Glosar

Financial Surveillance Authority

Financial Investment Services Company authorized by the National Securities Commission;

The main and the ancillary services that may be provided by S.S.I.F. under the law and the F.S.A. regulations, as a broker authorized by the F.S.A.

Represents the natural person who eventually owns or controls the client and/or the natural person on whose name or behalf a transaction or an operation is performed, directly or indirectly. 
The notion of beneficial ownership shall include at least: 

a) with respect to companies: the natural person or persons eventually owning or controlling a legal entity by owning, directly or indirectly, the entire block of shares or a sufficient number of the shares or voting rights to ensure their control, including bearer shares, where the owned or controlled legal entity is not a commercial company whose shares are traded on a regulated market and which is subject to publicity requirements in agreement with those regulated by European law or with internationally set standards. Such criterion is deemed to be met upon an ownership of at least 25% of the shares plus one share; the natural person or persons who exercise control in any other way over the administrative or management bodies of a legal person; 

b) with respect to legal entities other than those provided under letter a) or to other entities or legal arrangements that manage and distribute funds:  the natural person who is the beneficiary of at least 25% of the assets of a legal person or entity or legal arrangement, provided that the future beneficiaries have already been identified;  the group of persons in whose main interest a legal person or entity or legal arrangement is created or operates, provided that the natural persons that are the beneficiaries of the legal person or legal entity have not been identified yet; the natural person or persons who exercise control over at least 25% of the assets belonging to a legal person or entity or legal arrangement. 

Refers to this Contract, together with its annexes and subsequent addenda, as well as to other terms and conditions agreed between the CLIENT and the BROKER in writing in respect of this contract; 

The account opened with the Broker on behalf of the Client, evidencing the holdings and the operations with financial instruments and cash operations thereof; 

a) shares issued by commercial companies and other equivalent securities, negotiated on the capital market; 

b) bonds and other debt securities, including treasury bills with a maturity longer than 12 months, negotiable on the capital market; 

c) any other currently negotiated titles conferring the right of purchase with respect to those securities by subscription or exchange, resulting in a cash settlement, except for payment instruments; 

The instruction to purchase or sell a certain financial instrument; 

Represents all the instructions received by SSIF from the CLIENT, directly or through its attorney in fact; 

Are the instruments described under art. 7 item 141 of the Govt. Emergency Ordinance no. 99/2006, approved by law No. 227/2007.

an institution that provides services related to the depositing, registration, clearing and settlement of the transactions in financial instruments on the spot market, as well as any operations in respect thereof, as defined by Law no. 297/2004 regarding capital market, as subsequently amended and supplemented;

Is an institution that provides participant risk management and also keeps a record of and provides daily clearing services, marking to market, settlement of the transactions in derivative financial instruments and liquidation of the open positions upon maturity. 

Represents the execution by the broker, of transactions with financial instruments on the clients account and in the name of the intermediary and/or client, on a regulated  market, or outside a regulated market, or on an alternative trading system, in Romania or abroad.

a) entities authorized to operate on the financial markets, such as credit institutions, financial investment service companies, other authorized and regulated financial institutions, insurance companies, undertakings for collective investments in transferable securities, investment management companies, pension funds, as well as other entities that are not authorized or regulated and whose sole object of activity is the investment in securities; 

b) authorities of the central and local public administration, central credit institutions, international and regional bodies such as: the International Monetary Fund, the European Central Bank, the European Investment Bank or other similar bodies; 

c) legal entities that meet two of the following three criteria: an average number of employees higher than 250 during a financial year;  total assets amounting to more than the equivalent of Euro 43,000,000; a net annual turnover higher than the equivalent of Euro 50,000,000; 

d) certain natural persons, subject to mutual recognition. F.S.A. may decide to authorize natural persons residing in Romania, who expressly request to be considered qualified investors, if such persons fulfill at least two of the following criteria:  the investor has performed transactions of a significant size on a regulated market with an average frequency of at least 10 transactions a quarter for the past four calendar quarters;  the value of the securities portfolio of an investor exceeds Euro 500,000;  the investor worked or has been working in the financial sector for at least one year and holds a position that requires knowledge about securities investments; 

e) certain small and medium sized companies, subject to mutual recognition. F.S.A. may decide to authorize small and medium sized companies residing in Romania, which expressly request to be considered qualified investors. For the purposes of this law, small and medium sized companies are those companies which, according to the last reported financial statements, do not fulfill two of the three criteria provided under letter c); 

