Draft law caps investor stakes in SIFs at 1%

Financial investment companies’ portfolios will no longer be able to be managed by their respective Boards of Directors but will have to be handed over to specialised investment management companies instead. This is what an amendment to the consolidated capital market law, adopted by the Senate, states. The Senators have also deemed it necessary to introduce through the draft law a 1% cap on the stake any investor may hold in a SIF. The SIF shares rose by 8% on the Bucharest Stock exchange yesterday, exceeding even the most bullish expectations of brokers. The consolidated law draft has been fully approved by the Senate and is to be debated by deputies.

“The amendment on the maximum stake was introduced after lengthy discussions, which also considered the views of the capital market representatives,” Senator Viorel Pana, one of the architects of the amendment to introduce the maximum stake condition, told Ziarul Financiar.

The draft law promoted by the National Securities Commission (CNVM) did not provide for any cap on the interest any shareholder may hold in a SIF, with CNVM representatives saying they wanted to give shareholders the freedom to modify or even eliminate the threshold set in the SIF statute, currently standing at 0.1%. “This is indeed a provision that sets limitations, but it is the conclusion we reached based on the talks we had,” Pana explained.

The provisions about the stake threshold are nothing new, as the same article was also introduced into a special law on the reorganisation of SIFs, which was later dropped. The provisions were also included in an older draft of the law debated by the CNVM, which was similarly abandoned. The number of votes associated with a specific stake held by an investor is not supposed to increase as much as the number of shares.
vlad.nicolaescu@zf.ro