The new OECD Capital Market Review of Romania aims to support Romania in improving the framework and general functioning of its capital market and to guide the development of a national capital market strategy. The policy recommendations focus on conditions for stock market listing, secondary stock market liquidity, growth markets, modalities for household savings, institutional investors, and market based debt financing.

1. OECD Capital Market Review
of Romania
TOWARDS A NATIONAL STRATEGY

2. Strong potential for growth…
• The Romanian economy has been expanding by an average of
3.7% annually in real terms since 2000, far above the EU
average.
• GDP per capita rose to over 60% of the OECD average from
around just 30% in the early 2000s.
• Strong labour productivity growth in the past decade far
outpacing regional peers.
• After a deep contraction in 2020, GDP grew by 5.9% in 2021.

3. Source: OECD Capital Market Review of Romania.
But Romania’s capital markets are underdeveloped
compared to EU levels
While Romania’s GDP accounts for around 1.6% of EU’s GDP, its capital markets represent a
much lower share. Prior to the COVID-19 crisis, Romania represented only:
• 0.5% of EU’s stock market capitalisation
• 0.1% of EU’s corporate bond issuance amount
• 0.5% of EU’s private equity investments
Romania’s share in EU….
0.44%
0.09%
0.45%
1.6%
0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6%
Private equity investment
Corporate bond issuance
Stock market capitalisation
IPOs & SPOs
GDP
2015-2019 average 2019
0.0%

4. Newly listed and delisted companies in Romania Turnover ratio in Romania
• The number of listed companies has been decreasing over time with negative net listings
almost every year since 2007.
• Low levels of liquidity in the secondary market and liquidity is driven by a small number of
stocks.
• The annual turnover ratio for stocks listed on the Main Market is modest and even lower for
stocks listed on the AeRO Market.
Decreasing number of listed companies and
low liquidity levels in the public equity market
-15
-10
-5
0
5
10
15
2000 `02 `04 `06 `08 '10 `12 `14 `16 `18 '20
New listings Delisted companies
No. of companies
Source: OECD Capital Market Review of Romania.
0%
4%
8%
12%
16%
2010 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
6.0% 6.3%
7.2%
8.0%
5.4%
7.9%
2.3%
4.9%
2.7% 2.9% 2.6%
3.5%
2015 2016 2017 2018 2019 2020
Main Market AeRO Market

5. Source: OECD Capital Market Review of Romania.
• Institutional investors’ assets under management remain the lowest (as share of GDP)
among peer countries.
• Pension funds’ assets in Romania only account for 6% of GDP, insurance corporations’
assets account for 2% of GDP and investment funds account for 4% of GDP.
• In Pillar II, 65% of the assets were allocated to government securities, 24% to equity and 4%
to corporate bonds.
Institutional investor’ assets to GDP, 2019 Asset allocation of pension fund Pillar II
Limited participation by institutional investors
0%
20%
40%
60%
80%
100%
June-2008 2009 2011 2013 2015 2017 2019 April-2021
Bank deposits Government sec./Municipal bonds
Corporate bonds Supranational bonds
Shares UCITS and other collective inv. units
0%
40%
80%
120%
160%
Romania Poland Hungary Czech
Republic
Austria Germany
Investment funds Insurance corporations
Pension funds

6. • Romanian companies are reliant on internal funds and bank loans.
• Over the period 2000-2019, average annual corporate bond issuance by Romanian
companies were significantly lower than in Europe and in regional peer countries.
• Domestic investors are not active in the market, holding only 8% of the outstanding stock of
non-financial corporate bonds.
Corporate bond issuances by Romanian companies Average yearly proceeds to GDP,
2000-2019
An undersized corporate bond market
0
4
8
12
16
0
400
800
1 200
'01 '03 '05 '07 '09 '11 '13 '15 '17 '19
Non-financials Financials Number (RHS)
2019 EUR, millions
Source: OECD Capital Market Review of Romania.
0.12%
0.3%
1.7%
0.0% 0.6% 1.2% 1.8%
Poland
Hungary
Czech Republic
Romania
CEE
Germany
Austria
Europe

7. 










