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Art.1. The present law regulates the status of the National Securities Commission (NSC), the establishment and functioning of the securities markets, together with the institutions and operations specific to such markets, for the purpose of mobilising the savings and financial availabilities by means of securities, under conditions appropriate for the protection of investors.

Art. 2. For the purpose hereof, the terms and expression below shall have the following meaning:

1. Securities means negotiable instruments issued in a material form or in a book-entry form, which confer on their holders patrimonial rights over the issuer, according to the law and under the specific terms of their issue. Securities can be shares, bonds, as well as derivatives or any other credit instruments classified by N.S.C. in this category;
2. Investor means any person that, on his/her own account, buys, holds and sells securities, without performing intermediation as an act of trade;
3. Significant shareholder means any person that, directly and individually, or by the intermediation of (or jointly and in connection with) other persons, holds or is the owner of shares or other securities entitling him to shares which, cumulatively, would represent either at least 5% of the issuer's subscribed capital, or would confer on him at least 5% of the total voting rights in the General Meeting;
4. Control position means any participation in the share capital conferring on its holder or holders, acting in concert, at least one third of the total voting rights in the issuer's General Meeting, either alone, or together with the vote which could be obtained by the holder or holders of the respective participation acting in concert, through the conversion of the convertible bonds or by exercising the rights relating to other securities subscribed by the issuer and belonging to the holder or holders of the respective participation in the capital acting in concert;
5. Majority position means any participation in the share capital conferring on its holder or holders, acting in concert, either more than half of the total voting rights defined at letter d), or enough voting rights in order to appoint and revoke the majority of the members of the issuer's Board of Directors;
6. Takeover means a transaction or a series of transactions with securities, conferring on the related person or group of persons, through the securities so acquired, alone or together with those already held or controlled, a control position or a majority position in the issuer's share capital;
7. Related person means the spouse or any relative, up to the third degree, or any affiliation, up to the second degree, of the person who, alone or together with other related persons, holds a control position, as defined at letter d), or the legal person in which such a natural person, alone or together with other related persons, holds a control position. In the case of legal persons, any person holding a control position, either alone and directly, or in a direct or indirect way, acting in concert with other legal or natural persons, shall be considered a related person;
8. Issuer means the legal person undertaking recognition and payment of the rights embodied in the negotiable instrument, in accordance with the clauses stipulated on the instrument and pursuant to the law governing it; any legal person involved in a public offer procedure shall be also considered an issuer;
9. Issue means the operation by means of which securities are offered for subscription to potential investors;
10. Public offer means the proposal made by an issuer, by investors or intermediaries, to acquire, sell, convert, exchange or otherwise transfer securities or rights related to them, broadcasted through mass media or otherwise communicated, but subject to the condition that the offer be received by minimum 100 persons, unselected, in one way or another by the offeror, and who should all be treated equally.

2. a primary offer has as its object securities proposed by the issuer to be subscribed on the date of the issue, with the aim that this be placed on the market;
3. a secondary offer, which is subsequent to the issue, has as its object a package of securities previously issued and acquired initially by means of private placing;

The terms and expressions constituting the object of paragraph 1 shall have the meaning established in this paragraph whenever used in the following provisions, when these provisions refer to tasks, functions or acts of certain authorities or public institutions, to recording requirements, information and publicity, or authorisation or exemption regimes in respect of intermediaries, agents or investors subject to the present law, to be regulated, controlled or only supervised, securities market or transactions with securities, to intermediaries, issuers of or investors in securities circulating in such markets or constituting the object of such transactions.

In case of any doubt as to the applicability of the provisions hereof, the classification of any person, institution, situation, piece of information, operation, or legal act or negotiable instrument in respect of its inclusion in or exclusion from the sphere of the terms and expressions having the meaning established in paragraph 1, shall be determined by NSC, ex officio or on the interested party's request.

Any dispute regarding any of the classifications provided by paragraph 3 shall be within the competence of the court of appeal, which shall pronounce an irrevocable sentence.

Art. 3. The issue of bonds and other securities of a similar nature by the State, any district or city and by authorities of the central and local public administration shall not be subject to the provisions hereof. Intermediation of such securities shall be regulated hereby to the extent this it is performed by intermediaries subject to the provisions hereof.

The securities issued by companies incorporated and functioning pursuant to Law no. 31/1990, even if such companies are subject to special legal regimes as far as their business objectives are concerned, shall be subject to the provisions hereof if and only when the shares, bonds and other securities conferring rights on these companies constitute or constituted the object of a public offer according to the meaning set out in Art.2, paragraph 1, letter j).

The certificates of owner issued by the Private Ownership Funds (POFs) may be negotiated on the stock exchange by means of sale or purchase orders and may be offered or asked in exchange for other securities under the terms of the stock exchange market, being accepted for listing, de jure, on any stock exchange, by the fact and from the date of the registration by the POFs of the documents of the issue, with the Securities Registration Office ("Oficiul de Evident,a¯ a Valorilor Mobiliare").

Art. 4. The administration of the present law and its implementation, as well as the supervision and control in respect of the observance of its provisions shall be entrusted to NSC, vested, for this purpose, with powers of regulation, decision, authorisation, exemption, interdiction, intervention, investigation and disciplinary and administrative sanction, under the terms, methods and limits established by the following provisions.
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Art. 5. NSC is established by the present law, as an autonomous administrative authority, having legal personality.

The authority of NSC shall be exercised over the whole territory of Romania.

The headquarters of NSC shall be in Bucharest.

NSC may set up representative offices in any other place on the territory of Romania.

Art. 6. NSC shall have the following tasks:

1. to support the good functioning of the securities market;
2. to insure investors' protection against unfair, abusive and frau dulent practices;
3. to inform the holders of securities and the public about issuers and the securities issued by them;
4. to establish the framework of the activities of the securities intermediaries and agents, the regime of the professional associ ations established by them and of the bodies in charge of assuring the functioning of the securities markets.

The Government and, by its order, as the case may be, the local public administrations, shall delegate to NSC, for administration, the necessary assets (buildings and land), for the needs of NSC, its representative offices and stock exchange set up by it, out of the public estate belonging to national or local authorities, as the case may be, within 60 days from NSC's request.

Any rights, charges and fines provided by the law and charged or levied by NSC, as well as the tariffs established and levied by it shall constitute income to the budget of the State.

Art. 8. NSC shall be composed of 5 members, inclusive of the President and the Vice-President. They shall be appointed and may be removed by Parliament, in a joint meeting of the two Chambers.

The appointment of the members of NSC shall be made from the joint list proposed by the Privatisation Commission and the Commission for Budget and Finance of the Senate and by the Commission for Economic Policy, Reform and Privatisation and the Commission for Budget, Finance and Banks of the Chamber of Deputies.

Art. 9. The duration of the mandate of the members of NSC shall be of 5 years and each member may be reappointed only once.

The first members of NSC shall be appointed with mandates of different duration, so that the mandate of one of them expires each year. The President shall be appointed for a 5-year mandate and the Vice-President for a 4-year mandate. The members whose mandates have expired shall hold office until the appointment of their successors.

In case that it is impossible for a member to exercise his mandate, the parliamentary commissions set out in Art. 8, paragraph 2 shall propose a person to be appointed by Parliament, for the remaining period of the mandate.

Any circumstance creating a situation where it is impossible for a member to exercise the mandate for more than 90 consequent days shall fall within the above.

Art.10. The members of NSC must be Romanian citizens domiciled in Romania, no younger than 35, having a good reputation and professional training in the fields of economics, finance, banking or law, and at least 5 years of speciality practice.

The members of NSC:

1. may not be spouses or relatives, according to the meaning of Art. 2, paragraph 1, letter g) hereof of the President of Romania, of the President of the two Chambers of Parliament, of the members of the Government, of the Governor of the National Bank of Romania or of each other;
2. may not be members of any political party;
3. may not exercise another public or private remunerated job, except for teaching in universities;
4. may not be members on the Board of Directors of the legal persons, subject to supervision by NSC or the National Bank of Romania, or significant shareholders in such legal persons, as defined in Art.2, paragraph 1, letter c) hereof;
5. must not have been declared bankrupt;
6. must not have judiciary record.

1. on expiry of his mandate;
2. by resignation;
3. by revocation by Parliament;
4. on the occurrence of any of the incompatibility or impediments set out in paragraph 2, letters a)-f);
5. by substitution, in accordance with Art.9, paragraph 3. The members of NSC shall have the obligation to notify immediately, in writing, the Parliament of Romania, in respect of the occurrence of any of the incompatibility situations stipulated in Art. 10, paragraph 2. The member of the Commission shall be suspended de jure until the decision of the Parliament is passed.

