Despite limited summer market activity, optimism prevails in Romania, with Schoenherr Partner Narcisa Oprea citing a successful EUR 1.9 billion IPO and increased private sector interest amid quite a few likely regulatory improvements still to come.
“While the summer season typically sees limited activity in the market, we can't help but feel hopeful,” Oprea begins. “June and July witnessed the successful closure of a EUR 1.9 billion IPO, and this has fueled optimism. We're encouraged by the fact that more private sector companies are considering IPOs, however, it's important to note that IPO activity has been relatively stagnant in recent years, and we eagerly await more successful developments,” she shares.
Oprea goes on to explain that “capital market lawyers are particularly focused on lobbying for improvements to the regulatory framework: we've already implemented EU directives and harmonized with European standards, but there's still room for national laws,” she says. One significant area where she thinks there is ample room for improvement is the “processing of corporate actions in Romania. While it might sound abstract, this has a tangible impact on raising money and the expectations of investors and listed companies. The bureaucratic procedures and formalities in Romania have led to extended waiting times,” she explains. “We've collaborated with the Romanian IR Association to lobby regulators for streamlining these processes. It was a lengthy endeavor, but we're delighted to see a more open and enthusiastic regulatory response,” she says.
Still, there are other areas where certain impediments continue to pester businesses and lawyers alike. “Asset management is another area where we've faced challenges,” Oprea continues. “European laws apply, but the Romanian market has its unique specifics. For example, in most EU jurisdictions a license from the local regulator to act as a fund manager is sufficient for establishing PE funds. However in Romania, additional laws apply and licenses for the PE Funds are required,” she says. “This not only adds to the cost but also affects the timing, which is crucial in capital markets. We've initiated a dialogue with the regulator to address these issues and, while we've made progress, there are still challenges in some areas,” she adds.
Moreover, Oprea stresses that ESG remains “a hot topic, of course. There's growing pressure on issuers to adopt ESG principles. We've observed an increase in the issuance of green bonds, especially by entrepreneurial companies,” she comments. “However, there's still ample room for development in this area. We anticipate that green bonds will continue to play a significant role in the Romanian market.”
Finally, Oprea underlines having “high hopes for draft legislative changes that could rejuvenate the local markets. There's a sense of positivity about the future, and we look forward to seeing these changes implemented,” she concludes.
