June 2010
Romanian Government amends the current
regulatory framework regarding the credit
facilities for consumers
The Romanian Government enacted the
Emergency Ordinance no. 520/2010 regarding
the credit facilities for consumers („GEO
520/2010”). Further to entry into force of the
GEO 520/2010, provisions of Law no. 289/2004
regarding the legal regime of the credit facilities
for consumers - natural persons, shall be
repealed.
It is worth mentioning that the protection
granted to the consumers through the provisions
of GEO 520/2010 shall be also maintained in
case that the law applicable to the agreement is
the law of a non-member state, if the credit
facility is closely related to the territory of a
member state.
The most significant amendments brought
through the provisions of GEO 520/2010 are
presented below:
The withdrawal right of the consumer
In accordance with the provisions of GEO
520/2010, the consumer may withdraw from the
credit facility, without giving any reason, within
14 calendar days either as of the conclusion date
of the credit agreement, or as of the day when
the consumer is notified with respect to the
amendments that the creditor envisages to bring
to the existing credit agreement. If the consumer
exercises his/her right of withdrawal, he/she will
pay to the creditor the principal or the amounts
drawn down and the related accrued interest.
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:
the increase of the commissions, taxes,
costs, bank charges or other costs related to
the credit agreement is prohibited, except
for those imposed by legislation (i.e. file
analysis fee, administration credit fee or
current account administration fee, early
repayment fee, insurance costs, penalties,
or single commission for services provided
upon the consumer demand);
in relation to the amounts drawn down, it
is prohibited to charge a commission for the
disbursement of the respective amounts;
in case that the facility is not granted, it is
forbidden to charge a file analysis fee.
Early repayment fee
According to the provisions of GEO 520/2010,
the early repayment fee in relation to credit
facilities having a variable interest rate is
prohibited. In case of credit facilities having a
fixed interest rate, the early repayment fee may
not exceed 1 %, if the period of time between
the early repayment date and the maturity date
of the credit agreement exceeds one year, and it
may not exceed 0,5 % in case the mentioned
period of time does not exceed one year.
The regulations regarding the early repayment
shall be applicable to the leasing agreements
which are subject to the provisions of GEO
520/2010, further to the expiry of a12 months
period as of their conclusion.
Limitation of default interest rate amount
In accordance with the provisions of GEO
520/2010, the default interest rate in case of late
payments cannot be 2 percentage points higher
than the interest rate to be paid in lack of such
delay, in case the consumer or his/her spouse is
in one of the following situations: unemployed,
extended sick leave, divorced, death, decreased
of the salary by at least 15% of its value.
Provisions concerning the amendment of
credit facilities
In accordance with GEO 520/2010, there are
prohibited the contractual clauses giving to the
creditor the right to unilaterally amend the
contractual terms without the execution of an
additional act agreed by the consumer.
In case of amendments requested by the
applicable legislation, the lack of execution
of the additional acts by the consumer shall
be deemed an implicit approval. In this
case, the inclusion in the additional acts of
provisions different to those requested by
the legislation are null by law;
In case of amendment of contractual terms
regarding the costs, the creditor should
send to the consumers a notification with at
least 30 days prior to their application. The
consumer has to notify its option within 15
days as of receipt of the notification. The
lack of any answer from the consumer
cannot be considered implicit acceptance of
the new conditions and the agreement will
remain unchanged. In case that the
consumer does not accept the new
conditions, the creditor does not have the
right to sanction the consumer or to
accelerate the credit;
In case of the consumer's impossibility to
accept the amendment of the contractual
terms regarding the increase of interest, the
creditor does not have the right to
unilaterally terminate the credit facility
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.
Assignment of the creditor's rights under
the credit agreement
In the event that the creditor assigns its right
under the credit agreement or the credit
agreement itself, the assignor is obliged to notify
the assignment to the consumer within 10 days
as of the execution of the assignment agreement
by registered mail with confirmation receipt.
The assignee is requested to have a contact
person in Romania for the purpose of solving the
potential disputes and to be kept liable in front
of the public authorities.
Linked credit agreements
The GEO 520/2010 prohibits the execution of
credit agreements having for object the
acquisition of goods / services in the trading
spaces of such goods and / or services, even in
case such credit agreements would be executed
through the dealers of the goods and / or
services.
However, linked credit agreements are excluded
from the application of this interdiction. The
linked credit agreement means a credit
agreement where the credit serves exclusively to
finance an agreement for the supply of specific
goods or the provision of a specific service, and
it is characterized by the fact that the two
agreements, facility and sale-purchase
agreements, form a commercial unit from an
objective point of view.