In case of the President being temporarily incapacitated, through absence or other reason to attend the NSC, the legal representative of NSC shall be its Vice-President.

NSC shall deliberate validly in the presence of at least 3 of its members, including the President or, in his absence, the Vice- President.

Resolutions shall be passed by a majority vote of the present members. If there is equality of votes, the President or, in his absence, the Vice-President shall have a casting vote. Any passed resolution shall be binding on all the members of NSC, the members voting against it and the absent members may express their separate opinion in the minutes of the respective meeting.

Art. 12. In exercising its duties, NSC shall co-operate with other public authorities in order to insure protection of the investors in securities and the transparency of the securities market.

NSC may cooperate with foreign institutions having as their objective the regulation or supervision of the securities markets and may participate in international organisations acting in this field.

Art. 13. In order to accomplish the objectives set out in Art.6, NSC shall exercise the powers stipulated in Art.4 by means of adoption of norms, issue of individual acts and establishment of measures, under the signature of the President, after deliberation in meetings held in accordance with Art.11, paragraphs 3 and 4. NSC shall adopt norms by means of regulations and instructions which shall be enforced by orders of the President. The individual acts are: decisions, ordinances, attestations and notices.

NSC shall establish through internal regulations, its organisational structure and duties of the management and of the employees.

Art. 14. Regulations shall establish norms regarding:

1. organisation and functioning of stock exchanges and other securities markets;
2. authorisation and functioning of mutual funds and investment companies, as well as any managing company administering them;
3. organisation and functioning of the securities collective depositing systems;
4. functioning of the Securities Registration Office;
5. authorisation and performance of securities intermediation;
6. activity of external independent auditors and investment advisers;
7. promotion and realisation of public offers of securities;
8. approval and modification of the regulations regarding stock exchange operations;
9. functioning of the organisations involved in settlement of securities transactions, approval and modifications of their regulations;
10. any other bodies and operations specific to the securities markets regulated, controlled or supervised, in accordance with the law, by NSC.

1. establishment and functioning of the professional associations of securities intermediaries and securities agents;
2. reports, data and information to be communicated to NSC and to be published by issuers, securities holders and securities intermediaries for the information of the public, way of keeping the records, procedures, cases and terms of communication and/or publication;
3. confidential and privileged information regime;
4. transactions involving significant shareholders and performance of private transactions with securities;
5. transfer of control positions and majority positions;
6. exemptions which may be granted by the Commission;
7. any other obligations regarding records, reports or publicity which could be required by the law in order to ensure investors' protection.

Art. 15. Decisions are acts by means of which NSC establishes or dissolves institutions and bodies, grants or revokes authorisations, annuls or confirms acts of its agents, grants exemptions, delegates or revokes powers, approves regulations of the institutions and bodies of the securities market.

Ordinances are acts by means of which NSC disposes presentation of documents, reports and information, hearings, imposes inter dictions or suspension of authorisations or activities, orders inquiries and other investigations, orders preservation measures such as collection and depositing of documents or securities, freezing assets or funds, applies disciplinary and administrative sanctions.

Attestations are acts by means of which NSC approves prospectuses for public offers, confirms or recognises situations or qualities, reports or communications of data and information.

Notices are acts by means of which NSC formulates official answers to questions regarding application of the law and of the regulatory norms, or gives qualifications under the provisions of Art. 2, paragraph 3.

Art. 16. NSC may delegate one or more of the powers vested on it by the law to some of its agents or to certain institutions or bodies of the securities market.

The delegation of powers provided by the above paragraph shall nominate the appointed person, the powers and acts by means of which is going to be exercised, the measures which may be taken and the duration of the delegation. The delegation of powers may not have as its object the adoption of norms, but only individual acts, issued on behalf of NSC.

The individual acts adopted and the measures disposed during the exercise of the power delegation may be challenged in front of NSC, which may confirm, modify or annul them, hearing the vested person and, if considered necessary, the person to whom such acts are to applied. NSC may dispose, on request or ex officio, the suspension of the acts adopted and of the measures disposed during the exercise of the delegated powers.

The revocation of the power delegation shall be made by NSC only by hearing the person to whom the powers have been granted.

Art. 17. The regulations and instructions adopted by NSC as well as its individual acts, may be challenged for illegality by means of appeal in the courts of appeal. The exception of illegality may be brought up at any stage of the judgment, in the court of first evidence or during the appeal, with suspension of the judgment and submittance of the exception to the competent court of appeal, which shall pronounce an irrevocable sentence, according to the procedure provided by the Law regarding the administrative contention.

Art. 18. NSC shall have locus standi and may intervene in any trial regarding norms adopted or individual acts issued by it, without having an obligation to prove any interest.

Art. 19. The acts of NSC are official deeds and benefit from the probationary force of authentic deeds, their content may be challenged only through the procedure of proving them false.

Periodically, NSC shall edit and publish a bulletin containing the regulations adopted by it and the stage of their application, in which will be published the announcements regarding the position of the securities markets, concerning their institutions and bodies, issuers, holders, intermediaries and operations.

Access to the documents held by NSC, both to those containing reports and data on the issuers, intermediaries and securities holders and those regarding analyses and ascertainments of NSC, shall be granted in accordance with the regime established by NSC.

Art. 20. NSC members and employees are bound to keep strict confidentiality of any information acquired during or as a result of the exercise of their duties and which has not become accessible to the general public, being, in respect of such information, subject to the legal regime of secrecy and confidentiality.

NSC shall be directly responsible for any prejudice caused by any breach of the obligation of confidentiality by or due to the fault of any of its members or employees.

Art. 21. NSC shall establish its own securities registration office, which shall be provided with all the necessary information regarding the securities which are subject to the provisions hereof and their respective issuers and regarding all the other natural and legal persons subject to supervision by NSC.

The securities set out in Art. 3, paragraph 1 and 3 shall be registered on receipt of the issue documents.

The records kept by the Securities Registration Office shall be erased in the following situations:

1. on equity liquidation of the issuer as a result of its dissolution on bankruptcy;
2. on entire depreciation or redemption of the securities registered with the Securities Registration Office, including the situation when such have been caused by a merger of the issuer;
3. when NSC ascertains an excessive concentration of the holding of the registered securities, leading to a decrease of the interest of the public, under the level justifying keeping the records;
4. on the justified request of the issuer;
5. on serious or repeated breaches, by the issuer, of the provisions of the law or of the norms adopted in respect of its application and considered to be essential for the investors' protection.

Art. 22. NSC shall present at annual activity report to Parliament, no later than April 31.

Parliament may order the verification of the activities of NSC at anytime.

Art. 23. The rules of professional ethics of the members of NSC, those regarding its staff and its disciplinary regime, as well as the remuneration of the members and staff of NSC shall be established by the law.
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Art. 24. A primary public offer, defined in Art. 2, letter j) 1) hereof may be made by the issuer or by an authorised securities company, on the issuer's behalf. A secondary public offer, defined in Art. 2, letter j) 2) hereof, may be made by the holders of the respective securities or by an authorised securities company, on their behalf. A secondary public offer may be an offer of sale, purchase or exchange of securities.

A public offer involving an authorised securities company may be performed either by means of a guaranteed placement, or through the method of the best efforts placement, in the latter case, the authorised securities company acting as the offeror's agent.

A public offer for the acquisition of a control or a majority position, defined in Art. 2, letters d) and e) or for the purpose of a takeover, defined in Art.2, letter f) may be effected through an authorised securities company, acting as the offeror's agent. If such an offer also involves shares accepted for listing on the stock exchange, it shall be mandatorily carried out through the respective stock exchange.

Art. 25. Any public offer of securities defined in accordance with Art.2, letter j) and regulated hereby requires, before the publication of its prospectus, the authorisation by NSC.

On the request of the initiator of the offer, NSC may authorise an exemption, under the terms settled by the regulations mentioned in Art.14, paragraph 2, letter f). Any public offer made without an authorisation or exemption or not complying with the conditions established by the authorisation shall be null at law and shall entail the application of the sanctions provided by the law for the persons at fault; the offeror shall be bound toward its partners acting in good faith by the obligation of restitution and shall be liable for the damages resulting from the nullity of the transactions which possibly have been concluded under such an offer.

Art. 26. In order to obtain the authorisation for a public offer of securities subject to the present law or the grant of exemption, the offeror shall present to NSC a prospectus containing the main elements of the transaction, depending on the securities constituting its object and all the relevant information regarding the offeror and securities which are to be offered publicly, not-withstanding the fact such information is or is not subject to the legal obligation of publicity, reporting or registration.

