Sept 2010 Financial Services Industry Monthly
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Sept 2010 Financial Services Industry Monthly

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September 2010 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.

September 2010 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.

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Sept 2010 Financial Services Industry Monthly Sept 2010 Financial Services Industry Monthly Document Transcript

  • Financial Services Industry Monthly Bulletin Contents III. Domestic regulatory proposals / measures I. Domestic regulatory updates 1. Banking 1. Banking 2. Capital Markets 2. Capital Markets 3. Insurance 3. Insurance IV. International regulatory II. International regulatory updates proposals / measures 1. Banking 1. Banking 2. Capital Markets 3. Commercial Law 4. Private Pensions September 2010
  • Domestic regulatory updates
  • NBR amended the legal framework Banking regarding the commencement of activity and the changes in the case of credit institutions Issuer: National Bank of Romania (“NBR”) NBR enacted Regulation no. 10/2010 amending the Regulation of NBR no. 6/2008 NBR established the level of the reference regarding the commencement of activity and the changes in the case of credit institutions, interest rate applicable for September 2010 Romanian legal entities, and in case of local branches of the credit institutions from foreign NBR enacted Circular no. 30/2010 regarding countries. the level of the reference interest rate valid for September 2010. According to the above The amendments are minor and mainly consist mentioned Circular, the reference interest rate of rephrasings and the obligation of valid for September 2010 was set at 6.25% per republishing of the Regulation. year. The Circular was published in the Official Gazette no. 618/01.09.2010 and may be The Regulation was published in the Official accessed here. Gazette no. 650/09.20.2010 and may be accessed here. NBR established the level of the interest rates paid for the minimum mandatory reserves for 24 August - 23 September 2010 NBR enacted Circular no. 31/2010 regarding the interest rates paid on minimum mandatory reserves for the period 24 August - 23 September 2010, described further below as follows:  1.73% per year for minimum mandatory reserves established in RON;  1.06% per year for minimum mandatory reserves established in Euro;  0.94% per year for minimum mandatory reserves established in U.S. dollars. The said Circular was published in the Official Gazette no. 646/16.09.2010 and may be accessed here.
  • Capital Markets Insurance Issuer: National Securities Issuer: Insurance Supervision Commission (“NSC”) Commission (“ISC”) NSC enacted the Decision no. ISC amended the legal framework regarding 1176/15.09.2010 regarding the drafting and the information that the insurers have to submission to NSC by the financial provide to their customers investment companies (FIC), entities registered with the NSC in section Collective ISC enacted Order no. 11/2010 supplementing Investment Undertakings with a diversified the Norms with respect to the information that the insurance companies and intermediaries investment policy of the consolidated annual have to provide to the customers, as well as financial statements, in accordance with the other elements that the insurance contract International Financial Reporting Standards have to comprise, implemented through the enacted by European Union within 8 months as Order of the president of the ISC no. 23/2009. of the end of the financial year. The above mentioned Decision may be accessed here. The above mentioned Order was published in the Official Gazette no. 651/20.09.2010 and may be accessed here. Issuer: Inter-ministerial Committee for Finance, Securities and Insurance (“ICFSI”) ICFSI establishes a state aid scheme designed to facilitate access to finance ICFSI enacted Decision no. 112/2010 approving the Norm concerning the establishment of a state aid scheme designed to facilitate access to financing in the current economic and financial crisis period, consisting of guarantees granted to SMEs and large enterprises. Both the above mentioned Decision and Norm were published in the Official Gazette no. 650/20.09.2010 and may be accessed here.
  • International regulatory updates
  • Banking Issuer: European Central Bank (“ECB”) ECB established the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility. On September 2, 2010, the Governing Council of ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility at the level of 1.00%, 1.75% and respectively 0.25%. For more information please access here. On September 21, 2010, ECB enacted the decision regarding the administration of European Financial Stability Facility loans to Member States whose currency is the euro. The decision was published in the Official Journal of the European Union no. L 253/58 dated September 28, 2010 and may be accessed here.
