Megaregulator starts its activity on January 1, 2007

Megaregulator will start to function on January 1, 2007 a regulating authority of RM financial market; it was created by the necessity to control the market, the deputy chairman of the National Securities Commission (CNVM), Vasile Pentelei declared, during a press conference on Thursday, June 20. Megaregulator will be created in the CNVM frame and will control the markets of securities, insurances, non-state Pension Funds, Lending and economical Associations, Micro financial Organizations, Finance Houses and Mortgage Organizations. A work team was assigned to create the organization, guided by the vice Premier Zinaida Greceanii. Three laws are due to be modified regarding CNVM: the laws on Megaregulator, on Joint Stock Companies and Securities Market. One of the Megaregulator’s main functions is to “prudently” monitor. i.e. to prevent insolvency issues of economical agents, monitor market behavior, penalize those who are in breach. Other important function is to prevent “money laundering”, which is a major issue not only for the market players but also for the whole country, declared Pentelei. Megaregulator`s launch will be synchronized with monitoring reform, which has the goal to “redress the central public administration”. While in the first stages, Megaregulator is not designed to extend into the banking sector, but this can be a challenge if it finds a good justification. Once Megaregulator starts to exist, citizens will be able to obtain higher returns from their deposit accounts, due to the competition with the banking sector. According to CNVM vice president, the idea of Megaregulator was taken from European countries. Some CSI countries like Russia, Ukraine Kazakhstan and Kirghistan have already created or intend to create such entities. CNVM member Nadejda Stanciu declared that one of the main positive features is the elimination of competitive inequalities between financial agents, where some conflict of interest between the market segments will disappear, due to the fact that the promotion one segment to the detriment of another will not be allowed. According to the cited source, the purpose of Megaregulator is to develop capital markets, in order to provide means to attract citizens to invest in real economy.