The information that must be contained in the prospectus must be certified by the offeror, which shall be liable for its truth, accuracy and completeness. In the cases regulated by NSC, the information in the prospect shall be also certified by the external auditors of the issuer and, respectively, of the involved securities company.

The minimum information content which must be included in the prospectus for obtaining the authorisation and, respectively, the exemption, as well as its form of presentation, by categories of offers, shall be established by NSC by the norms adopted by it.

Art.27. The authorisation or exemption application shall be submit ted, together with the prospectus, to NSC, which must decide on the application within 30 days from registration.

Should NSC take no decision within the term set out in the previous paragraph, the offer of securities constituting the object of application shall be considered a private offer and may be freely promoted.

Art.28. In order to ensure compliance with the regulations regarding the content, form of presentation and distribution of the prospectus, NSC may order the verification of the records, accounts and other data sources of the issuer, its subsidiaries or its majority shareholders, of the auditors of the involved securities company, as well as of the related persons.

Art.29. When the authorisation or the exemption has been obtained, the registered prospectus shall become a public offer of securities, according to the content and form in which it was registered or with the amendments, completions, deletions or modifications possibly settled by NSC through its decision of authorisation or, respectively, grant of exemption, as a result of the examination of the information presented or, as the case may be, of the extension of its verification.

By its decision of authorisation or, respectively, by granting the exemption, NSC shall settle the final form of the offer to be published, communicated or otherwise distributed to the potential interested persons; by the same decision, NSC may establish conditions, limits or restrictions which must be observed during the promotion of the public offer of securities.

On the date of the issue of the decision of authorisation or, respec tively, of granting the exemption, the seal of NSC shall be affixed on the offer finalised in accordance with the previous paragraph, referring to the decision and bearing the authorised signature, two originals being delivered to the initiator of the offer and one being registered in the records of NSC. The text of the public offer may not be published, communicated or otherwise distributed and may not constitute object of publicity otherwise than bearing the seal of NSC.

The decision of authorisation or, respectively, the grant of the exemption, referred to in the text of the finalised offer shall not represent a guarantee or any kind of evaluation by NSC in respect of the opportunity, advantages or disadvantages, profit or risks which can be incurred by the transactions to be concluded by accepting the public offer constituting the object of the decision; the decision shall certify only the compliance of the offer with the provisions of the law and with the norms adopted in respect of its application.

Any form of publicity encouraging the acceptance of the public offer of securities, made by presenting the offer as benefiting from advantages or other qualities arising from the decision of authorisation or, as the case may be, of granting the exemption, presented or otherwise mentioned contrary to the provisions of the previous paragraph shall be considered as vitiating consent by abusive or fraudulent publicity, which affects the transactions proved as having been motivated by such presentation, and NSC may decide to withdraw the authorisation or, as the case may be, the exemption granted to the respective offer, with application of civil sanctions to the persons at fault, unless, according to the law, the deed represents a penal trespass.

Art. 30. The term of validity of the public offer of securities shall be that stipulated by the offeror, but may not be longer than 180 days from the date of the seal of NSC. Unless otherwise stipulated expressly, the public offer shall be in effect from the date of its publication.

On the offeror's request, the validity of the public offer of securities may be extended only once, for a period of maximum 180 days from the expiry date of the initial term. NSC shall approve the extension of the validity of the public offer of securities only provided that all the information included in the prospectus has been updated, and out of it, the financial position checked by an auditor, is reported as on a date preceding the expiry of the initial term by no more than 90 days.

In case of unfavorable market conditions, NSC may grant ex officio, in accordance with its own regulations, short-term extensions, not exceeding 50 days, to the benefit of all the offers being within their term of validity.

A public offer of securities shall produce all its effects provided that during its period of validity the truth, accuracy and completeness of the information contained in the prospectus are preserved. On expiry of its term of validity, the public offer of securities shall not have legal force any longer.

Art. 31. NSC may order the suspension of the authorisation of the public offer if on the basis of the analysis of the market environment, it estimates that, temporarily, it does not permit normal transactions with securities constituting the object of the offer, affecting either the investors' protection or the legitimate interests of the offeror of securities.

NSC shall decide to revoke the decision of authorisaton, respectively, the grant of any exemption, if the accomplishment of the public offer is being made with the infringement of the provisions of the law, of the regulations and instructions adopted by NSC or with the non-observance of the terms, limits and restrictions settled by the respective decision.

NSC may decide to revoke the decision of authorisation or, respectively, the grant of the exemption in the following situations:

1. if it assesses that circumstances subsequent to that decision cause fundamental modifications of the elements and data which motivated it;
2. when the offeror informs NSC that he withdraws the offer which has not come in effect yet, in accordance with Art.30, par.1.

Art. 32. The suspension of the accomplishment of the offer shall interrupt the lapse of its term of validity; when the suspension is lifted or ceases, the accomplishment of the offer shall restart.

The transactions concluded until the revocation date shall remain unaffected, with the exception subject to the condition of completion of the offer.

The cancellation of the decision of authorisation, respectively of granting the exemption, shall nullify the transactions with securities concluded until the cancellation date, entailing the restitution of the securities, respectively of the funds received by the offerors and the application of the civil or penal sanctions, as the case may be.
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Art. 33. Intermediation of securities, as defined in Art.2, letter i) hereof shall be accomplished in organised markets, established and functioning pursuant to the authorisation and under the supervision of NSC.

Intermediation of securities outside of the regulated markets or without complying with the provisions of the regulations regarding the transparency of the market and the investors'protection against fraud is null and void de jure, entailing the sanctions provided by the law against the parties and the involved intermediaries.

Art. 34. Intermediation of securities comprises:

1. sale and purchase of securities on the clients' account;
2. sale and purchase of securities on the intermediary's own account;
3. guaranteeing the placing of securities on primary or secondary offers;
4. transmission of the clients' orders in order to be executed by other authorised intermediaries;
5. holding of clients' funds and/or securities for the purpose of the execution of the orders regarding the respective securities;
6. administration of the clients' accounts of individual portfolios of securities;
7. keeping clients' funds and/or securities for the purpose of and during the administration of their portfolios, or for other purposes, expressly authorised by the regulations of NSC;
8. grant of loans for financing clients' transactions, within the limit established by the National Bank of Romania, and with the consultation of NSC;
9. other activities of intermediaries in securities provided for the regulations issued by NSC.

Art. 35. Intermediation of securities regulated hereby shall be performed exclusively by intermediaries authorised by NSC, securities companies having the legal form of joint-stock companies, having as their exclusive business objective the intermediation of securities.

The securities companies shall perform the intermediation activity through natural persons, employees or exclusive representatives, acting as securities agents. These natural persons shall perform their activity in the name and on account of the company from which they received transaction orders and may not undertake securities intermediation activities on their own name and/or account.

NSC shall establish the situations of incompatibility and the procedures for authorising securities agents, as well as the regime of suspension and the consequences regarding revocation and cancellation of the authorisations.

The banking companies and other institutions of credit subject to supervision by the National Bank of Romania may not perform intermediation of securities, either on their own behalf or on behalf of third parties. They may participate, under the terms hereof, in securities companies which shall function under NSC's supervision.

NSC may authorise only Romanian legal persons to undertake specific activities regarding intermediation of securities in Romania, in accordance with the present law.

No natural person may undertake intermediation of securities without an authorisation from NSC.

The unauthorized exercise of any securities intermediation activity, as well as any unauthorized usage of the expressions "intermediation of securities", "securities intermediary", "securities agent" or of any similar expression entails liabilities in accordance with the law.

Art. 36. In order to obtain the authorisation of performing inter mediation of securities, the securities companies must comply with the following condition:

1. to have intermediation of securities as their exclusive business objective;
2. to bring evidence of a minimum capital, subscribed and fully paid, and to maintain a minimum level of net capital which is to be established by NSC, as follows:

1. for the securities companies having as business objectives the operations set out in Art.34, letters a), b), d), e), f), g), the amount specified as minimum subscribed and fully paid capital;
2. for the securities companies having as business objectives the operations set out in Art.34, letters a), d), e), half of the amount settled in paragraph 1;. 3) for all the other securities companies, the amount settled in paragraph 1) multiplied by three;

Whenever NSC authorises other activities related to the inter me diation of securities, in accordance with Art. 34, letter i) hereof, it shall estab lish the minimum level of capital for such activities, as the case may be.