Professional client is a client who possesses the experience, knowledge and expertise to make its own investment decisions and properly assess the risks that it incurs. In order to be considered a professional client, the client must comply with the following criteria: 

The following should all be regarded as professionals in all investment services and activities and financial instruments: 

a) Entities which are required to be authorized or regulated to operate in the financial markets. The list below should be understood as including all authorized entities carrying out the characteristic activities of the entities mentioned: entities authorized by a Member State under a Directive, entities authorized or regulated by a Member State without reference to a Directive, and entities authorized or regulated by a non-Member State:

•     credit institutions; 
•     investment firms; 
•     other authorized or regulated financial institutions; 
•     Insurance companies; 
•     collective investment schemes and management companies of such schemes; 
•     pension funds and management companies of such funds; 
•     commodity and commodity derivatives dealers; 
•     other institutional investors; 

b) Large undertakings meeting two of the following size requirements on a company basis:

•     balance sheet total: EUR 20000000 
•     net turnover: EUR 40000000 
•     own funds: EUR 2000000. 

c) National and regional governments, including public bodies that manage public debt at national or regional level Central Banks, international and supranational institutions such as the World Bank, the IMF, the ECB, the EIB and other similar international organizations.

d) Other institutional investors whose main activity is to invest in financial instruments, including entities dedicated to the securitization of assets or other financing transactions.

a) investment firms, credit institutions, insurance companies; 

b) UCITS and their management companies; 

c) pension funds and their management companies; 

d) other financial institutions authorized and regulated according to EU legislation or to national laws of a Member State; 

e) natural or legal persons whose main activity consists of trading in commodities or commodities derivatives on the own account; 

f) traders; 

g) national governments and their corresponding offices including public bodies that deal with public debt at national level,; 

h) central banks and supranational organizations. 

The situation in which two or several natural persons or legal entities are related by means of: 

• a) participating interest, which means a direct or indirect ownership of 20% or more of the voting rights or share capital of a commercial company; 
• b) control, which means the relationship between the parent company and a subsidiary thereof or a similar relationship between any natural or legal person and a commercial company; any subsidiary of a subsidiary shall be deemed to be a subsidiary of the parent company, which is in fact the entity controlling such subsidiaries; a close connection is also deemed to exist when two or several natural or legal persons are permanently tied to one and the same person through a control relationship. 

• a) persons who control or are controlled by an issuer or are under common control; 
• b) persons who participate, directly or indirectly, in the conclusion of certain agreements with a view to obtaining or exercising voting rights in common, if the shares subject matter of the agreement may confer a controlling position; 
• c) natural persons within the issuer company, assigned with management or control functions; 
• d) spouses, relatives and allied relatives up to the second degree of the natural persons mentioned under letters a) – c); 

• e) persons who may appoint most of the board members within an issuer. 

Two or several persons, bound by an express or tacit agreement to develop a common policy in relation to an issuer. Unless otherwise proved, the following persons are presumed to act in a concerted manner: 

a) the involved persons; 

b) the parent company along with its subsidiaries, as well as any of the subsidiaries of the same parent company by themselves; 

c) a commercial company with its board of director members and the involved persons, as well as these persons by themselves; 

d) a commercial company with its pension funds and with the fund managing company. 

A legal entity, shareholder or associate of a commercial company, being in one of the following situations: 

a) holding, directly or indirectly, a majority of the voting rights therein; 

b) being able to appoint or dismiss most members of the managing or control bodies or other persons with a decisional power in the respective company; 

c) being able to exercise a significant influence over the entity in which it is a shareholder or associate, based on certain clauses included in the agreements concluded with the respective entity or based on certain provisions included in the deed of incorporation of such entity; 

d) being a shareholder or associate of an entity and having appointed by itself, through the exercise of its voting rights, most members of the managing or control bodies or most subsidiary managers, for the past two financial years, or controlling by itself, based on an agreement concluded with the other shareholders or associates, most of the voting rights; 

Are natural persons who perform or have performed important public functions, the direct members of their families, as well as the people publicly known as their associates, being close to the natural persons who perform important public functions. 