  • Domestic regulatory proposals / measures
  • This draft order was drawn up in compliance Banking with the provisions of the NBR Order no.9/16.07.2010 on the application of International Financial Reporting Standards Issuer: NBR / NSC (IFRSs) by credit institutions as basis of accounting and for the preparation of the Draft order for approval of the regulation of annual individual financial statements starting NBR and NSC regarding great exposures of with financial year 2012 in order to create a the credit institutions and investment general framework for banking sector in terms companies of keeping of accounts according to the treatments provided in the new accounting standards; preserving the current compulsory By issuing the new regulation of the NBR and Chart of accounts will facilitate the preparation NSC on large exposures of credit institutions of the financial reporting packages required by and investment firms it is considered the NBR in order to accomplish its duties regarding replacement of the current regulatory the prudential supervision. framework in the field, represented by the provisions of Articles 141, 142, 278 , 384 and The main provisions of the draft order refer art. 385 of Government Emergency Ordinance to the following issues: no.99/2006 on credit institutions and capital adequacy, approved with amendments by Law  The rules for accounting banks’ operations 227/2007, as amended and supplemented, in accordance with the treatments set out by IFRSs; under the provisions of art.420 of Government Emergency Government no. 99/2006 on credit  The provisions regarding the preparation, institutions and capital adequacy, approved approval, auditing and publication of the with amendments by Law 227/2007, as annual individual and consolidated amended and supplemented and of article 48 financial statements; of Law no. 312/2004 on the NBR, and the provisions of Article 1, Article 2 and Article 7  The chart of accounts and the content of para. (A), para. (3), para. (10) and para. (15) accounts; NSC Statute, approved by Government  The table of concordances between the Emergency Ordinance no. 25/2002, approved accounts from the chart of accounts with amendments by Law no.514/2002, as provided by the national accounting amended and supplemented by Law no. regulations transposing the European 297/2004 on the capital market, as amended directives and those provided by the draft and supplemented.For more details please order; access here.  The provisions relating to documents, forms, accounting books and rules for Issuer: NBR their preparation and use. Draft Order for approval of the Accounting regulations according to International For further details please access here. Financial Reporting Standards (IFRSs), applicable to credit institutions General objective and reasons for issuing the normative act: Implementation of IFRS by the banking sector is an objective set out in the Letter of Intent signed in Bucharest on the 5th of February 2010 and approved by the Decision of the International Monetary Fund’s Executive Board on the 19th of February 2010, whereby the NBR and the Ministry of Public Finance have to adopt the necessary legal framework so as to ensure the implementation of IFRSs starting with the beginning of 2012.
  • Issuer: NBR The main changes and supplementations to existing accounting rules (Order NBR no. Draft Order amending and supplementing 13/2008) brought by the draft order, refer to NBR’s Order no.13/2008 for approval of the following issues: accounting regulations according with european directives, applicable to credit institutions, non-bank financial institutions  Inserting of provisions relating to the and Deposit Guarantee Fund in the Banking annual financial statements’ users System categories and the qualitative characteristics of these reports; General objective and reasons for  Examples and additions to provisions on elaboration of the normative act: general accounting principles;  Supplementing the provisions on valuation The draft order is issued following the of assets, liabilities and equity when recommendation of the Superior Council of inventoried and on presenting these Accounting and Financial Reporting Council to elements in balance sheet; establish a unified framework in terms of  Supplementing the provisions on accounting rules and treatments applied by accounting errors correction; entities covered by the regulation and supervision of the NBR for similar operations  Change in accounting treatment for with those performed by the other economic government grants; operators. The draft order aims at  Expanding the current provisions of the implementing and tailoring of changes and accounting treatment for given and supplementations made by the Ministry of received trade discounts; Public Finance Order no.3055/2009 for  Specifying the factors which indicate approval of accounting regulations according impairment of tangible and intangible with European directives, to the extent they are assets; applicable to institutions regulated and supervised by the NBR.  Separate accounting for tangible assets and inventories purchased, in case of which the risks and benefits were transferred, but that are not yet received. For further details please access here.
