Consultation by the European Commission on the Proposed Review of the Prospectus Directive

Consultation by the European Commission on the proposed review of the Prospectus Directive: comments made by the Romanian National Securities Commission (RNSC)

A. Amendments tothe Directive 2003/71/ECand Directive 2004/109/CEproposed by the European Commission:

Article 4 – Exemptions for Employee Shares Schemes

Taking into account that third country issuers, EU non-listed companies and EU companies that have securities traded on EU “exchange-regulated” markets (not listed on an EU regulated market) are not subject to the reporting requirements imposed on companies whose securities are admitted to trading on an EU regulated market, we consider that it is not appropriate to extend the exception from the publication of a prospectus referred to in art. 4 (1) e) of Directive 2003/71/EC.

We are of the opinion that in the case of these issuers (third country issuers, EU non-listed companies and EU companies that are not listed on an EU regulated market), the drawing up of a prospectus is required when shares are offered to the employees of their branches located in the European Economic Area.

However, we consider that the provisions of art. 23.4 of Regulation 2004/809/ECcan be appliedin these cases, provided that the information contained in such a prospectus (a “short form prospectus”) is sufficient for complete information of the said employees. Such prospectus may be approved by a competent authority and subsequently passported in accordance with the provisions of Directive 2003/71/EC, being also valid in other Member States.

Also, the Romanian NSC considers that the establishment of the content of a prospectus can be done only by amending the Directive 2003/71/EC and the Regulation issued in its application (Regulation 2004/809/EC).

However, regarding the provisions of art. 4 (1) e) of the Directive, the RNSC considers appropriate to amend it as follows:

“securities offered, allotted or to be allotted to existing or former directors or employees by their employer or by an affiliated undertaking, provided that the said employer and/or the affiliated undertaking have securities already admitted to trading on a regulated market and a document is made available containing information on the number and nature of the securities and the reasons for and details of the offer."

Due to this change the exemption from the publication of a prospectus will cover also the situation where securities are offered to the employees of the European Economic Area subsidiaries of companies whose securities are admitted to trading on a regulated market.

As regards the other proposals for amendments tothe Directive 2003/71/EC and Directive 2004/109/CE, the RNSC has no comments, these proposals being useful, leading to the reduction of the administrative costs of issuers and support the development of investments on the capital market.

B. Other issues and analyses of the European Commissioncontained in the second document (“Background Document”) subject to public consultation:

Disclosure obligations for small quoted companies

Regarding the two alternative solutions proposed by the European Commission, the RNSC considers that for small quoted companies the second solution is more appropriate, namely reducing the amount of information to be included in a prospectus (a "mini prospectus"), by amending in this respect the provisions of the Prospectus Directive and the Regulation issued in its application (Regulation 2004/809/EC).

Rights issues

The RNSC welcomes the European Commission’s proposalthat offers of rights should be included among the exemptions set out in art. 4 of the Prospectus Directive, provided that a document is available containing information on the reasons for and details of the offer.

As regards the other EC’s proposals and analysescontained in the “Background Document”, the RNSC has no comments.