GEO 520/2010 mentions that, where the goods
or services covered by a linked credit agreement
are not supplied, or are supplied only in part, or
are not in conformity with the contract for the
supply thereof, the consumer shall have the right
to pursue remedies against the creditor if the
consumer has pursued his remedies against the
supplier but has failed to obtain the satisfaction
to which he/she is entitled. In this case, the
creditor is jointly liable with the supplier with
respect to any remedies the consumer may
pursue against the supplier.
The competent authority for the application
of provisions of GEO 520/2010
For the application of the provisions of the GEO
520/2010, the consumers may refer to National
Authority for Consumer Protection. In exercising
its attributions, National Authority for Consumer
Protection is entitled to apply fines in amount
between 10,000 lei to 100,000 Lei. In addition,
the National Authority for Consumer Protection
may also order: (i) immediately compliance of
the infringed contractual terms, (ii)
reimbursement of the amounts disbursed
without legal basis, (iii) bringing the contract in
accordance with legal provisions and (iv)
reparation of the deficiencies ascertained under
the protocol.
GEO 520/2010 was published in the Official
Gazette no. 389/11.06.2010 and will entry into
force within 10 days as of the publication date,
respectively on June 21, 2010. Within 90 days as
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.
NBR established the level of the reference
interest rate for June 2010
NBR issued Circular no. 18/2010 regarding the
level of the reference interest rate valid for June
2010. According to the above mentioned
Circular, the interest reference rate of NBR valid
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.
NBR amended the interest rates payable on
minimum mandatory reserves
NBR issued Circular no. 19/2010 regarding the
interest rates payable on minimum mandatory
reserves. The above mentioned Circular sets
forth the interest rates payable on minimum
mandatory reserves during May 24 - June 23,
2010 as follows:
2.02% per year for minimum mandatory
reserves set up in RON;
1.07% per year for minimum mandatory
reserves set up in Euro;
0.99% per year for minimum mandatory
reserves set up in U.S. dollars.
The said Circular was published in the Official
Gazette no. 389/11.06.2010 and may be
accessed here.
MPF amended the regulatory framework
regarding the implementation of “First house”
programme
MPF issued Order no. 1.814/2010 for the
amendment of MPF’s Order no. 2.225/2009. The
said order amends among others the template
convention for the guarantee of housing
construction and was published in the Official
Gazette no. 407/18.06.2010.
ISC amended the regulatory framework
regarding the activity of entities organizing
unitary professional trainings for insurance
personnel
ISC enacted Order no. 6/2010 for the
implementation of the Norms regarding the
activity of entities organizing unitary professional
training courses for insurance personnel. The
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
ISC enacted Order no. 7/2010 for the
implementation of the Norms regarding the
professional qualification and continuous
training of the persons active in the distribution
of insurance products. The above mentioned
Order was published in the Official Gazette no.
417/22.06.2010 and may be accessed here.
PPSSC set the regulatory framework regarding
the profitability rates of the privately managed
pension funds
PPSSC adopted Decision no. 9/2010 for
approving Norm no. 7/2010 regarding the
profitability rates of the privately managed
pension funds. The above mentioned Decision
was published in the Official Gazette no.
369/04.06.2010 and may be accessed here.
NSC amended the regulatory framework
regarding the certification of the professional
training institutions, operators and specialists
within capital markets
NSC issued Order no. 36/2010 for the approval
of Regulation no. 12/2010 regarding the
certification of the professional training
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.
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.
NBR published a proposal of Regulation on
temporary holding of shares during an assistance
operation or financial restructuring of an entity
outside the financial sector.
For more information please access here.
Proposal of Order regarding the implementation
of the International Financial Reporting
Standards by credit institutions as a basis for
accounting and preparation of individual annual
financial statements as of the financial year 2012
General objective and reasons for elaboration of
the normative act
Implementation of International Financial
Reporting Standards in the banking sector is an
objective set out both in the Report on the
Observance of Standards and Codes–
Accounting and Auditing – ROSC issued by the
World Bank in December 2008 and in the FSAP
program (Financial Sector Assessment Program)
issued by the International Monetary Fund and
the World Bank in May 2009, as well as 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 National Bank of Romania and the Ministry
of Public Finance commit themselves to adopt
towards the end of the program’s period the
necessary legal framework so as to achieve the
comprehensive implementation of IFRSs starting
with the beginning of 2012.
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
adopted following the procedure set out in
Article 6(2) of the Regulation (EC) No.
1606/2002 of the European Parliament and
of the Council of 19 July 2002 on the
application of international accounting
standards;
starting with January 1, 2012, credit
institutions will organize and run the
accounting in accordance with the IFRS
provisions, the Accounting Law’s provisions
and other applicable legal provisions, as
well as with the regulations issued by the
National Bank of Romania for the
implementation of this order.
The full text of the proposal may be accessed
here.
Proposal of Order amending NBR’s Order no.