Art. 37. NSC shall not give the authorisation of intermediation of securities to a company if:

1. the company is undergoing any of the stages of the bankruptcy procedure or any of the stages preceding this or if such a procedure has been initiated against its legal predecessor;
2. the company has been excluded from a stock exchange;
3. any of its significant shareholders, members of the Board of Directors, managers or securities agents:

1. is incompatible, under the situations set out at letters a) and b) or holds such a position in a company that falls in one of the situations set out at letters a) and b);
2. has previous penal convictions;
3. was sanctioned by NSC with the interdiction of exercising any professional activity regulated hereby, as long as such an interdiction remains in force.

The securities companies and their agents shall have the obligation to assure the execution with priority of their clients' orders under the best terms existing in the market, not to complete against or manipulate the execution of the clients' orders or to determine the execution of such orders under price and cost terms less advan tageous for the clients than for the intermediary or any person involved.

The securities companies and the securities agents shall not be allowed to accomplish their functions and attributions in situations of conflict of interests between the client and the intermediary.

The contractual disputes between the securities companies, as well as between these and their clients may be submitted to arbitration.

Art. 39. The securities companies shall follow uniform procedures for transactions registration, internal control mechanisms, as well as administrative and accounting organisation systems established by NSC.

The securities companies in Art.36, letter b), point 3) shall present to NSC their financial statements at least once a month and the securities companies mentioned in Art.36, letter b), point 1) and 2) at least quarterly.

NSC may establish shorter reporting periods for specific aims. The content and the form of these reports will be established by NSC.

The supervision may be also effected by periodic inspections.

The securities companies shall submit to NSC for prior approval any modification of their way of organisation and functioning, any increase or decrease in their capital, as well as the issue of other securities, notifying NSC in respect of any significant changes in the management of the company and in the holding of the share capital.

Art. 40. The securities companies are not allowed:

1. to affect artificially the free balance between the offer and demand of securities, by registering fictitious transactions or by oscillations of prices not based on the effective transfer of the ownership on the respective securities;
2. to effect transactions on their own behalf before executing all the competing orders of the clients in respect of securities of the same issuer;
3. to effect transactions based on privileged and/or confidential information;
4. to effect transactions contrary to the other provisions of the NSC's regulations.

NSC may settle freely negotiable commissions within a maximum level which may not be exceeded by the securities intermediaries.

Sharing of commissions among more intermediaries shall be regulated by NSC.

Art. 41. NSC shall suspend the authorisation of the securities companies and/or securities agents for a period between 5 and 90 days, in case of non-compliance with the provisions hereof or the NSC regulations, unless the conditions for the revocation of the authorisation or for the application of other sanctions provided by the law are accomplished.

NSC shall revoke the authorisation obtained on the basis of false or misleading information.

The securities company shall be lawfully dissolved by the cancellation of its authorisation. By decision of cancellation of the authorisation of performing securities intermediation, NSC may prohibit the significant shareholders, the members of the Board of Directors and of the management and the securities agents of the respective securities company from undertaking either temporarily, or for an undefined period, intermediation of securities or any other activity subject to the provisions hereof and of the NSC regulations.

NSC may revoke the authorisation of performing specific activities or any intermedation of securities in the following cases:

1. if subsequent events generate incompatibility in obtaining an authorisation for performing intermediation of securities;
2. the causes of suspension have not been remedied within the suspension period or, if remedied, their reoccurrence would meet the conditions for another suspension;
3. if the securities companies or their securities agents performed activities forbidden by Art.40;
4. on the request of the interested parties, provided that all the debts of such a securities company have been paid;
5. for other reasons established by NSC.

NSC shall adopt regulations regarding the authorisation of estab lishment, the memorandum of association and the supervision of the authorised associations. NSC may delegate its competence to self-regulate to the authorised professional associations.

Art. 43. To the extent they do not contravene the provisions of Art.33, direct transactions regarding securities regulated by the present law shall be permitted provided that:

1. the parties are spouses or relatives up third degree or legal persons controlled by such natural persons, provided that the activity of the respective legal persons is not subject to the regulations hereof;
2. none of the parties in a private transaction is, or becomes as a result of such a transaction, a significant shareholder according to Art.2, letter c);
3. the private transactions with securities of any issuer and which involve any natural or legal person do not exceed, in a 12-month period, the number of securities equivalent to 1% of the total of the respective securities in circulation;
4. the transactions are registered with NSC within 3 working days and, if the securities are listed, with the stock exchange.

Art. 44. Stock exchanges shall be established as public institutions by decision of NSC and shall be vested with legal personality, being allowed to receive donations, legacies and subsidies.

NSC shall decide the establishment of a stock exchange only when a minimum of 5 securities companies would have applied for and received the authorisation of negotiating on the stock exchange.

By the establishment decision, NSC shall: settle the place of business of the stock exchange, assign the building where it will function and allocate the initial means for its setting up, settle the terms for the constitution of the administrative and management bodies and appoint the General Inspector ("Comisar General") of the stock exchange.

The resources for the initial equipping, for the opening and functioning of the stock exchanges during their first year of activity shall be allocated from the budget of the State, on the basis of the proposal submitted by NSC.

The resources set out in the previous paragraph shall be recouped by NSC from the stock exchange within 3 years, beginning with the third year of activity of the respective stock exchange, and NSC shall pay the reimbursed amounts to the budget of the State.

The decisions of NSC concerning the establishment of stock exchange will be published in Official Gazette of Romania.

Art. 45. The supervision and control of the Stock Exchange, in respect of its administration and functioning, as well as in respect of the operations' regime and the discipline of the securities companies and securities agents, shall be exercised directly and permanently by the General Inspector of the stock exchange, who shall supervise the strict and full observance of the provisions of the present law, of the regulations regarding its application and of the stock exchange regulations.

The General Inspector of the Stock Exchange shall be appointed by NSC for a 5-year mandate and may be reappointed by successive mandates. The conditions of eligibility, the incompatibility and the impediments regarding the office of General Inspector shall be those provided by the present law for the members of NSC.

In case of impossibility of continuing the mandate, because of incompatibility, legal impediment, demise or resignation, NSC shall appoint a General Inspector for a new mandate.

The office of General Inspector of a Stock Exchange shall rank similarly to that of Director General of NSC.

The General Inspector may be revoked by NSC and he shall be disciplinary liable before NSC.

Art. 46. For the purpose of supervising and controlling the Stock Exchange, the General Inspector shall:

1. participate, without having a voting right, in all the meetings of the Stock Exchange association, and may formulate comments and objections and may ask for them to be included in the minutes of the meeting;
2. attend the meetings of the Stock Exchange Committee and may formulate comments and objections and may ask for them to be included in the minutes of the meeting;
3. supervise the Stock Exchange operations, having free access to all the premises, documents, information and records of the Stock Exchange;
4. transmit to NSC his findings in respect of the infringement of the provisions of the law, of the regulations regarding its application and of the Stock Exchange regulations, proposing the measures to be taken and the sanctions to be applied by NSC;
5. propose to NSC the cancellation of the acts issued by the Stock Exchange Committee or, respectively, by the General Manager of the Stock Exchange, when he considers them as being contrary to the present law or to the regulations regarding its application; if he considers this necessary, NSC shall notify the Stock Exchange Committee, respectively the General Manager, in respect of the notification served by the General Inspector, suspending the challenged acts from the date of the receipt of the notification; NSC must make a decision within 5 days from the General Inspector's notification, by canceling or confirming the challenged acts, and the solution shall be notified immediately to the Stock Exchange Committee and to the General Manager, respectively. If NSC does not make a decision within the settled term, the challenged acts shall remain final and enforceable;
6. draft and transmit to NSC the quarterly report on the Stock Exchange activity.

Art. 48. By a decision notified to the Stock Exchange Committee, NSC may delegate to the General Inspector the exercise of one or more of its intervention, investigation and interdiction powers conferred by the law.

The acts issued during the exercise of the delegated powers shall be communicated by the General Inspector to NSC, which, ex officio and at its own discretion, may reform, revoke or cancel them, after hearing the General Inspector. The General Inspector shall also communicate to the General Manager of the Stock Exchange the acts issued during the exercise of the delegated powers.

The assignment of powers set out in paragraph 1 may be revoked by NSC only after hearing the General Inspector.

Art. 49. A Stock Exchange Association shall be set up in any Stock Exchange and shall function in accordance with the provisions hereof and with the Statutes adopted by its first General Meeting and submitted to NSC for approval.

