Franklin Templeton, Fund Manager of Fondul Proprietatea expressed its disappointment that the Romanian Financial Supervisory Authority (ASF) has failed to approve the new regulation regarding the listing of funds on foreign European Union Markets through the Depositary Interests (“DIs”) of shares listed in Romania (“DIs Regulation”), which was published by the ASF for public consultation on November 5, 2014. The approval of the DIs Regulation was the last step required to enable Fondul Proprietatea, a EUR 3.2 billion closed-end fund, to proceed with its secondary listing on the London Stock Exchange in accordance with the Fund’s shareholder resolution from April 28, 2014. The ASF posted on November 26, 2014 a notification on its website that the DIs regulation did not obtain the majority of required votes at the ASF Board meeting. No further information has been provided to explain the rationale for this outcome.
Greg Konieczny, Fund Manager of Fondul Proprietatea, commented in a press release: “The draft regulation was very robust and its approval would have enabled us to complete the LSE listing by December 12, 2014. We are firmly committed to working with the ASF Board to understand the rationale behind this decision and to work together to seek a satisfactory resolution that would enable the listing within the coming weeks. We would like to reiterate that the Fund’s listing in London will be a big step forward in the development of the Romanian capital market because it would attract a significant number of new foreign institutional investors in the Fund and ultimately in Romania.”
The Fund Manager considers that the recent decision sends an unfavourable message to foreign investors interested in investing in Romania. Moreover, observance of shareholders decisions in listed companies and a supportive regulatory environment are absolute requirements in order for the Romanian capital market to be upgraded to Emerging Market status.