Ovidiu Petru, ASF: “Romania should have a law on crowdfunding by November”

“There are many projects underway at the Authority level. An issue is that of cryptocurrencies. This sector is growing very fast, but it comes with a number of risks that need to be considered. In recent months, there has been an accelerated growth of markets for cryptocurrencies. It is estimated that there are over 9,000 crypto projects worldwide, over 300 exchanges, and the market capitalization is about 2,000 billion dollars,” Ovidiu Petru, Capital Markets Expert, Financial Supervisory Authority (ASF) said during the Financial Forum 2021 organized by The Diplomat-Bucharest.

Given these developments, some countries have already begun to regulate parts of this market. The European Commission has taken a step forward and published in September 2020 three regulations: the regulation on MICA (Markets in Crypto assets), the DORA regulation, and the DLT regulation on blockchain distribution registers.

MICA will apply to persons involved in the issuance of cryptocurrencies, as well as services related to the provision of cryptocurrencies in the EU that are not regulated by other European legislation. The purpose of the regulation is to address some of the risks that may be associated with cryptocurrencies. The draft regulation establishes a set of rules on transparency and publicity requirements for the issuance, admission to trading of cryptocurrencies, authorization and supervision of cryptocurrencies services, issuers of cryptocurrencies, organization, and implementation of the token governance system.

While these three regulations are in the draft phase, there is a regulation approved by the European Commission, the crowdfunding. It will apply directly to the Member States from 10 November 2021. It refers to European providers of crowdfunding and is the first legislative initiative to regulate these activities at European level.

The purpose of this regulation was to provide an alternative financing for SMEs, given that the lack of access to finance for these companies is a problem in some Member States. At the ASF level, a draft law for the implementation of this regulation was elaborated. The project is now at the Ministry of Finance and will go through the inter-ministerial approval cycle. As a deadline, it should enter into force by November 10, 2021, being an absolute legislative novelty for Romania, considering that at national level there is no normative act to regulate this activity.

We are also working on the central counterpart project. We collaborate with the Bucharest Stock Exchange for the realization of this infrastructure. By a decision of the ASF president, we have an internal working group that has the objective of supporting the CCP authorization and going through the authorization plan of the central counterparty. On October 1, 2021, the submission of the CCP authorization file to ASF by ccp.ro is foreseen, and the operational start-up deadline is June 2022.

Macroeconomic risk and market risk remain high. Uncertainty remains a key factor globally amid the interconnection of financial markets and the speed of transmission of potential shocks. We notice that the risk of decreasing profitability also persists, as there is the possibility of deteriorating the results obtained by companies as a result of the risks of interruption of some supply or distribution chains. The credit or liquidity risks should not be neglected either, the realization of which could be a consequence of the materialization of the previously mentioned vulnerabilities.

ASF has an intense activity on the financial education side. Along with our legislative projects, we pay more attention to the area of ​​financial education. In the last 5 years, over 160,000 students, over 13,000 students, over 3,000 teachers have participated in financial education courses.

The Diplomat Bucharest organized Financial Forum event in online format, on April 21,2021. The conference joined leaders spearheading digital initiatives in their organizations to offer insights into their digital transformation journey’s in fintech & banking, as well in capital markets and insurance.

The fast evolution of digital in all industries mirrors in the behaviours and innovations brought by banks,  financial institutions to meet the clients’ needs to abstain from overspending, navigate risks, and usually deal with their finances better. FinTech services and products are more and more designed for particular functions inside the financial ecosystem and customization is key to win more clients and portfolios.