ROMANIA Law and Practice Contributed by: Sergiu-Traian Vasilescu, Luca Dejan, Bogdan Rotaru and Ana-Maria Bută, VD Law Group
Key Similarities Both must comply with ASF regulations on transparency, reporting and risk management. If they engage in HFT, they face additional ASF oversight and stricter risk controls under MiFID II. 7.4 Regulation of Programmers and Programming In Romania, programmers who develop trad - ing algorithms are not directly regulated, but the firms that use these algorithms are strictly supervised under Law No 126/2018. While programmers don’t need a licence, firms using algorithmic trading must follow risk con - trol rules, including pre-trade limits, testing and market abuse prevention under MiFID II and the Market Abuse Regulation (MAR). If an algorithm manipulates the market, the firm is responsible, though a programmer could face legal action if misconduct is intentional. In Romania, insurance underwriting involves assessing and pricing risks before issuing poli - cies, using data collection, historical claims anal - ysis and financial risk evaluation. The industry leverages insurtech solutions like AI, machine learning and big data analytics to enhance accu - racy, speed and risk forecasting. Underwriting is regulated by Law No 237/2015 and must comply with EU Solvency II, ensuring insurers maintain adequate capital. Consumer protection rules require transparency in risk assessment and fair treatment of policyholders, while GDPR mandates secure personal data processing. As insurtech transforms underwriting, regulators 8. Insurtech 8.1 Underwriting Processes
ment firm or credit institution, depending on its structure. If a firm actively provides liquidity by continu - ously 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 quoting 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 institutions) engaged in proprietary trading, although both operate under Law No 126/2018 on Markets in Financial Instruments (which implements MiFID II). Key Differences Investment funds (such as hedge funds or alter - native investment funds) typically trade finan - cial instruments for portfolio management and investor returns, not for direct market making or client execution. They fall under ASF supervi - sion and are regulated by the AIFMD (Alternative Investment Fund Managers Directive) or UCITS Directive, depending on the fund type. Dealers (investment firms or banks trading on their own account) can act as market makers or proprietary traders, providing liquidity or exe - cuting trades for themselves. They require ASF licensing under MiFID II rules and, if they take deposits, BNR supervision.
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