Romanian Proprietatea Fund GM Says OTC Listing Has Its Short-Term Advantages

Trading the shares of investment fund Fondul Proprietatea on the Romanian Over-The-Counter (ROTC) alternative trading system created by the Brokers’ Association has obvious advantages, at least on short-term, the fund’s general manager Daniela Lulache said Tuesday.

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"There will be a significant higher transparency at settling the shares price. At least on short term, the advantages of using this trading platform seem to be evident," Lulache told a seminar organized by MEDIAFAX and Fondul Proprietatea.

On the other hand, she said the fund's selected manager, U.S. Franklin Templeton, undertook to list Proprietatea's shares on the Bucharest Stock Exchange as quick as possible.

Lulache said, however, the ROTC alternative trading platform presents some risks, as it is not functioning as a regulated market.

The fund's shareholders must adopt a decision regarding all the elements linked to the ROTC, as trading Proprietatea's shares on this platform will affect their personal wealth, Lulache added.

End-October, Romania's securities commission CNVM approved the setup of systems for trading unlisted shares or over-the-counter transactions, so that the Brokers Association might launch an alternative system to trade the shares of Proprietatea fund.

Thus, CNVM confirmed the possibility of making transactions outside a regulated market or through an alternative system trading financial instruments that are not admitted for trading on a local regulated market.

The companies brokering the transactions outside the bourse system must respect the same rules in relation with the investors as the ones observed in making transactions on the stock exchange's regulated markets and the alternative trading systems.

Early-September, the Brokers Association approved the setup of an alternative bourse trading system, especially for Proprietatea fund's shares.

Fondul Proprietatea was set up in December 2005 to compensate Romanians whose properties were confiscated during the communist regime.

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