Romania's financial market watchdog sketches tighter regulations for pension fund managers

Romanian pension fund managers will have to evaluate their portfolios in a more transparent and proactive manner if the proposals sketched by the regulator of the financial market ASF are enforced. The proposals are open for public debate by December 3.

"In order to protect the interests of the contributors to pension funds, the draft normative act includes provisions that extend and strengthen the obligations of the managers regarding the way they carry out the activity of investing and evaluating the assets of the pension funds," ASF explained, according to Ziarul Financiar.

The fund managers will set in place an early warning system triggered by a 10% drop in the value of an investment compared to the purchase price, under which the manager will have to reevaluate the asset and take steps accordingly.

The fund managers will have to monitor their investments closely. Thus, the valuation of the fixed-income financial instruments will be updated using the quotation provided by Bloomberg Finance LP or Thomson Reuters. They will also implement provisions for the calculation of the accumulated daily interest.

On the other hand, the managers of such pension funds will be given the right to invest in corporate bonds with no rating attached in case the state owns directly or indirectly at least 50% of the issuer's capital.

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