The Stock Association shall be established and shall function on the basis of the community and complementarity of its members in respect of the good administration of the Stock Exchange and the assurance of the continuous, orderly, efficient, equitable and transparent performance of the transactions with securities listed on the Stock Exchange, under appropriate conditions for investor's protection.

The members of the Stock Exchange Association shall be the securities companies authorised to negotiate on the respective Stock Exchange.

Art. 50. The membership of the Stock Exchange Association is acquired on the date of registration of the interested securities company in the Register of Associates, on the basis of the authorisation of dealing on the Stock Exchange.

The membership of the Stock Exchange Association shall cease on the withdrawal of the member or on the revocation of the authorisation of dealing on the Stock Exchange, and shall come into effect on the date of the erasure from the Register of Associates, erasure which shall be operated upon the notification in respect of the withdrawal of the member or of the revocation of its authorisation of dealing on the Stock Exchange.

Art. 51. The Stock Exchange Association shall hold Ordinary General Meetings twice a year; the Extraordinary General Meetings shall be convened whenever necessary, on the request of at least 1/3 of the members of the Association or of the Stock Exchange Committee.

The quorum for a General Meeting shall be the presence of half plus one of the total number of members of the Association; if at the first convening this quorum is not accomplished, a new General Meeting shall be convened, not earlier than 10 days after the date the quorum was not met, this one being statutory constituted and working validly in the presence of any number of members. Participation in a General Meeting shall also be possible through representation by a member who is present, provided that the total number of the represented members is not larger than the number of those members present.

Art. 52. In the General Meeting of the Stock Exchange Association each member shall have one vote.

Decisions shall be made by absolute majority of the votes of these members present and represented.

The members who have not paid their subscriptions up to date may not exercise their voting rights in the General Meeting, with the exception of the initial General Meeting.

Art. 53. The membership fees shall be settled yearly and shall be due entirely, irrespective of the date of acquiring or ceasing membership of the Stock Exchange Association.

The membership fees regime shall be settled by the Statutes of the Stock Exchange Association.

Cessation of membership of the Stock Exchange Association in accordance with Art. 50, paragraph 2 , shall not excuse the former member from the payment of the due membership fees for the respective year.

In order to cover the expenses necessary for their functioning, Stock Exchanges may establish, by their internal regulations, tariffs on admittance of companies' securities for listing.

Art. 54. The General Meeting of the Stock Exchange Association shall have the following attributions:

1. to adopt and modify the regulation of the Association, subject to NSC's approval;
2. to elect the members of the Stock Exchange Committee;
3. to approve the budget of the Stock Exchange, presented by the Stock Exchange Committee;
4. to approve the Stock Exchange balance sheet, presented by the Stock Exchange Committee together with the auditors' report;
5. to appoint 3 auditors of the Stock Exchange, for a 5-year mandate, subject to the regime set out in Chapter VII hereof;
6. to appoint the persons to be recorded on the list of arbitrators of the Chamber of Arbitration of the Stock Exchange;
7. to adopt proposals regarding the functioning of the Stock Exchange and submit them to the Stock Exchange Committee.

If the number of members of the Stock Exchange Association is bigger than 9, the General Meeting shall be convened immediately, to appoint, by a majority of 2/3 of the number of the total members of the Stock Exchange Association, a new Stock Exchange Committee, composed of 9 members. If at the first convening of the meeting the quorum is not met, the procedure set out in Art.51, paragraph 2 shall be followed. The new Stock Exchange Committee so elected shall exercise its mandate irrespective of the increase or decrease of the number of members of the Stock Exchange Association and may be revoked only in corpore, by the General Meeting by a majority of 2/3 of the number of members of the Stock Exchange Association, under the terms of this paragraph.

When the numbers of members of the Stock Exchange Association becomes less than 5, due to the withdrawal or revocation of the authorisation of negotiation on the Stock Exchange, the General Inspector of the Stock Exchange shall inform NSC, which shall decide, taking into account the situation of the securities market, the interests of the issuer and the investors, the continuation of the functioning of the respective Stock Exchange or its dissolution.

Art. 56. The members of the Stock Exchange Committee, appointed in accordance with Art.55, must be validated individually by NSC before beginning the exercise of their mandate. In case of an invalidation of an appointed member, another person shall be designated according to Art.55, paragraph 2. The members of the Stock Exchange Committee must be Romanian citizens domiciled in Romania, at least 30 years old, must have knowledge of economics, finance, banking, business or law and at least a 5-year professional practice in these fields. They must have a good civic reputation and moral integrity.

The members of the Stock Exchange Committee may not hold any public office, except for that of teaching in universities or scientific research in the field, and may not be members of the Committee of another Stock Exchange.

In any situation of incompatibility or if there is a legal impediment, definitive impossibility of exercising the mandate, or in case of vacancy of the office, the Stock Exchange Association or, as the case may be, the entitled member, shall appoint another person who shall be validated by NSC to exercise the mandate until its expiry.

Art. 57. After their validation, the members of the Stock Exchange Committee shall elect, out of themselves, a President and two Vice-Presidents. The President shall be the lawfully representative of the Stock Exchange as a public institution; in case of unavailability of the President, the Stock Exchange shall be lawfully represented by the oldest of the two Vice-Presidents.

The Stock Exchange Committee shall hold meetings at least once a month and deliberate validly in the presence of the majority of its members.

The meetings shall be chaired by the President and in his absence, by one of the Vice-Presidents. The decisions shall be adopted by majority vote of the members of the Stock Exchange Committee, each member having one vote.

Art. 58. The Stock Exchange Committee shall have the following responsibilities:

1. to appoint and dismiss the General Manager of the Stock Exchange;
2. to adopt and modify the regulations regarding the organisation and functioning of the Stock Exchange;
3. to adopt and modify the regulations regarding the Stock Exchange operations;
4. to adopt the draft budget of the Stock Exchange and to submit it to the Stock Exchange Association for approval;
5. to submit to the Stock Exchange Association, for approval, the balance sheet together with the auditors' report;
6. to settle the levels and limits of the commissions and fees of the Stock Exchange;
7. to determine the guarantees which must be constituted by the intermediaries operating on the Stock Exchange and their agents, in order to assure the full liquidation, on their maturity, in accordance with the kind of operations, of all the transactions with securities negotiated on the Stock Exchange, as well as the utilisation and constitution regime of such guarantees;
8. to supervise compliance with the provisions of the law, of the NSC regulations and of the Stock Exchange regulations by the intermediaries operating on the Stock Exchange and their agents, and by the whole staff of the Stock Exchange, disposing the appropriate measures.

Art.60. The administration of the Stock Exchange shall be entrusted to the General Manager, appointed for a 5-year mandate by the Stock Exchange Committee.

The appointment and, as the case may be, the dismissal of the General Manager shall be decided by a majority of 2/3 of the votes of all the members of the Stock Exchange Committee and shall come into effect on the date of their confirmation by NSC.

The General Manager of the Stock Exchange shall have the status of a public servant with attributions involving the exercise of public authority.

The eligibility conditions for the office of General Manager are those set out in Art. 56, paragraph 2, completed by those provided by the law regarding public servants.

The General Managers, their spouses or their relatives according to the meaning of Art.2, paragraph 1, letter g) hereof may not be either shareholders in a securities company, or administrators, members of the management or securities agents of such a securities company; in the meantime, in relation to such persons, they must not be related persons, according to the meaning of Art.2, paragraph 1, letter g).

Art. 61. If he is temporarily unavailable, the General Manager shall be substituted in accordance with the regulations regarding the organisation and functioning of the respective Stock Exchange.

In the case of incompatibility, legal impediment, definitive impossibility of exercising the mandate or vacancy of the office, the Stock Exchange Committee shall appoint another person to be confirmed by NSC for exercising the function of General Manager for the remaining period of the mandate.

Art. 62. The General Manager shall be the legal representative of the Stock Exchange as a legal person, before the State authorities and in its relations with Romanian and/or foreign natural and legal persons.

The General Manager shall have and exercise the competences of administering the Stock Exchange, including those of hiring the staff, the organisation and functioning of the respective Stock Exchange, issuing the appropriate acts and taking the appropriate measures for the observance and application of the NSC norms regarding the Stock Exchanges and the Stock Exchange regulations.

The documents containing data and information regarding the Stock Exchange, the statements, communications, attestations, applications, contestations, notifications, waivers and any other similar acts, executed in the name of the Stock Exchange as a legal person, must be signed by the General Manager.

The documents ascertaining situation or facts regarding the Stock Exchange, rights or equity commitments of the same and bearing the signature of the General Manager shall have the probational force of an authentic act, and their content may be denied only by the procedure of proving them false.

