ROMANIA Law and Practice Contributed by: Sergiu-Traian Vasilescu, Luca Dejan, Bogdan Rotaru and Ana-Maria Bută, VD Law Group
Key Similarities Both investment funds and dealers must comply with ASF regulations on transparency, reporting and risk management. If they engage in HFT, they face additional ASF over - sight and stricter risk controls under MiFID II. 7.4 Regulation of Programmers and Programming In Romania, programmers who develop trading algo - rithms are not directly regulated, but the firms that use these algorithms are strictly supervised under Law No 126/2018. While programmers do not need a licence, firms using algorithmic trading must follow risk control rules, including pre-trade limits, and testing and market abuse prevention under MiFID II and the MAR. If an algorithm manipulates the market, the firm is respon - sible, though a programmer could face legal action if misconduct is intentional. In Romania, insurance underwriting involves assess - ing and pricing risks before issuing policies, using data collection, historical claims analysis and finan - cial risk evaluation. The industry leverages insurtech solutions like AI, machine learning and big data ana - lytics to enhance accuracy, speed and risk forecast - ing. Underwriting is regulated by Law No 237/2015 and must comply with EU Solvency II, ensuring insur - ers maintain adequate capital. Consumer protection rules require transparency in risk assessment and fair treatment of policyholders, while the GDPR mandates secure personal data processing. As insurtech trans - forms underwriting, regulators focus on market stabil - ity, policyholder protection and ethical data use. 8.2 Treatment of Different Types of Insurance In Romania, insurance regulations and practices vary by segment. Life insurance and annuities, involving long-term obligations, are strictly regulated under Law 237/2015 and Solvency II, ensuring capital adequacy, risk assessment and consumer protection. Insurers 8. Insurtech 8.1 Underwriting Processes
pal traders are required to register as market makers – this depends on their trading activity. If a firm trades solely for its own account but does not provide continuous liquidity, it must still obtain authorisation from the ASF as an investment firm or credit institution, depending on its structure. If a firm actively provides liquidity by continuously quoting bid and ask prices, it qualifies as a market maker and must: • register with the BVB and sign a market-maker agreement, committing to maintain minimum quot - ing obligations, spread limits and trading volumes; • comply with ASF and BVB oversight, ensuring fair trading practices and market stability; and • follow MiFID II transparency and risk control rules, preventing market manipulation and ensuring orderly trading. 7.3 Regulatory Distinction Between Funds and Dealers Romanian regulations distinguish between investment funds and dealers (investment firms or credit institu - tions) engaged in proprietary trading, although both operate under Law No 126/2018 on Markets in Finan - cial Instruments (which implements MiFID II). Key Differences Investment funds (such as hedge funds or alterna - tive investment funds) typically trade financial instru - ments for portfolio management and investor returns, not for direct market making or client execution. They fall under ASF supervision and are regulated by the AIFMD (Alternative Investment Fund Managers Direc - tive) or UCITS (Undertakings for Collective Investment in Transferable Securities) Directive, depending on the fund type. Dealers (investment firms or banks trading on their own account) can act as market makers or proprie - tary traders, providing liquidity or executing trades for themselves. They require ASF licensing under MiFID II rules and, if they take deposits, BNR supervision.
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