ROMANIA Law and Practice Contributed by: Sergiu-Traian Vasilescu, Luca Dejan, Bogdan Rotaru and Ana-Maria Bută, VD Law Group
to offer low-cost, user-friendly platforms – often via mobile apps – that appeal to younger, tech- passionate investors. 3.3 Issues Relating to Best Execution of Customer Trades In Romania, ensuring best execution for custom - er trades under the EU’s MiFID II rules remains a challenge, especially with market fragmenta - tion and varying liquidity across trading venues. Firms must prioritise factors like price, speed and costs, but conflicts of interest arise when routing orders to affiliated brokers or favouring venues offering rebates. While banks and bro - kers use automated tools to monitor execution quality, smaller players often lack resources to analyse data effectively. Regulators, like the ASF, push for transparent execution policies and regular audits, but gaps persist – particu - larly in crypto markets, where price volatility and opaque platforms complicate compliance. Bal - ancing client trust with operational costs keeps this a tightrope walk for local institutions.
protection against abusive clauses. Consumer loans must disclose the APR, and individuals have a 14-day withdrawal right. For small businesses (SMEs), loans are governed by general contract law and banking regulations but lack the strict protections applicable to con - sumer credit. Interest rates and fees are negotia - ble, and banks assess credit risk based on finan - cial viability. SMEs often rely on collateral and personal guarantees, and government-backed programs like “IMM Invest” or “Start-Up Nation” offer financial support. Unlike consumers, SMEs cannot challenge unfair contract terms under consumer protection laws. For large businesses and corporations, loan agreements are highly flexible, governed pri - marily by contract law and banking regulations. There are no caps on interest rates, and financ - ing options include loans, structured credit and capital market instruments. 4.2 Underwriting Processes In Romania, underwriting processes vary based on the type of borrower, with consumer loans being the most regulated, while SME and cor - porate loans allow for more flexibility. For individuals, regulations like OUG 50/2010 and OUG 52/2016 mandate a creditworthiness assessment, checking income (via ANAF), credit history and debt-to-income ratios (capped by BNR). Mortgages require collateral evaluation, and interest rates are risk-based, but within regulatory limits. For SMEs, underwriting is less standardised, but includes financial statement analysis, credit history (CRC), collateral evaluation and busi - ness viability checks. Government-backed pro -
4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities
There are significant differences in how fiat cur - rency loans are regulated in Romania, depend - ing on whether the borrower is an individual, an SME or a large business. These differences stem from consumer protection laws, banking regula - tions and commercial contract principles. For individuals (consumers), loans are strictly regulated under OUG 50/2010 for general con - sumer credit and OUG 52/2016 for mortgage loans. These laws ensure transparency, inter - est rate caps, the right to early repayment, and
726 CHAMBERS.COM
Powered by FlippingBook