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Municipalities in financial difficulties may benefit from a more lenient enforcement regime

Amendment to the insolvency procedure relating to municipalities

The legislation regulating the insolvency procedure of municipalities has been amended (the Amendment). The Amendment clarifies that a Government Ordinance1 regarding the enforcement of payment obligations of public institutions established by enforcement titles2(GO 22) does not apply to those municipalities in a declared financial crisis or which are subject to insolvency. This means that banks seeking to pursue municipalities for repayment of sums due under contract may face difficulties and delays in doing so, since there are various grace periods granted by this legislation (or which can be granted by a court). The Amendment was, however, introduced by an emergency Government Ordinance, which means that it is subject to the subsequent approval of a law (which can confirm, amend or reject the ordinance).

RASDAQ market to be closed down

Unlike the Bucharest Stock Exchange, the RASDAQ market is an unregulated market and, in recent years, there have been several attempts to clarify its legal status. To this end, the Romanian Parliament has passed a new law (the Law)3 which entered into force on 27 October 2014 pursuant to which all activities on the RASDAQ market will cease within 12 months of the date its entered into force. Further, the Law provides a 120-day period for the shareholders of the companies operating on the RASDAQ market to meet and decide whether the company will continue its activity on a regulated market (eg the Bucharest Stock Exchange), or on an alternative trading system or whether they will exit the company.

Amendments to the Capital Markets Law

Romanian Capital Markets Law No 297 of 2004 has been recently amended. Among other changes, the threshold for holding shares in a market operator (eg the Bucharest Stock Exchange) was increased from 5% to 20% (effective from 9 January 2015). Secondary legislation has not yet been amended to reflect this change (therefore there are a number of inconsistencies). The amendments were also effected by an Emergency Government Ordinance and, as noted above, may be amended.


1. No 22 of 2002
2. An enforcement title is a document which allows a creditor to proceed to enforcement with minimal court proceedings.
3. Law No 151 OF 2014

Legal and Regulatory Risk Note