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A step closer towards the statute of emerging market: Changes in the Capital Market Law

The Capital Market Law no. 297/2004 (“Law 297/2004”) has been recently modified by the Government Emergency Ordinance no. 90 of 23 December 2014 (“EGO 90/2014″). As part of the efforts to promote the Romanian capital markets from a frontier market status to the emerging market status, EGO 90/2014 aims to eliminate certain major legislative barriers identified in the project “Eight systemically important barriers impeding the creation of the modern capital markets in Romania”. Key aspects subject to change include: shareholders’ rights, corporate governance, transparency, the regime of public offers of shares and bonds.

New and more flexible means of Proxy Voting: the new concept of a “general power of attorney”

As a premiere in the Romanian legislation, shareholders now have the possibility to grant representation powers for the general meeting of shareholders (“GMS”) through a “general power of attorney”, subject to certain conditions (until now, proxy voting was allowed only on the basis of a “special power of attorney” granted for a specific GMS and containing express voting instructions).

Therefore, a shareholder may now grant a mandate valid for a period not exceeding 3 years, allowing its representative to vote on any matter discussed in the GMS of one or several companies identified in the mandate, including with respect to acts of disposal, provided that the mandate is granted by the shareholder, as a customer, to an intermediary or to a lawyer.

The empowered person cannot be substituted by another person. If the empowered person is a legal person, such may exercise the mandate received through any person part of the administrative or management body or its employees.

New provisions allow the power of attorney to be submitted prior to the GMS in certified copy rather than in original, as it was required prior to EGO 90/2014′ s entry into force.

The shareholders have the obligation to submit to the Central Depository their identification documents.

Simplified voting by correspondence

Companies are required to prepare, before the GMS, procedures allowing the shareholders to vote by correspondence.

Also, the shareholder who initially voted by correspondence is now permitted to exercise its vote personally or by proxy at the GMS (the correspondence vote being annulled).

Lower quorum and majority requirements for adopting decisions regarding share capital increases

GMS decisions regarding the removal of the preference right related to a cash share capital increase or decisions regarding in kind share capital increase can be adopted more easily with the new quorum requirement of 3/4 of the share capital (as opposed to 3/4 of the number of shareholders) and the majority requirement of 2/3 of the voting rights (lowered from 75%, under the previous law).

Payment of dividends

The new provisions introduce a simplified way for payment of dividends and other amounts, through the Central Depository which is now expressly granted the power to distribute dividends. Also, the time limit for payment of the dividends if the GMS does not set a  deadline in this respect is reduced (from 60 to 30 days).

Public offers:

Removal of the obligation to prepare an announcement for the public sale offer

The obligation to prepare an announcement for a public sale offer is removed and the possibility of choosing between publishing the prospectus/the offering document in electronic format either on the website of the offeror or on the website of the intermediary of the offer is introduced.

Rules regarding advertisements

New provisions regarding advertisements also include references to offers of securities for which the publication of the prospectus is not mandatory. Thus, the material information provided by an issuer or an offeror and addressed to qualified investors or special categories of investors, including information disclosed in the context of meetings relating to offers of securities, must be disclosed to all qualified investors or special categories of investors to whom the offer is exclusively addressed.


EGO 90/2014 introduces changes aiming to align the provisions of the law with those of the Prospectus Directive. For example, the changes provide an exception to the obligation to prepare a summary prospectus if the prospectus relates to the admission to trading on a regulated market of securities other than equity securities, with a face value of at least the equivalent in RON of EUR 100,000, subject to certain exceptions.

New holding thresholds for market operators

EGO 90/2014 modifies the threshold for holding shares issued by market operators from 5% to a maximum of 20% of the total voting rights.

Also, it provides the determination of quorum and majority requirements for the extraordinary GMS in accordance with Company Law no. 31/1990 which includes lower requirements than those currently included in the articles of association of the market operators.

Entry into force

EGO 90/2014 was published in the Official Gazette no. 964/30.12.2014 and enters into force 10 days after its publication.

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