13/2008 for the approval of Accounting
Regulations in accordance with European
directives applicable to credit institutions, non-
banking financial institutions and to the Fund for
deposit guarantee in the banking system
General objective and reasons for elaboration of
the normative act
The draft order is issued following the
recommendation of the Superior Council of
Accounting and Financial Reporting Council to
adopt a unified framework in terms of
accounting rules and treatments applied by
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.
The main changes and additions to existing
accounting rules (Order NBR no. 13/2008) by the
draft order, refer to the following issues
inserting of provisions relating to the annual
financial statements’ users categories and
the qualitative characteristics of these
reports;
examples and additions to provisions on
general accounting principles;
supplementing the provisions on valuation
of assets, liabilities and equity when
inventoried and on presenting these
elements in balance sheet;
supplementing the provisions on
accounting errors correction;
change in accounting treatment for
government grants;
expanding the current provisions of the
accounting treatment for given and
received trade discounts;
specifying the factors which indicate
impairment of tangible and intangible
assets;
separate accounting for tangible assets and
inventories purchased, in case of which the
risks and benefits were transferred, but that
are not yet received.
The full text of the proposal can be accessed
here.
Proposal of Regulation amending Regulation no.
6/2008 regarding the changes in the situation of
the credit institution, Romanian legal entities
and the Romanian branches of the third-country
credit institutions
According to the provisions of the Article 108 of
the Government Emergency Ordinance no.
99/2006 on Credit Institutions and Capital
Adequacy, subsequently amended and
supplemented, each of the persons appointed to
perform the administration and/or management
duties in a credit institution, as well as any
person appointed to ensure middle management
functions relative to the activities of a significant
importance, should be approved by the National
Bank of Romania before starting the fulfillment
of their tasks, according to the regulations
issued.
The draft regulation is aiming to amend the
relevant provisions of the Regulation no. 6/2008
in order to expressly cover all cases when, due to
the changes in the credit institution’s internal
organizational structure or lines of
responsibilities, new persons are appointed to
fulfill the referring tasks, or the persons already
approved by the National Bank of Romania are
assuming new responsibilities. In all of these
cases, according to the law, the National Bank of
Romania’s prior approval is required.
The full text of the proposal can be accessed
here.
LMA amended coordinating committee letters
On 17 June 2010, LMA published amended
versions of its coordinating committee letters.
The letters govern the appointment of a
coordinating lender and coordinating committee
of lenders in connection with the refinancing of
a borrower's bank loans. The above mentioned
letters may be accessed by LMA members here.
LMA published new netting agreements,
termination and transfer agreements
On 30 June 2010, LMA published the following
new documents: Multilateral Netting
Agreement; Bilateral Netting Agreement;
Bilateral Termination and Transfer Agreement;
Termination Agreement.
LMA also published updated versions of the
following documents: Multilateral Termination &
Transfer Agreement (Novation); Secondary
Trading Documentation User Guide. More details
may be accessed by LMA members here.
EPCEMA recommends legislation on cross-
border insolvency or "crisis management" for
banks
On 28 June 2010, EPCEMA passed a request to
the European Commission to draft a legislative
framework creating a common insolvency
regime for financial institutions operating across
borders within the European Union. The motion
follows a consultation process that began on 20
October 2009 on crisis management in the
banking sector. For more details, please access
here.
CEBS revised consultation papers on settlement
of OTC derivatives
On 23 June 2010, CEBS published a revised
consultation paper on its draft guidelines on the
management of operational risk in market-
related activities. CEBS originally published the
guidelines in December 2009 but, following
feedback, has now revised them and launched a
second consultation. The consultation period
ends on 23 July 2010.
The above mentioned guidelines can be accessed
here.
CEBS published on June 14, 2010 the
Implementation Guidelines on capital
instruments referred to in Article 57 (a) of
Directive 2006/48/EC recast.
The above mentioned Implementation
Guidelines can be accessed here.
CEBS published on June 15, 2010 its Annual
Report for 2009.
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
here.
CEBS published on June 11, 2010 its report on
national implementation of CEBS’s high-level
principles for remuneration policies.
The said report may be accessed here.
CEBS published on June 30, 2010 two follow-up
reports setting out the outcome of its efforts in
assessing banks’ disclosures.
For more information please access here.
CEIOPS released on June 29, 2010 the half-
yearly report on the financial conditions and
stability of the insurance and occupational
pension fund sector in the EU/EEA covering
developments in the insurance, reinsurance and
occupational pension fund markets for recent
years.
For more information about the press release
please access here.
EC initiated on June 14, 2010 a consultation on
the options to be be considered for a
forthcoming legislative proposal dealing with
potential risks from short selling.
For further information please access here.
EC initiated on June 14, 2010 a public
consultation on derivatives and market
infrastructures.
The mentioned consultation may be accessed
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.
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