 on the
application of international accounting
For more information please access here. standards;
Proposal of Order regarding the implementation  starting with January 1, 2012, credit
of the International Financial Reporting institutions will organize and run the
Standards by credit institutions as a basis for accounting in accordance with the IFRS
accounting and preparation of individual annual provisions, the Accounting Law’s provisions
financial statements as of the financial year 2012 and other applicable legal provisions, as
well as with the regulations issued by the
General objective and reasons for elaboration of National Bank of Romania for the
the normative act implementation of this order.
Implementation of International Financial The full text of the proposal may be accessed
Reporting Standards in the banking sector is an here.
objective set out both in the Report on the
Observance of Standards and Codes– Proposal of Order amending NBR’s Order no.
Accounting and Auditing – ROSC issued by the 13/2008 for the approval of Accounting
World Bank in December 2008 and in the FSAP Regulations in accordance with European
program (Financial Sector Assessment Program) directives applicable to credit institutions, non-
issued by the International Monetary Fund and banking financial institutions and to the Fund for
the World Bank in May 2009, as well as in the deposit guarantee in the banking system
Letter of Intent signed in Bucharest on the 5th of
February 2010 and approved by the Decision of General objective and reasons for elaboration of
the International Monetary Fund’s Executive the normative act
Board on the 19th of February 2010, whereby
the National Bank of Romania and the Ministry The draft order is issued following the
of Public Finance commit themselves to adopt recommendation of the Superior Council of
towards the end of the program’s period the Accounting and Financial Reporting Council to
necessary legal framework so as to achieve the adopt a unified framework in terms of
comprehensive implementation of IFRSs starting accounting rules and treatments applied by
with the beginning of 2012. entities covered by the regulation and
supervision of the NBR for similar operations
with those performed by the other economic
operators.
The draft order aims at implementing and
tailoring of changes and additions made by the
Ministry of Public Finance Order no. 3055/2009
for approval of accounting regulations according
with European directives, to the extent they are
applicable to institutions regulated and
supervised by the National Bank of Romania.

10. The main changes and additions to existing Proposal of Regulation amending Regulation no.
accounting rules (Order NBR no. 13/2008) by the 6/2008 regarding the changes in the situation of
draft order, refer to the following issues the credit institution, Romanian legal entities
and the Romanian branches of the third-country
 inserting of provisions relating to the annual credit institutions
financial statements’ users categories and
the qualitative characteristics of these According to the provisions of the Article 108 of
reports; the Government Emergency Ordinance no.
99/2006 on Credit Institutions and Capital
 examples and additions to provisions on Adequacy, subsequently amended and
general accounting principles; supplemented, each of the persons appointed to
perform the administration and/or management
 supplementing the provisions on valuation duties in a credit institution, as well as any
of assets, liabilities and equity when person appointed to ensure middle management
inventoried and on presenting these functions relative to the activities of a significant
elements in balance sheet; importance, should be approved by the National
Bank of Romania before starting the fulfillment
 supplementing the provisions on of their tasks, according to the regulations
accounting errors correction; issued.
 change in accounting treatment for The draft regulation is aiming to amend the
government grants; relevant provisions of the Regulation no. 6/2008
in order to expressly cover all cases when, due to
 expanding the current provisions of the the changes in the credit institution’s internal
accounting treatment for given and organizational structure or lines of
received trade discounts; responsibilities, new persons are appointed to
fulfill the referring tasks, or the persons already
 specifying the factors which indicate approved by the National Bank of Romania are
impairment of tangible and intangible assuming new responsibilities. In all of these
assets; cases, according to the law, the National Bank of
Romania’s prior approval is required.
 separate accounting for tangible assets and
inventories purchased, in case of which the The full text of the proposal can be accessed
risks and benefits were transferred, but that here.
are not yet received.
The full text of the proposal can be accessed
here.

12. CEBS revised consultation papers on settlement
of OTC derivatives
LMA amended coordinating committee letters On 23 June 2010, CEBS published a revised
consultation paper on its draft guidelines on the
On 17 June 2010, LMA published amended management of operational risk in market-
versions of its coordinating committee letters. related activities. CEBS originally published the
The letters govern the appointment of a guidelines in December 2009 but, following
coordinating lender and coordinating committee feedback, has now revised them and launched a
of lenders in connection with the refinancing of second consultation. The consultation period
a borrower's bank loans. The above mentioned ends on 23 July 2010.
letters may be accessed by LMA members here.
The above mentioned guidelines can be accessed
LMA published new netting agreements, here.
termination and transfer agreements
CEBS published on June 14, 2010 the
On 30 June 2010, LMA published the following Implementation Guidelines on capital
new documents: Multilateral Netting instruments referred to in Article 57 (a) of
Agreement; Bilateral Netting Agreement; Directive 2006/48/EC recast.
Bilateral Termination and Transfer Agreement;
Termination Agreement. The above mentioned Implementation
Guidelines can be accessed here.
LMA also published updated versions of the
following documents: Multilateral Termination & CEBS published on June 15, 2010 its Annual
Transfer Agreement (Novation); Secondary Report for 2009.
Trading Documentation User Guide. More details
may be accessed by LMA members here. The mentioned report may be accessed here.
CEBS initiated on June 17, 2010 a public
consultation on several amendments to the
Guidelines on Common Reporting.
The mentioned amendments may be accessed
EPCEMA recommends legislation on cross-
here.
border insolvency or "crisis management" for
banks CEBS published on June 11, 2010 its report on
national implementation of CEBS’s high-level
On 28 June 2010, EPCEMA passed a request to
principles for remuneration policies.
the European Commission to draft a legislative
framework creating a common insolvency The said report may be accessed here.
regime for financial institutions operating across
borders within the European Union. The motion CEBS published on June 30, 2010 two follow-up
follows a consultation process that began on 20 reports setting out the outcome of its efforts in
October 2009 on crisis management in the assessing banks’ disclosures.
banking sector. For more details, please access
here. For more information please access here.

13. EC initiated on June 14, 2010 a consultation on
the options to be be considered for a
CEIOPS released on June 29, 2010 the half- forthcoming legislative proposal dealing with
yearly report on the financial conditions and potential risks from short selling.
stability of the insurance and occupational
For further information please access here.
pension fund sector in the EU/EEA covering
developments in the insurance, reinsurance and
EC initiated on June 14, 2010 a public
occupational pension fund markets for recent
consultation on derivatives and market
years.
infrastructures.
For more information about the press release
The mentioned consultation may be accessed
please access here.
here.
EC has published on 25 June, 2010, a
consultation paper on the review of the Market
Abuse Directive.
For more details please access here.
On 17 June 2010, the European Parliament
approved, with amendments, the Commission's
proposal to amend the Prospectus Directive
( 2003/71/EC). The proposal still has to be passed
by the rest of the EU legislature before the
Prospectus Directive is amended.
For more information please access here.

14. Reff & Associates is the correspondent law firm of Deloitte Romania, fully
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In the financial services sector, Reff & Associates provides the full range of services
to banks and financial institutions, including:
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negotiating the transaction documentation (loan agreements, security and
other ancillary documentation).
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of the transaction, the pre-contractual documentation, due diligence,
drafting/negotiating the purchase agreements and assisting the
implementation of the transaction.
- Regulatory assistance: ongoing assistance with respect to the specific
legal and regulatory requirements applicable to banks / non banking
financial institutions operating in Romania, development of new
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For more details on our services and credentials in the FSI sector, please click here
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