Moldova’s non-banking financial market to be regulated by a single watchdog

The non-banking financial market in Moldova will be supervised by a single agency – National Financial Market Commission (CNPF). Parliament passed in first reading a draft law on this issue on Friday, May 4. The new body will be the successor of the National Securities Commission (CNVM), also merging with the State Inspectorate for Supervising Insurances and Non-Governmental Pension Funds as well as the Service for State Supervising of Associations of Economies and Loans of citizens under the control of the Ministry of Finances. CNPF will authorise and regulate the activity of the participants in the financial non-banking market and will supervise their compliance with the legislation. The main goal of the Commission will be to strengthen stability, ensure transparency, security and efficiency by adopting and maintaining a regulatory framework for supervising the participants in the financial market in order to reduce the risks as well as prevent anti-competition practices. The new commission will work out together with the Government the Non-Banking Market Development Strategy; will issue, cancel or suspend licenses and authorisations of the professional participants in this sector. Minister of Economy and Commerce, Igor Dodon, said that this reform will be an incentive for the development of the non-banking financial market. Moreover, the reform aims to create fair competition rules in the banking system concerning the development other non-banking financial instruments – corporative obligations and other institutions. The banking system will still be regulated by the National Bank. Therefore, after the implementation of the reform, there will be two regulator agencies of the financial market, which will be divided into the banking and non-banking financial market. It is a well-known international practice, which is implemented successfully in other states, including some of the CIS countries, the minister stated.