ROMANIA Law and Practice Contributed by: Sergiu-Traian Vasilescu, Luca Dejan, Bogdan Rotaru and Ana-Maria Bută, VD Law Group
6.6 Rise of Peer-to-Peer Trading Platforms
Impact on Financial Markets These restrictions limit the development of US- style commission-free trading models in Roma - nia. Brokers must rely on alternative monetisa - tion models (eg, spread markups, explicit fees), ensuring greater transparency and alignment with client interests. Under MiCA (Regulation (EU) 2023/1114), which applies from 30 December 2024, CASPs exe - cuting orders on behalf of clients are subject to rules analogous to MiFID II, including the obliga - tion to act honestly, fairly and professionally in the client’s best interest. While MiCA does not explicitly reference PFOF, any arrangement that could impair best execution or create unmiti - gated conflicts of interest may be scrutinised or prohibited by competent authorities. Impact Under MiCA CASPs facilitating order execution will need to disclose any inducements or third-party arrange - ments and ensure that such relationships do not compromise execution quality. In effect, MiCA creates a regulatory environment that is hostile to PFOF practices, reinforcing investor protec - Trading activity in Romania is governed by fun - damental principles of market integrity and the prohibition of market abuse, as set out under EU law and implemented in national legislation. The key legal framework is Regulation (EU) No 596/2014 on Market Abuse (MAR), directly appli - cable in Romania, and supplemented by Law No 24/2017 on issuers of financial instruments and market operations. The core principles include the following. tion and market integrity principles. 6.8 Market Integrity Principles
The rise of peer-to-peer (P2P) trading platforms challenges both traditional and fintech players in Romania. Traditional institutions face disinter - mediation and pressure to modernise, while fin - techs must balance innovation with compliance. Regulatorily, P2P platforms dealing in financial instruments may fall under MiFID II and Law No 126/2018, requiring authorisation. For crypto- assets, MiCA introduces mandatory licensing and conduct rules for CASPs from 30 Decem - ber 2024. P2P models raise supervisory concerns around AML, investor protection and platform account - ability, especially when decentralised or oper - ating across borders. Romanian authorities are expected to apply a functional, substance-over- form approach in assessing compliance. 6.7 Rules of Payment for Order Flow Payment for Order Flow (PFOF) is generally restricted within the EU, including in Romania, due to its potential to create conflicts of interest and impair best execution. Under MiFID II, as implemented in Romania through Law No 126/2018, investment firms must act in the best interest of clients when execut - ing orders. PFOF arrangements – where brokers receive fees from third parties (typically market makers) for routing client orders – are viewed as incompatible with this duty unless strict trans - parency and conflict management rules are met. In practice, EU regulators, including the Roma - nian ASF, follow ESMA’s guidance discouraging PFOF. Several member states, such as Germany and the Netherlands, have introduced national bans, and the EU Retail Investment Strategy proposes an outright prohibition across the EU.
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