Art. 63. The staff employed by the Stock Exchanges shall have the legal status of public servants.

Art. 64. The Stock Exchange shall acquire legal personality on the date of the confirmation by NSC of the General Manager of the respective Stock Exchange.

The suspension of the activity of a Stock Exchange or its dissolution may be decided only by NSC.

By its decision of dissolution of a Stock Exchange, NSC shall also appoint the liquidators, which may conclude only the legal acts and carry out only the operations necessary for the equity liquidation of the dissolved Stock Exchange. The net proceeds of the liquidation shall be taken over by NSC and designated to the purposes settled by the present law, including another Stock Exchange to be established.

The legal personality of the dissolved Stock Exchange shall cease on the date of submittance of the liquidation balance sheet to NSC.

Art. 65. Stock Exchange operations means all the negotiations made on the Stock Exchange during the Stock Exchange sessions and registered in accordance with the regulations regarding the Stock Exchange operations.

Any Stock Exchange operation regularly made and registered shall be an act of trade and shall create a valid liability to which no exception of gaming may be opposed.

The regime of the Stock Exchange operations in respect of the elements, form, mechanism, effects, terms, liquidation and registration shall be settled, by categories, by the regulations regarding the Stock Exchange operations.

Art. 66. Only the securities companies which are members of the Stock Exchange Association may negotiate and conclude transactions on a Stock Exchange, through their regularly authorised agents.

For the purpose of issuing the authorisation of negotiation on a Stock Exchange, NSC shall verify the compliance of the securities company with the conditions settled by NSC regulations and with the specific provisions of the regulations of the Stock Exchange for which the authorisation is requested, as well as the compliance with the following conditions:

1. to have a valid authorisation as a securities company and perform only the activities set out in the authorisation;
2. not to have lost the membership of a Stock Exchange Association for reasons chargeable to it and not to be the successor of a securities company which lost the membership of a Stock Exchange Association for reasons chargeable to it;
3. none of its main shareholders, members of the Board of Directors, management or securities agents held any of these positions in a securities company which lost the membership of a Stock Exchange Association for reason chargeable to it;
4. the companies or persons set out at letter c) have not been declared bankrupt, and none of the persons set out at letter c) has suffered penal convictions.

In the cases set out in the previous paragraph, NSC shall also apply the sanctions provided by its regulations, if considered necessary.

If a securities company reaches the situation of non-compliance with the conditions provided by paragraph 2 due to circumstances occurred after the issue of the authorisation of negotiating on the Stock Exchange, circumstances chargeable or not to the respective securities company, the procedure described in paragraphs 3 and 4 shall be followed.

When the situations set out in paragraph 3 and 5 are caused by an agent of the securities company authorised to negotiate on the Stock Exchange his access to the Exchange shall be forbidden and his authorisation suspended in accordance with the same paragraphs and NSC shall order the removal of the respective agent and the employment of another agent, the prevention from access ceases and the suspension of the authorisation is lifted on the date of removal of the respective agent.

Art. 67. The authorisation of negotiating on the Stock Exchange entitles the securities company to negotiate and conclude any category of transaction permitted and performed in accordance with the respective Stock Exchange regulations, provided that no exclusions or limitations are expressly stipulated in the authorisation and the procedures established by the Stock Exchange regulations contain appropriate provisions for the investors' protection, especially by transparent and equitable transactions, conditions as good as possible for its clients, avoiding situations of conflict of interests, and preventing activities increasing the benefit of the intermediaries to the clients' detriment.

Art. 68. If the authorisation of dealing does not nominate the securities agents who perform Stock Exchange operations in the name and on behalf of the authorised securities company or if the authorised company removes an agent and hires another one, the authorised company must get the approval of NSC for each agent hired by it and ask for his registration on the Stock Exchange records.

The General Inspector and the General Manager of the Stock Exchange, in exercising their duties, may forbid the access of the securities agents to the Stock Exchange if there is non- compliance with the provisions of the law, of NSC regulations and with the provisions of the Stock Exchange regulations.

Art. 69. Cessation of membership of the Stock Exchange Association by giving up the authorisation of dealing or by its revocation by NSC shall not affect the obligations resulting for the respective securities company from the transactions concluded on its own behalf or on behalf of its clients.

Art. 70. During the period of suspension by NSC of the activity of a Stock Exchange, in accordance with Art.64, no more transactions with securities may be negotiated, and those already concluded shall be liquidated on the settlement date. Beginning with the date of the decision in respect of the dissolution of a Stock Exchange in accordance with Art.64, no more securities transactions may be negotiated and the negotiation orders received by intermediaries and not executed up to that date shall have no more legal power, and shall entail the restitution of the deposits of securities and money and, respectively, of the received commissions; the transactions concluded up to that date shall be liquidated on their settlement date, the intermediaries being bound in accordance with the contracts concluded with their clients.

Art. 71. Only securities which are listed on the Stock Exchange shall be accepted as the object of the Stock Exchange transactions. The transactions disposed by court decisions and those determined by regulations of NSC shall be excepted from this rule.

Stock Exchanges may accept for listing only securities registered with the Securities Registration Office.

The acceptance for listing of an issue of securities shall be extended to all the securities of the same type or class of the respective issuer, which are in circulation on the registration date.

The securities mentioned in Art.3, paragraphs 1 and 3 shall be accepted for listing de jure, in the receipt of the respective issue document by the Stock Exchange.

The acceptance of all the other securities registered with the Secu rities Registration Office shall be at the Stock Exchange's discretion.

The conditions and procedure of acceptance for listing shall be settled by the Stock Exchange regulations approved by NSC, adapted as much as possible to the international ones.

Art.72. The securities listed on the Stock Exchange shall be withdrawn from listing upon the removal of their registration with the Securities Registration Office.

The Stock Exchange Committee may order withdrawal from listing if it considers that an orderly market of the respective securities can no longer be maintained or reestablished.

The decision bearing on withdrawal from listing on the Stock Exchange of shares offered publicly or of other securities conferring rights on the issuer shall be made with the approval of NSC.

Art. 73. The shares or other securities incorporating rights on the issuer and listed in the Stock Exchange may be negotiated only by the companies which are members of the Stock Exchange Association and only within the Stock Exchange.

The securities, other than those mentioned in paragraph 1, listed in a Stock Exchange, may be dealt with also in unsupervised markets, but by securities companies other than those which are members of the respective Stock Exchange.

The companies which are members of the Stock Exchange Association must notify the Stock Exchange in respect of all their transactions with securities.

Art. 74. The General Manager of the Stock Exchange may suspend the negotiations regarding the securities of a certain issuer if, due to lack of appropriate information on the issuer or the respective securities, or due to other sound reasons, he considers that maintenance of an orderly market for such securities is impossible.

Art. 75. All the transactions in listed securities effected by authorised companies shall be mandatorily settled through the Stock Exchange payment system, provided that no other centralised securities settlement and depository system is in operation.

The settlement procedures shall be established by the Stock Exchange regulations.

Art. 76. For the transactions having as object securities declared stolen, lost or destroyed, the following rules shall apply, as the case may be:

a) if negotiation takes place before the publication of the theft, loss or destruction, the buyer may claim the reimbursement of the price of securities by its intermediary; if the intermediary declares the seller to have issued the order, he will be discharged of liability;

b) if negotiation takes place after the publication of the theft, loss or destruction, the intermediary shall be liable for the reimbursement of the value of the negotiated securities.

The intermediary shall be entitled to regress against the seller, pur su ant to the common law, and the assessment of the good faith shall be made in accordance with the rules of maximum diligence in business.

The rules set out in paragraphs 1 and 2 shall be also applied in respect of the faked securities, the publication having as object the declaration of the fake.

Art. 77. The disputes between intermediaries, securities companies and their agents, between agents and between clients and interme dia ries may be submitted to the Stock Exchange Arbitration Chamber for settlement.

NSC shall adopt regulations regarding the procedure of the Arbitration Chamber.

In order for the litigation to be submitted to arbitration, an arbitration convention of the parties is necessary, either in the form of a compromise clause or in the form of a compromise.

In the absence of an express contrary stipulation in the arbitration convention, the parties shall be deemed as having accepted the Procedure Regulations of the Arbitration Chamber.

Art. 78. The parties may apply to have an ad-hoc arbitration, and the arbitral convention must contain, subject to the sanction of nullity, provisions regarding the composition of the arbitration board and the arbitration procedure. By express clauses in the arbitral convention, the parties may vest the arbitral board with the settlement of the litigation (in equity) and may release it from justifying the arbitral award, either in the case of institutional arbitration or ad-hoc arbitration.

