On 28 March 2012, the London Stock Exchange Group (“LSEG”) and the Bucharest Stock Exchange (“BSE”) signed an exclusive letter of intent (“Agreement”) to collaborate across five business areas with a view to bringing Romanian investment opportunities closer to the international investor community in London. The collaboration was agreed during a period of growth in the Romanian economy and in anticipation of a pipeline of Romanian privatisations that may attract interest from significant numbers of international investors. The press release issued by the LSEG regarding the Agreement can be accessed here.
The five areas covered by the collaboration include:
- Primary Markets - The two exchanges will co-promote a “Romania - Investment Forum” to raise awareness among London-based investors and advisers of the investment opportunities in Romania. In addition, the LSEG will support the BSE in investor road shows for Romanian privatisation candidates.
- London Stock Exchange Academy - The London Stock Exchange Academy will provide training to the BSE, the Romanian Central Depository, the Romanian National Securities Commission, the Romanian Ministries and the Romanian Privatisation Office.
- Proquote System and Membership - The LSEG will offer simple access to London Stock Exchange markets for new members and provide use of the LSEG’s Proquote System, which offers cost-effective market information and execution facilities.
- FTSE - The FTSE Group and the BSE will explore developing indices for the Romanian market.
- Post Trade - The two exchanges will explore and develop post-trade collaborations between Monte Titoli and the Romanian Central Depository. In addition, the LSEG will provide assistance for the clearing of BSE-traded securities and will provide support for the potential establishment of a securities clearing house and of central counterparty functions.
One of the first public discussions of the LSEG-BSE alliance was held at the CMS-sponsored IFLR European Capital Markets Forum on 25 April 2012 in London. The collaboration was discussed on a panel composed of Maria Leistner (Managing Director, EMEA General Counsel at Credit Suisse), Eoghainn Calder (Managing Director, IB Legal at Goldman Sachs), Alex Ainley (Managing Director, Head of ECM and DCM Legal at Unicredit), Sarah Blomfield (Head of IB Legal, NM Rothshild & Sons) and Jens-Axel Kalinowski (Manager of the Continental Europe division at the LSEG) and co-chaired by CMS partners Daniel Winterfeldt and Mathias Strasser. Jens-Axel Kalinowski gave a presentation on the Agreement, which was followed by a panel discussion on the Agreement and the future pipeline for Romanian privatisation transactions, ending with a question and answer session on the collaboration and plans for moving forward.
On 8 May 2012 the first co-ordinated joint initiative between the two exchanges took place in Bucharest, at the Romanian and International Capital Markets Roundtable. The event, which explored such subjects as the opportunities presented by Bucharest’s development as a regional financial centre and financing options available to Romanian companies, was hosted by the Bucharest Stock Exchange. Key speakers and panellists included Bogdan Mihai Chetreanu Commissioner of the Romanian National Securities Commission), Luca Peyrano (Head of Continental Europe at the LSEG), Lucian Anghel(President of the BSE), Tom Attenborough (Managing Director, CEE at Citigroup) and Jens-Axel Kalinowski (Manager of the Continental Europe division at the LSEG).
On 17 May 2012 Romanian Business Environment Minister Lucian Isar and a delegation of Romanian government ministers and officials from the BSE and the Romanian National Securities Commission met with representatives of the LSEG to open the day’s trading and discuss the collaboration. Several select guests were invited to attend the opening ceremony, including CMS and other members of the London and Bucharest advisory communities. Romanian officials from the delegation stressed the potential for growth in the Romanian capital markets, as well as the government’s aims to increase commercial incentives for attracting business and investment. These events are just the initial steps in implementing the LSEG-BSE alliance and will be followed by further developments to expand on the five areas of collaboration. Involvement by CMS in such events and discussions reflects the firm’s focus on growth economies in the CEE and recognition of Romania as a promising jurisdiction for development in the international capital markets.