Until recently, companies granting financial instruments (e.g., stock options or rights to acquire shares under an ESPP) to employees in Romania that did not trigger a prospectus filing (or passporting) requirement were nonetheless obligated to report the grants to the Financial Securities Authority (FSA).

This reporting obligation applied despite Romania having adopted the EU Prospectus Directive which was supposed to harmonize the securities filing requirements across Europe and preempt country-specific filing requirements.

Pursuant to a private request, the FSA has now confirmed that companies no longer need to report the grant of equity awards, provided:

  1. The awards are non-transferable;
  2. The issuer's shares are not traded on a Romanian stock exchange; and
  3. The grant does not trigger a prospectus filing (or passporting) requirement.

The FSA’s latest interpretation is not official. However, we believe other companies should be able to rely on the new position, especially because it is in line with the practice in other EU jurisdictions and consistent with the EU Prospectus Directive.