The provisions of the Fourth Book of the Civil Procedure Code shall be applied both to the arbitration organised by the Arbitration Chamber and to ad-hoc arbitration.
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Art. 79. Investors shall be entitled to access to certain, correct, sufficient information, made public at the right time, in respect of securities, their issuers and the issuers' market activity.

NSC shall work out appropriate regulations in order for the investors to have equal access to the above mentioned information and shall impose their observance by intermediaries and other participants in the market.

Art. 80. The minimum information to be included in the prospectus of a securities offer, as well as the supplementary information required by NSC if necessary, referring either to issuers, securities or holders of securities, shall be established by the instructions adopted by NSC, and if that such information is not subject to legal obligations for publication, the investors shall have access to them under the terms established by NSC regulations.

Art. 81. Issues of shares or other securities offered publicly, registered with the Securities Registration Office shall distribute an annual report to the investors on their securities, by publication and by other appropriate means, on a date prior to the General Meeting of the Shareholders.

Art. 82. The annual report must contain the activities of such an issuer, together with the financial statements, worked out on the basis of the application of generally accepted accounting principles and verified by external independent auditors registered with NSC.

The minimum content, the form and term of publication of the annual report shall be settled by NSC.

The issuers of securities registered with the Securities Registration Office shall be obliged to draft, present, distribute and publish uncer tified semestrial reports, within 45 days of the end of the semester.

NSC may regulate the drafting, presentation, distribution and publication of certain quarterly reports and financial statements.

Art. 83. The issuers of shares or other securities offered publicly, re gistered with the Securities Registration Office must inform the inves tors immediately in respect of the occurrence of important events.

For the purpose of the present law, important event means the occurrence of any circumstance regarding one or more issuers of securities or one or more issues of securities or types of securities, which, once made public, could significantly influence the price or any other aspect of the evolution of the respective securities in the market.

NSC shall establish the rules to be followed for the distribution of such an information.

If such an information cannot be given immediately without the risk of certain significant adverse consequences for the issuer, NSC shall take the necessary measures in order either to maintain an orderly market of the respective securities, or to suspend their negotiation until such a publication can be made.

Art.84. As long as the information referred to in Art.82 is not communicated to the investors, the information shall be privileged and/or confidential.

Art. 85. For the purpose of the present law, any person shall be considered as a holder of confidential information, if:

a) he/she has access to the information:

1) is a member of the management or supervision structure or any similar entity of the issuer;

2) during his/her employment by the issuer or during his/her professional activity as the issuer's servant;

3) is an investor in the issuer's securities;

b) he/she has access to such information as a result of a position or relationship identical to those set out at letter a) with a legal person holding such information;

c) he/she obtained such information from any of the persons above mentioned or otherwise.

Art. 86. Any person in a position of holding confidential and/or privileged information may neither sell the respective information nor make it public or facilitate its publication to his/her own advantage or to the advantage of third parties.

NSC shall issue regulations regarding the procedure of implementing the interdictions in respect of illegal utilisation of confidential and/or privileged information.

Art.87. NSC shall establish the content and form of the transactions records kept by all the securities companies, as well as their utilisation, inclusively by information distributed clearly and on time to investors and Stock Exchanges.

NSC may delegate to the Stock Exchange duties regarding the application and enforcement of these regulations on its members.

NSC may delegate to the Stock Exchange duties regarding the transactions of the securities companies which are not members of the Stock Exchange.

Art. 88. Any person who, acting directly or indirectly, severally or in concert and in connection with third parties, acquires or holds and under the provisions hereof becomes the holder or the owner of some shares bearing voting rights, or of some securities conferring rights to such shares which, cumulatively, represent 5% or more of the total voting rights of the respective issuer pursuant to Art.2, paragraph 1, letter c), shall notify NSC and, if the securities are listed on a Stock Exchange, shall also inform the respective Stock Ex change, within 2 days of the date of the conclusion of the transaction.

The natural or legal person referred to in paragraph 1 shall inform NSC and, if necessary, the Stock Exchange, about any transaction regarding the acquisition or disposal of any securities of an issuer, as long as its interest represents 5% or more of the voting rights, as well as if, as a result of such a transaction, such natural or legal person ceases to hold 5% of the voting rights in the issuer's General Meeting.

NSC shall settle regulations regarding the supervision of reporting and publicity requirements.

Art. 89. Any person who, directly and alone or in concert and in connection with other persons, intends to acquire securities subject to the provisions hereof which, together with those already held or owned, would confer a control position on the issuer, shall make a public offer in order to acquire these securities.

Any person who, directly and alone or in concert and in connection with other persons, intends to acquire securities subject to the provisions hereof which, together with those already held or owned, would confer on that person or group of persons a majority position in the issuer's General Meeting, shall make a public offer for the purchase of all the shares of the respective issuer still in circulation.

Art.90. Any natural or legal person which intends to acquire securities by means of a public offer in accordance with the provisions of Art.89 shall apply for a prior authorisation from NSC.

NSC shall issue the authorisation subject to the submittance of guarantees as to the observance by the offeror or offeror of an equal treatment for all the shareholders of the issuing company.

NSC shall establish the criteria which must be observed for getting the authorisation and the procedure to be followed for the execution of the takeover applications.

If the offers set out in the previous paragraph relate to the demand of listed securities, they shall be executed on the Stock Exchange.

Art. 91. NSC shall issue regulations regarding the domain, content and presentation form of the issuer's information, as well as publicity in respect of the takeover conditions, the guarantees constituted by or on the offeror's account, the right to a counteroffer, as well as provisions regarding the oversubscription, failure or withdrawal of the takeover applications, the specific conditions in accordance with which these are to take place, as well as other administrative aspects.
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Art. 92. The financial statements of all the issuers of securities being subject hereto, as well as of any legal person being subject to authorisation, supervision or control by NSC shall be worked out in accordance with the accounting principles and specific requirements settled by NSC regulations.

Art. 93. The annual financial statements shall be verified and certified by independent external auditors.

The independent external auditors must register themselves with NSC.

Art. 94. NSC shall establish incompatibilities and the conditions to be fulfilled for the registration of independent external auditors, drafting norms of conduct for such auditors and defining their responsibilities in rendering specific services, including provisions regarding admini strative sanctions of the auditors, suspension in case of breaches of the law and regulations or the provisions contained in the norms of conduct and professional ethics, and cancellation of their registration with NSC.

The issuers and other legal persons subject to authorisation, supervision and control by NSC may contract freely the professional services of the auditors lawfully registered with NSC.
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Art. 95. Performance of professional advisory services concerning investments in securities, to the public, by any natural or legal person, shall be made only subject to an authorisation granted by NSC.

NSC shall establish the conditions to be fulfilled for getting the authorisation.

Art. 96. Authorised performance of advisory services concerning investments in securities shall include securities analysis, portfolio selection services, securities rating services, as well as publication activities.

Performance of such services shall exclude acceptance, processing, execution and settlement of clients' orders regarding the acquisition and disposal of securities, including holding money availabilities or securities on the clients' account.

Art. 97. NSC, by its regulations regarding advisory services, shall:

1. formulate rules of conduct and define levels of professional training for rendering such services;
2. stipulate penalties, including suspension and cancellation of the respective authorisation, in case of non-compliance with the legal requirements, with the provision of NSC regulations or with the rules of conduct and professional ethics;
3. settle systems and procedures regarding reporting, inspection and supervision of the investment advisers.

Art.98. Settlement of securities transactions, safe keeping of securities, transfer of ownership and other registration and payment services regarding securities, as well as any other activities related to them must be performed by specialised legal persons.

Establishment of such legal persons shall be subject to prior authorisation by NSC, after the examination of the company's Contract, Statutes and internal regulations. Any subsequent changes made to the constitutive documents or internal regulations must be approved by NSC.

Securities settlement and collective depository activities shall be accomplished under the supervision of NSC.

Art.99. The legal persons having as business objectives the activities set out in Art. 98, paragraph 1 shall be incorporated as joint-stock companies.

The minimum subscripted capital and the minimum paid up capital of the securities settlement and collective depository companies shall be settled by NSC regulations and shall be divided exclusively into registered shares.

Banks and other institutions of credit regulated by Law no.33/1991, Stock Exchanges, authorised securities companies, insurance companies, companies issuing securities regulated hereby, as well as other legal persons settled by NSC may be shareholders in securities setting off and depositing companies.

NSC may establish maximum percentages of shareholding in a securities settlement and collective depository company, both for each holder and for the same sector of activity.

