CNVM's new nightmare

Nearly eight months after enactment, the new capital market legislation remains more confusing than beneficial. The rush to endorse the legislation in the first place and the delay in publishing clear enforcement guidelines have added yet another confusing situation to the fierce dispute between the majority and minority shareholders lately.
The new legislation, enacted by an ordinance in March 2002 and by a law in June 2002 introduced a new concept, in accordance with the European standards in this field, the registration date. That is the calendar date, which helps identifying those shareholders targeted by the decisions of the general meeting of the shareholders, as explained by the law. The registration date has to be set after the general meeting so that investors could knowingly buy shares.
This concept was introduced in order to provide transparency and avoid those speculations caused by the traditional reference date, that is the one when the shareholders allowed to participate in a general meeting are specified.
Prior to the enactment of this law, the two concepts were practically the same on the Romanian market, in the sense that those who were registered on the reference date were also covered by the decisions made during the general meeting of the shareholders. This slip-up has helped investors who had inside tips gain a great deal of money over the last few years and has created extremely controversial situations when the propositions in the meeting notice were not approved.
The lack of enforcement guidelines and the habit to relate to the reference date have made companies disregard the registration date so far. Actually, the National Securities Commission has not requested companies to mention this date in the general meeting notices, either, with commission officials saying this cannot be done unless enforcement guidelines are published.
As usual in the last few months, things are moving faster than CNVM does, which has to issue the enforcement guidelines. Furthermore, the Commission has not cleared things up yet, just as it happened in the case of the minority-majority shareholders dispute.