ROMANIA Law and Practice Contributed by: Sergiu-Traian Vasilescu, Luca Dejan, Bogdan Rotaru and Ana-Maria Bută, VD Law Group
• Prohibition of insider dealing – trading based on material non-public information is strictly forbidden. This includes using such informa - tion for one’s own account or disclosing it unlawfully. • Prohibition of market manipulation – practices that give false or misleading signals about the supply, demand, or price of financial instru - ments – such as spoofing, wash trades or spreading false information – are prohibited. • Obligation to disclose inside information – issuers must promptly disclose inside infor - mation to the public in a manner that ensures equal and non-discriminatory access. • Fair and transparent trading – market partici - pants must act honestly and professionally, ensuring fair access to information and avoid - ing manipulative or deceptive conduct. • Surveillance and reporting – investment firms and trading venues must monitor trading activity and report suspicious transactions to the ASF via Suspicious Transaction and Order Reports (STORs). These rules are designed to maintain investor confidence, ensure efficient price formation and protect market integrity. Similar principles are expected to apply under MiCA, particularly in relation to the trading of crypto-assets on regu - lated platforms. 7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations In the Romanian legal landscape, high-frequency trading (HFT) and algorithmic trading are mainly regulated by a set of Romanian and EU laws and overseen by the ASF and the Bucharest Stock Exchange (BVB).
This key regulatory framework includes the fol - lowing. • MiFID II (Markets in Financial Instruments Directive): This EU directive, implemented in Romania through Law No 126/2018, regulates trading activities, including HFT and algorith - mic trading. It requires firms to implement risk controls, ensure market fairness, and monitor pre- and post-trade activities. • Market Abuse Regulation (MAR): This applies to all asset classes and focuses on prevent - ing market manipulation and insider trading in algorithmic and high-frequency trading. • ESMA Guidelines: These guidelines focus on transparency, fairness and risk management in algorithmic trading systems. While MiFID II applies broadly across asset classes, there are differences based on the type of asset. For example, in case of (i) equities and derivatives, there are more stringent reporting and risk management requirements, (ii) com - modities, there are additional rules like position limits to curb speculation and (iii) cryptocurren - cies, lighter regulation, mainly focused on AML and CTF compliance, with less emphasis on HFT or algorithmic trading. 7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity In Romania, firms operating in a principal capac - ity must be licensed under Law No 126/2018 on Markets in Financial Instruments. However, not all principal 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 invest -
731 CHAMBERS.COM
Powered by FlippingBook