The natural persons performing important public functions are: 

a) heads of state, heads of government, members of parliaments, European commissioners, government members, presidential advisors, state counselors, secretaries of state; 

b) constitutional court members, members of the supreme courts or of other high courts whose decisions may only be appealed by extraordinary remedies at law; 

c) members of the court of auditors or assimilated bodies, members of the board of directors of central banks; 

d) ambassadors, business representatives, high ranking officers of the armed forces; 

e) heads of public institutions and authorities; 

f) members of the boards of directors and of the boards of supervisors and people holding leading positions within autonomous state owned companies, majority state-owned companies and national companies. 

None of the above-mentioned categories includes people holding intermediary or lower positions. The above-mentioned categories include, as the case may be, the positions held at community or international level. 

The direct members belonging to the family of the politically exposed persons are: 

a) spouses; 

b) children and their spouses; 

c) parents. 

The people that are publicly known as the associates or trusted people of the natural persons who perform important public functions are the natural persons who are known to: 

a) hold or exercise a significant influence, together with one of the above-mentioned persons, over a legal person or entity or legal arrangement, or are in a close business relationship with such persons; 

b) hold or exercise a significant influence over a legal person or entity or legal arrangement set up to the benefit of one of the above-mentioned persons. 

The person holding management positions within the issuer and the persons with whom they are in a close relationship, which: 

a) is a member of the issuer’s administrative, managing and control bodies; 

b) is a senior executive without being a member of the bodies mentioned under letter a), being granted both regular access to privileged information concerning the issuer, directly or indirectly, and the power to adopt decisions liable to influence the issuer’s future development and business plans. 

The person who is in a close relationship with the person holding a managing position within the issuer is: 

a) the spouse of the person holding a managing position within the issuer or any other partner of such person assimilated to the spouse; 

b) the child cared for by the person holding a managing position within the issuer; 

c) other relatives of the person holding a managing position within the issuer, with whom such person lived together for at least one year prior to the respective transaction date; 

d) any legal entity placed in one of the following situations: being managed by any of the persons stipulated under paragraph (1) or letters a), b) and c) of this paragraph; or being directly or indirectly controlled by any of the persons provided under paragraph (1) or letters a), b) and c) of this paragraph; or being set up for the benefit of any of the persons provided under paragraph (1) or letters a), b) and c) of this paragraph; or having similar/equivalent economic interests as those of one of the persons provided under paragraph (1) or letters a), b) and c). 

The following persons are presumed to have access to privileged information: 

a) members of the board of directors and members of the executive management of the commercial company, its subsidiaries and the companies controlled by it; 

b) employees of the commercial company, its subsidiaries or the commercial companies controlled by it, who may, due to the nature of their job, have access to such information (accountants, legal advisors, secretarial staff, etc.); 

c) the persons providing professional services for the commercial company, its subsidiaries or the commercial companies controlled by it, who have access to such information (auditors, lawyers, advisors, etc.); 

d) the significant shareholders of the commercial company; if they are legal entities, the members of their board of directors and the members of their executive management; 

e) all the people known to have received such information from the people mentioned under letters a)-d); 

f) all the people acting in a concerted manner with the people mentioned under letters a)-e); 

g) all the subsidiaries of the commercial company. 

The initiated persons shall notify to the National Securities Commission and to the issuer all the transactions made on their own account in the shares admitted to trading on a regulated market, issued by the issuer in respect of which these people are considered to be initiated, or in derivative financial instruments or other financial instruments associated thereto. The notice is sent within maximum five business days as of transaction date. 

The broker facilitating the transactions mentioned under paragraph (2) has the obligation to notify the regulated market operator forthwith in respect of such transactions in order to allow the market to give out the information before the start of the following trading session. 

In view of making the notification, the broker has the obligation to request, and the persons mentioned under paragraph (1) have the obligation to disclose to the respective broker the capacity of an initiated person. 

The notification to the National Securities Commission stipulated under paragraph (2) is made in the case of transactions in shares issued by issuers registered in Romania or transactions in derivative financial instruments or other financial instruments associated thereto.