Improving conditions for stock market listing
Increasing secondary stock market liquidity
Nurturing a vibrant SMEs growth market
Promoting household savings
Boosting the role of institutional investors
Facilitating market-based long-term debt financing
OECD recommendations on key areas

8. Improving conditions for stock market listing

Increase the attractiveness of the regulated market by:
1
• Reviewing the capital raising procedure for initial and secondary public offerings;
• Providing financial support for advisory fees related to the equity listing process;
• Introducing a national public-private campaign to encourage companies to use
market-based financing;
• Prioritising the authorisation and establishment of a Central Clearing Counterparty.
Improve the corporate governance framework by:
2
• Promoting increased transparency and disclosure of the audit committee’s activities;
• Ensuring SOEs adhere to the highest corporate governance standards.
3
• Listing minority shares of financially significant SOEs and increasing the free-float
ratios of currently listed SOEs;
• Encouraging SOEs listed on the AeRO Market to transfer to the Main Market.
Expand the size of investable securities universe by:
4
• Supporting the establishment of listed investment companies or funds that focus on
investing in unlisted firms;
• Developing platforms to connect investors and corporations searching for capital and
a regulatory framework for investment vehicles such as REITs.
Increase the number of investment funds/vehicles by:

9. 
2
Improve the research coverage of smaller companies by establishing a
mechanism that provides independent quantitative research to market at no
cost or by supporting recent programme launched by the stock exchange.
Increasing secondary stock market liquidity
3 Expand available instruments in the stock market by:
• Undertaking a regulatory and market conditions review of follow-on offerings to
encourage companies increasing their free-float levels and providing support to
partially or fully cover the cost of follow-on offerings;
• Introducing the possibility to trade open-ended investment funds (UCITS);
• Increasing efforts to develop a well-managed derivatives market in Romania;
• Improving the efficiency of collateral management to support the development of
securities lending and borrowing, and derivatives market operations.
1 Increase the investor participation in the stock market by:
• Creating a country-wide campaign to reach out to inactive shareholders for the
liquidation of the shares linked to the privatisation programme of the 1990s;
• Simplifying the capital gains tax declaration and payment methods;
• Providing clarity with respect to the categories of tax-deductible and non-deductible
expenses for financial firms;
• Reducing the trading fee charged by the ASF.

10.  Nurturing a vibrant SMEs growth market
2
2
• Establishing a co-operation between the BVB and the Chamber of Commerce and
Industry of Romania to promote the use of market-based financing among SMEs;
• Supporting SMEs in taking advantage of the financing available via the SME IPO
Fund;
• Promoting the use of the ELTIF framework as an investment vehicle for SMEs to
further improve access to funding.
Expand the investable universe of SMEs by:
1 Increase the attractiveness of the SME market for issuers and investors by:
• Assessing the adequacy of the threshold below which public offers of securities are
exempt from the requirement to publish a prospectus;
• Subsidising brokerage companies to help smaller companies prepare a relevant and
accurate assessment of their financial prospects;
• Designing a mechanism for companies listed on the alternative AeRO Market to
transfer to the main market;
• Creating a personal income tax benefit for households investing in private equity
funds.

11. 
1
Promoting household savings
2
Provide incentives for households to increase their savings by introducing a
tax-exempt simplified individual savings account tailored to Romanian
households.
1
• Increasing the portion of the population that has access to a bank account
through co-operative banks and implement cost-saving digital tools;
• Using the momentum from the National Strategy for Financial Education to
reinforce co-operation among all stakeholders involved;
• Increasing awareness of the need for a higher saving rate.
Improve financial access and literacy for households by:

12. 1
• Revising the risk-weighting methodology currently applicable to pension funds aiming
to increase the effective investable universe of asset classes;
• Allowing pension funds to lend securities to provide an extra return for beneficiaries
and support secondary market liquidity;
• Increasing the fiscal deductibility of the annual contribution to Pillar III of the pension
system and indexing it to a relevant income measure in the country;
• Promoting occupational pension schemes within the scope of the national private-
public campaign.
Promote the development of pension funds by:
Boosting the role of institutional investors

2
Facilitate the establishment of funds by simplifying the approval process for
funds, for example by standardising some of the required documents.

13. 
2
• Considering whether any institution has the capacity to provide credit ratings;
• Subsidising the establishment of a domestic rating agency;
• Providing financial support to smaller companies in obtaining credit ratings;
• Adapting the current pension fund regulatory framework to recognize more credit
rating agencies.
Address the role of credit rating systems in the corporate bond market by:
1
• Undertaking a regulatory review to streamline the listing process of corporate bonds;
• Re-evaluating the requirement to hold an extraordinary general meeting to issue a
bond;
• Providing incentives for issuers of and investors in green bonds.
Increase the attractiveness of the corporate bond market by:
Facilitating market-based long-term debt financing
3
• Encouraging the creation of collective investment vehicles that invest in diversified
products including non-financial corporate bonds;
• Designing public-private partnerships where a private sector company or entity is
created for the purpose of executing infrastructure projects, which they could finance
by issuing corporate bonds.
Expand investors base and instruments in the corporate bond market by:

14. Thank you for your attention!
Download the full report here:
https://doi.org/10.1787/9bfc0339-en.
More information available at:
https://www.oecd.org/corporate/
The project was co-funded by the European Union via the Structural Reform Support Programme.