Art. 100. Securities settlement and collective depository companies shall adopt a management structure so that to ensure administrative and operational independence against the potential competing interests of the shareholders of the respective company.

Art. 101. Securities settlement and collective depository companies shall carry out the operations with the deposited securities through compensating and depository agents, in accordance with the contacts concluded with them.

Stock Exchanges, securities companies, banks and other credit institutions regulated by Law no.33/1991, insurance companies, as well as any other legal person authorised by NSC for this purpose may act as settlement and collective depository agents.

Art.102. The internal regulations and the operational procedure shall insure the appropriate levels of confidentiality and protection of data regarding the investors' accounts.

The securities deposits opened on behalf of the compensating and depository agents must be recorded in such a way that distinction can be made between the securities held on the setting of and depositing agent's account and those held on the account of third parties.

Compensating and depository agents shall have the obligation of maintaining individualized sub-account of securities held on behalf of their clients. The identity and structure of these accounts shall be kept strictly confidential, with the exception of the express requests formulated by judiciary authorities or in case of injunctions or ordinances of NSC.
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Art. 103. Infringement of the provisions of the present law and of the regulations adopted in respect of its application shall be sanctioned by disciplinary or administrative action, as the case may be, by NSC.

Art.104. The following deeds shall constitute contraventions (or admi nis trative offenses), unless, according to the penal law and to the circumstances under which they were committed, they are penal trespasses:

1. non-observance of the provisions regarding the methods of effecting public offers set in Art.24, paragraph 3 and Art.25;
2. non-observance of the provisions of Art.29, paragraph regarding the significance of the decision of authorisation, and of granting exemption for public offers of securities;
3. negotiating, claiming and sharing of commissions in respect of inter mediation of securities other than as provided by the NSC regulations;
4. keeping of records by the securities companies other than as provided by the law or the norms adopted in respect of its application;
5. non-compliance with the certification requirements in respect of the financial statements, in accordance with Art.83, or their certification by unauthorised persons;
6. performance without authorisation of any activities in respect of which the present law stipulates the obligation of obtaining an authorisation from NSC;
7. non-compliance with the regime of privileged and confidential information settled by the law and NSC regulations.

1. fine;
2. withdrawal of the authorisation;
3. cancellation of the authorisation;
4. temporary or definitive interdiction on natural or legal persons; of intermediating securities, for one, more or all the categories of operations included by this activity.

Withdrawing or canceling the authorisation shall be applied cumu latively with the temporary or definitive interdiction of intermediating securities.

Art. 106. Commission of the contraventions set out in Art.104 shall be ascertained by the agents empowered by NSC for this purpose.

NSC may delegate to the agents mentioned in paragraph 1 only the right to order fines, under the terms and within the limits stipulated by its regulations.

Upon receipt of the ascertaining documents from its agents, NSC may order extension of the investigation, may take conservation measures and hold hearings of the related persons.

The sanction decision shall be signed by President of NSC and shall come in full force and effect on the date of its notification to the penalized person.

Art. 107. The personal and factual circumstances under which the deed is committed and the perpetrator's conduct shall be taken into account when determining the penalty.

In case of repeated perpetration, within 3 years' time, of any of the contraventions set out in Art.104, or in case of commission of the trespass by a person convicted for committing any of the contraventions set out in Art.104, during a 3 years' period preceding its ascertainment, the maximum fine provided for the last civil trespass shall be also applied.

In case of commission of two or more contraventions which are to be penalized, the maximum fine provided for each of them shall be also applied.

For the contraventions committed under the terms set out in paragraphs 2 and 3, application of the provisions of paragraph 1 shall be done only in respect of the settlement of the period of interdiction of exercising intermediation of securities.

Art. 108. The levels of fines shall be as follows:

1. an amount between 0.1% and 1% of the paid capital, depending on the gravity of the deed committed;
2. an amount between 0.1% and 1% of the paid capital for each day exceeding the terms settled by the law or NSC regulations for the presentation, publication, registration or reporting of statements, information and documents;
3. an amount between 0.1% and 3% of the paid capital for working out and delivery of false, incomplete or incorrect financial statements or other reports;
4. an amount between the half and the whole value of the transaction or between the whole or the double amount of the profit obtained or the loss avoided through the transaction accomplished by committing the civil trespass set out in Art.104, letter g), the biggest amount having to be applied, when the double of the obtained profit or avoided loss is bigger than half of the value of the transaction.

Art. 109. In case of fine, the provisions of Art.25 and 26 of Law no.32/1968 regarding the ascertainment and sanction of contraventions shall not be applied.

Art. 110. NSC may penalize with written or published admonition the deeds committed by fault which did not cause significant equity damages or prejudices of other nature to the natural or legal persons being subject to the provisions hereof or to investors' protection, unless such deeds are committed under the terms of Art.107, paragraphs 2 or 3.

Art. 111. On cancellation of the authorisation, the interdiction of exercising intermediation of securities for a 5 years' period shall be also applied.

Art.112. When penalizing legal persons, NSC may also apply equal or lesser penalties, in respect of the respective civil trespass, to the natural persons who, as administrators, legal representatives or exercising, de jure or de facto, management functions or, as professionals in intermediation of securities or other activities regulated hereby, are liable for the respective civil trespass because, although they could and might prevent its commission, they failed to do so.

The natural persons referred to in paragraph 1 shall also be kept liable for making up the equity prejudices caused by the deed constituting a civil trespass. If the deed is chargeable to more than one person, they shall be kept liable jointly for the recoupment of the caused prejudice.

Art. 113. The contraventions set out herein shall be prescribed after 3 years of the date the deed is committed.

Art. 114. Intermediation of securities without an authorisation from NSC, performed by administrators, managers of commercial companies and any natural persons, shall constitute penal trespass and shall be punished with three months to two years prison or fine.
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Art. 115. Within 120 days of its establishment, NSC shall work out and apply the regulations necessary in order to implement the provisions hereof.

Art. 116. The first members of NSC shall be appointed within 30 days of the enforcement of the present law; the President shall be appointed for a 5-year mandate, the Vice-President for a 4-year mandate, and the other 3 members, according to the descending order of their age, for 3, 2 and 1 years, respectively.

Art. 117. NSC is authorised to update all the maximum or minimum levels of the amounts stated in national currency referred to in the present law, including, but without limitation, the minimum required capital, the guarantees and fines, in correlation either with the development of the securities market, or with the development of the general conditions predominant in the economy.

The new levels of the minimum required capital shall be applied to all companies applying for authorisation, beginning with the date of the last updating made by NSC. Those carrying out activities pursuant to previously issued authorisations shall be granted a period of grace of one year maximum.

Art. 118. Drafting, presentation and publication of the financial statements in accordance with the accounting principles and their submittance to external independent auditors on the basis of the uniform control standards, shall be mandatory for all issuers of securities which are subject to the regulations hereof and for all the other legal persons which are subject to the supervision or control by NSC. The financial statements so drafted shall be presented and published yearly, or at other intermediary terms, immediately after the official adoption of the respective principles and standards by the regulating authority in the accountancy field and their mandatory application being established by NSC according to the duties of regulation and supervision hereby assigned to it.

Art. 119. Until supervised trading systems, outside Stock Exchanges, are established, assuring properly for the investors, according to NSC's opinion, transparent and equitable market conditions for the securities which are not listed on a Stock Exchange, NSC shall decide if the shares or other securities incorporating or conferring the right to a claim on the issuer, registered with the Securities Regis tration Office in accordance with Art.21, must or must not be listed on a Stock Exchange.

Art. 120. Until the enforcement of the law regarding remuneration of the members and staff of NSC and Stock Exchanges, the remune ration system stipulated by Law no. 40/1991, annexes 4 and 6 of the respective law, shall be applied, by assimilation.

Art. 121. On the date of establishment of NSC, the Agency for Securities shall cease its activity. The activity of the Agency and its staff shall be taken over by NSC.

Art. 122.The present law shall come in full force and effect 30 days after the date of its publication in the Official Gazette of Romania.

On the date of its enforcement, any other contrary provisions shall be abrogated, with the exception of those stipulated in paragraph 3.

The existing legal provisions shall remain in force until the application of the regulations provided by Art.115 hereof.

This law was adopted by Senate in its meeting held on June 20, 1994, in accordance with the provisions of Art.74, paragraph 1, of the Constitution of Romania.

This law was adopted by the Chamber of Deputies in its meeting hold on June 21, 1994 in accordance with the provisions of Art.74, paragraph 1, of the Constitution of Romania.