ROMANIA Law and Practice Contributed by: Sergiu-Traian Vasilescu, Luca Dejan, Bogdan Rotaru and Ana-Maria Bută, VD Law Group
2.4 Variations Between the Regulation of Fintech and Legacy Players The regulation of fintech industry participants in Romania presents notable differences when compared to the regulation of traditional, leg - acy players such as banks and other financial institutions. These differences arise from the nature of the business models, the innovation- driven approach of fintechs, and the regulatory frameworks that are either specifically tailored to emerging technologies or based on established 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 companies may not require a banking licence. For instance, PSPs can obtain an EMI licence or a payment institution licence from the BNR while other payment-related service providers may operate without or under a third party’s licence. There are several key differences between fin - tech and legacy players. • Flexibility: fintech companies benefit from more flexible regulatory frameworks, par - ticularly when compared to the stringent requirements imposed on traditional financial institutions. • Innovation: fintechs are more agile in adopt - ing new technologies and innovations, sup - ported 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 obligations. • Consumer protection: both sectors are bound by consumer protection laws like GDPR, but fintech companies, particularly those involved with digital assets, face emerging regulatory frameworks (like MiCA) to safeguard con - sumer interests. While fintechs benefit from lighter prudential rules and regulatory flexibility, they face evolv - ing obligations in areas like crypto, AI transpar - ency and AML. Legacy players remain burdened by stringent capital and governance frameworks but enjoy consumer trust through deposit guar - antees and established compliance infrastruc - tures. 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 considering regulatory flexibility for fintech companies, including innovative tech - nologies like blockchain, AI and other emerging technologies. Nevertheless, the Romanian regulatory land - scape 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, particularly financial services, within an established regula - tory framework.
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