  • Capital Markets Insurance Issuer: NSC Issuer: ISC Draft layout measures regarding the Draft order for implementation the delegated agents. The draft may be accessed accounting regulation as per International here. Financial Reporting Standards by the insurance, insurance-reinsurance and Draft order amending the Norms regarding the amount, withholding and payment of reinsurance companies. The draft may be capital gain tax obtained by individuals accessed here: through transfer of securities, approved by Order of Minister of Finance and Economy part I; and of the President of the NSC no. 3483/144/2008. The draft may be accessed part II; here. part III. Draft instruction regarding the implementation of International Financial Reporting Standards by the authorized entities, regulated and supervised by the NSC. The draft may be accessed here.
  • International regulatory proposals / measures
  • ECB published on 7 September 2010 the Banking second part of “Handbook on Securities Statistics” Issuer: Committee of European ECB released on 7 September 2010 the Banking Supervisors („CEBS”) second part of the “Handbook on Securities Statistics”. The aim of the said Handbook is to CEBS has published its comments on the assist national and international agencies in European Commission green paper on the production of relevant, coherent and corporate governance in financial internationally comparable securities statistics institutions and remuneration policies. For for use in monetary policy formulation and financial stability analysis. For more more information please access here. information please access here. CEBS has published its revised Guidelines on the management of concentration risk ECB published on 23 September, 2010 a under the supervisory review process and study on the trends of financial markets Position paper on the recognition of diversification benefits under Pillar 2. For ECB has published on 23 September, 2010 a more information please access here. study that reflects all major financial market developments in the second quarter of 2010 Issuer: ECB compared to same period of last year. ECB published statistic information A summary of this report may be accessed regarding the evolution of interest rates in here. the Euro zone. On September 1, 2010, ECB made public available the statistical data of an Issuer: Federal Reserve Board investigation operated by International Monetary Fund concerning interest rates On September 30, 2010 the Federal Reserve across Euro zone. For more information please Board announced that it will implement access here. changes to its Payment System Risk policy on March 24, 2011. The press release may be accessed here. ECB published on 6 September 2010 the document on the payment system and the role of the Eurosystem ECB has published on 6 September 2010 a document entitled “The payment system – payments, securities and derivatives, and the role of the Eurosystem”. The said document provides comprehensive insight into the handling of financial transactions and the functioning of the related financial market infrastructure – a core component of the financial system. It also explains the role and policies of the Eurosystem – which comprises the ECB and the 16 national central banks of the euro area – in this field. For more information please access here.
  • Issuer: Committee of European Capital Markets Insurance and Occupational Pensions Supervisors („CEIOPS”) / Issuer: Committee of European CESR / CEBS / European Parliament Securities Regulators (“CESR“) CESR, CEIOPS and CEBS welcome the CESR updates the list of measures adopted decision of the European Parliament to by the Member States regarding short- support the reform of financial system selling. For more information please access supervision here. CESR, CEIOPS and CEBS welcome the CESR published on 6 September 2010 its decision of the European Parliament to create feedback statement on the Investor an institutional change that will allow the Protection and Intermediaries part of the formation of a joint European financial market, Markets in Financial Instruments Directive. more robust and adapted to market needs. The For more information please access here. institutional transformation will consist in the change of the three committees into European CESR published on September 13, 2010 two authorities by January 2011. feedback statements in the field of Credit Rating Agencies: The declaration of the three committees may be accessed here .  Feedback statement on CESR consultation on enforcement practices; The summary of the decision may be accessed here.  Feedback statement on CESR consultation on common standards for Issuer: European Commission assessment of compliance of credit rating methodologies. On 15 September 2010, the European Commission drew into attention a working For more details please access here and here. paper regarding the impact assessment of a proposal for a draft regulation on OTC CESR published on 23 September 2010 an derivatives, central counterparties and annual report regarding the international trade repositories. standards on financial reporting The draft may be accessed here. CESR published its first annual report regarding the international standards on financial reporting. The document shows that, at European level, there was a better coordination of the authorities ensuring compliance with financial reporting standards. Furthermore, the report contains a list of issues that require greater attention from listed companies in order to improve the information of the investors. The above mentioned report may be accessed here.
