The Romanian Financial Supervisory Authority has published the draft regulation on holding general meetings

1. DRAFT REGULATION ON HOLDING GENERAL MEETINGS OF SHAREHOLDERS IN THE CONTEXT OF THE COVID-19 PANDEMIC

The Romanian Financial Supervisory Authority (the “FSA”) has published today, 27 March 2020, the draft of regulation for implementing a series of measures in connection with general meetings of shareholders for approval of annual financial statements and of other matters which cannot be postponed,  convened (and to be held) during the state of emergency caused by COVID – 19 pandemic (the “Draft Regulation”). The Romanian version of the Regulation is available for consultation at this link. At this time, an English version of the Regulation is not available for consultation.

The Draft Regulation includes the following proposed measures:

1. If the general meeting of shareholders cannot be held in the physical presence of shareholders, the issuer will ensure that shareholders can vote by correspondence or other electronic means, in case the issuer uses such electronic means, in accordance with the law. Note that voting by correspondence, as well as via electronic means of data transmission is already available to issuers pursuant to Law 24/2017 on issuers and operations with financial instruments, as well as FSA Regulation no. 5/2018 on issuers and operations with securities.
2. In order to allow the issuer’s to switch exclusively to holding meetings by correspondence or using other electronic means (without holding a physical meeting, even if the possibility to hold one was included in the convening notice), the issuers have to publish a current report (in accordance with the applicable legal provisions) indicating the impossibility to hold a general meeting with physical participation of shareholders. Such report has to be published no less than three days before the deadline for the submission of the powers-of-attorney/votes via correspondence for the relevant meeting, as indicated in the convening notice. Such provisions will also apply to general meetings convened prior to the enactment of the Draft Regulation, provided that the deadline for the submission of the powers-of-attorney/votes via correspondence is at least three days later than the date of the enactment.
3. The issuers which will benefit from the provisions of the Draft Regulation will not be required to reconvene the general meetings or to amend the convening notices which were already published.
4. Once enacted, the provisions of the Draft Regulation will apply to issuer’s who have their registered headquarters in Romania and whose shares are admitted for trading on regulated markets or are traded on a multilateral trading system.

Comments and observations regarding the Draft Regulation can be sent until 29 March 2020 (inclusive) at reglementari.siif@asfromania.ro.

1. ESMA GUIDANCE ON FINANCIAL REPORTING DEADLINES IN LIGHT OF THE COVID-19 PANDEMIC

In addition to the Draft Regulation, we also expect the FSA to issue in the coming days additional regulatory proposals on applying forbearance measures on the deadlines for publishing financial reports which apply to listed issuers under the Transparency Directive, in accordance with the European Securities and Markets Authority (“ESMA”) public statement on the implications of the COVID-19 pandemic on such deadlines. ESMA’s public statement is available for consultation at this link.

Forbearance measures recommended by ESMA to national supervisory authorities include:

1. delaying the four-months deadline for annual financial reporting referring to a year-end occurring on or after 31 December 2019, but before 1 April 2020 for an additional period of two months; and
2. delaying the three-months deadline for half-yearly financial reports, referring to a reporting period ending on or after 31 December 2019, but before 1 April 2020 for an additional period of one month.

National supervisory authorities are encouraged to apply a risk-based approach in the exercise of their supervisory powers in connection to the publication deadline of the financial reports. At the same time, to the extent any forbearance measures are to be applied, issuers are expected to inform the supervisory authority and the market of the delay, the reasons for such delay and to the extent possible the estimated publication date.