ROMANIA Law and Practice Contributed by: Sergiu-Traian Vasilescu, Luca Dejan, Bogdan Rotaru and Ana-Maria Bută, VD Law Group
fair and clearly communicated to customers. The fol - lowing general principles apply. • Clarity: All charges, fees, and compensation mod - els must be clearly communicated, with no hidden fees. • Fairness: Compensation models must not mislead or disadvantage customers, and businesses must ensure that the cost structures are aligned with the services provided. • Consumer rights: Disclosures must respect con - sumer protection laws, including the EU Consumer Rights Directive and the GDPR, ensuring that consumers are informed about their rights and obli - gations. 2.4 Variations Between the Regulation of Fintech and Legacy Players The regulation of fintech industry participants in Romania presents notable differences when com - pared to the regulation of traditional, legacy players such as banks and other financial institutions. These differences arise from the nature of the business mod - els, the innovation-driven approach of fintechs, and the regulatory frameworks that are either specifically tailored to emerging technologies or based on estab - lished financial regulations. Traditional financial institutions, such as banks and credit institutions, are subject to strict licensing and regulatory requirements that have evolved over many years. These institutions are primarily regulated by comprehensive national and EU-level frameworks. Depending on their business models, fintech compa - nies may not require a banking licence. For instance, PSPs can obtain an EMI licence or a payment institu - tion licence from the BNR, while other payment-relat - ed service providers may operate without or under a third party’s licence. There are several key differences between fintech and legacy players. • Flexibility: fintech companies benefit from more flexible regulatory frameworks, particularly when compared to the stringent requirements imposed on traditional financial institutions.
• Innovation: fintechs are more agile in adopting new technologies and innovations, supported by regulatory frameworks like PSD2, the EU AI Act, and MiCA. Banks, on the other hand, face a more conservative and heavily regulated environment when integrating new technologies. • Capital requirements: traditional banks are required to maintain high capital buffers and comply with extensive liquidity and solvency requirements, while fintechs typically face lighter capital obliga - tions. • Consumer protection: both sectors are bound by consumer protection laws like the GDPR, but fintech companies, particularly those involved with digital assets, face emerging regulatory frame - works (like MiCA) to safeguard consumer interests. While fintechs benefit from lighter prudential rules and regulatory flexibility, they face evolving obligations in areas like crypto, AI transparency and AML. Legacy players remain burdened by stringent capital and gov - ernance frameworks but enjoy consumer trust through deposit guarantees and established compliance infra - structures. 2.5 Regulatory Sandbox At the time of writing, Romania does not have a formal, dedicated regulatory sandbox. However, Romania is in alignment with EU frameworks and is actively con - sidering regulatory flexibility for fintech companies, including innovative technologies like blockchain, AI and other emerging technologies. Nevertheless, the Romanian regulatory landscape does provide mechanisms that support innovation and testing of new financial services or technologies, which resemble aspects of a regulatory sandbox. This approach generally involves granting tax facilities and flexibility to businesses in certain industries, particu - larly financial services, within an established regula - tory framework. 2.6 Jurisdiction of Regulators In Romania, regulatory oversight of fintech and finan - cial services participants is activity-based, meaning regulators derive jurisdiction from the specific services or features offered by a company rather than its sta - tus as a “fintech” or “legacy player”. Each regulator
676 CHAMBERS.COM
Powered by FlippingBook