  • Commercial Law Private pensions Issuer: International Chamber of Issuer: CEIOPS Commerce CEIOPS has released on September 28, International Chamber of Commerce 2010 for public consultation its draft launched on 16 September 2010 the latest methodology for equivalence assessments revision of its internationally-recognized under Solvency II. The draft may be accessed trade terms Incoterms® 2010. The rules will here. come into effect on 1 January 2011. For more information please access here.
  • Reff & Associates is the correspondent law firm of Deloitte Romania, fully integrated with the Deloitte multi-disciplinary advisory practice and affiliated to a network of law firms and legal departments working with Deloitte all over the world. Deloitte’s correspondent legal practice provides assistance to clients in Romania on various matters pertaining to mergers and acquisitions, corporate and commercial law, finance, banking and capital markets, real estate, project finance, employment, competition, fiscal and commercial litigation, and intellectual property. In the financial services sector, Reff & Associates provides the full range of services to banks and financial institutions, including: - Finance deals: transaction support in bilateral and syndicated loans, loan workouts, securitisation, loan transfers and assists in drafting and negotiating the transaction documentation (loan agreements, security and other ancillary documentation). - M&A transactions in the financial services sector: advice on the structure 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 financial products, representation in front of the regulators (National Bank of Romania, Insurance Supervisory Commission, Securities Commission etc.). For more details on our services and credentials in the FSI sector, please click here Subscribe to the Financial Services Industry Monthly Bulletin. Contacts Andrei Burz Pinzaru Partner + 40 21 207 52 05 aburzpinzaru@deloittece.com Simina Mut Manager + 40 21 207 52 69 smut@deloittece.com Leontin Trifa Manager + 40 21 207 53 13 ltrifa@deloittece.com
  • Financial Services Industry Contacts in Deloitte Romania: George Mucibabici Chairman tel: + 40 21 207 52 55 e-mail: gmucibabici@deloittece.com Audit Ahmed Hassan Partner tel: + 40 21 207 52 60 e-mail: ahhassan@deloittece.com Enterprise Risk Services Gary Bauer Director tel: + 40 21 207 52 19 e-mail: gbauer@deloittece.com Financial Advisory Hein van Dam Partner in Charge tel: + 40 21 207 52 30 e-mail: hvandam@deloittece.com Tax Daniel Petre Manager tel: + 40 21 207 54 44 e-mail: dpetre@deloittece.com Legal Andrei Burz-Pinzaru Partner, Reff&Associates correspondent law firm of Deloitte Romania tel: + 40 21 207 52 05 e-mail: aburzpinzaru@deloittece.com Consulting Razvan Horobeanu Manager tel: + 40 21 207 53 57 e-mail: rhorobeanu@deloittece.com Actuarial & Insurance Solutions Slawomir Latusek Consultant tel: + 48 (22) 511 04 54 e-mail: slatusek@deloittece.com
  • Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/ro/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 140 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. Deloitte's approximately 170 000 professionals are committed to becoming the standard of excellence. This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, Deloitte Global Services Limited, Deloitte Global Services Holdings Limited, the Deloitte Touche Tohmatsu Verein, any of their member firms, or any of the foregoing’s affiliates (collectively the “Deloitte Network”) are, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your finances or your business. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this publication. © 2010 Deloitte Romania