Banca Naţională a României

PROTOCOL

concluded between

the National Bank of Romania, the National Securities Commission
and the Insurance Supervision Commission

regarding the co-operation in the supervision of the financial system

The authorities in charge of licensing, regulation and supervision of financial system sectors hereinafter called authorities, i.e.:

National Bank of Romania (NBR), the central bank of Romania, whose main objective, according to the provisions of Law 101/1998, is to ensure the stability of domestic currency. The NBR issues, implements and is responsible for the monetary, foreign exchange, lending and payments policies, as well as for bank licensing and prudential supervision, by monitoring the normal operation of the banking system and participates in establishing financial system specific to a market economy.

National Securities Commission (NSC), the independent administrative authority whose main objective, according to Law No. 52/1994 on securities and stock exchanges, is to facilitate the well functioning of the securities market, to ensure protection of investors against unfair, abusive and fraudulent practices, to inform security holders and the general public on the persons who publicly resort to savings and on the securities they issue, to establish the framework for the activity of securities intermediaries and agents, and the regime of their professional associations as well as of the bodies responsible for the operation of the capital market.

Insurance Supervision Commission (ISC), the specialized independent administrative authority whose main objective is the enforcement of Law No. 32/2000 on insurance companies and insurance supervision, including monitoring, regulation, licensing and supervision of insurers and reinsurers, as well as of insurance intermediaries, with the view to protect the interests of the insured or the potential insured and to promote stability of the insurance sector,

Taking into consideration that:

• within the financial system the authorities are separately responsible for the supervision of the respective sectors, i.e. of banking, capital market and commodity exchange, as well as of the insurance market with their specific institutions and operations;

• the financial system has become much more dynamic and complex in the recent years, which resulted in overlapping at institutional, operational and product level. This development is more evident with financial conglomerates, i.e. groups of institutions based on organizational and economic linkages, who operate simultaneously on several markets of the system;

• the number and complexity of financial products and services has increased, involving more and more persons and offering more options to the public, making information of the latter and transparency of products a necessity;

• frauds occurring simultaneously or in one sector of the financial sector but with an impact on the other sectors have been found;

• the authorities in charge of licensing, regulation and supervision of the financial system shall closely co-operate to ensure transparency, the stability and integrity of the system and its markets and the protection of consumers against practices which are not in line with the regulation framework;

• the co-operation of the authorities in charge of licensing, regulation and supervision of the financial system shall focus mainly on problems deriving from the overlapping at institutional and operational and product level, with a view to avert overlapping in supervision and fill in the gaps resulting from the fact that certain areas of the system are not covered by any of the authorities, and to set forth joint supervision actions.

Pursuant to the provisions of the present protocol on co-operation in banking system supervision, hereinafter called Protocol, the parties agree on the following:

1. To co-operate in order to ensure adequate, efficient and joint supervision, chiefly in areas with existing overlappings or gaps in supervision activity of the above mentioned authorities. To this purpose, the co-ordination of measures and actions taken by the authorities in the sector they supervise and regulate shall be taken into account to avoid systemic crises and ensure a competitive and non-discriminating environment for all market participants.

2. To co-operate in issuing rules and regulations to meet joint interests designed to fill in insufficiently regulated areas in licensing and supervision of institutions and operations specific to each sector of the financial system by taking into account the exercise of each authority's powers.

3. To exchange information in order to ensure an adequate and efficient licensing, supervision and regulation of the financial system. The information received under the present Protocol shall be only used for the purposes they have been required for, otherwise the agreement of the party supplying the information is necessary. The party requested shall supply the information as soon as possible, or in case of a refusal shall give the reason for it. The supplied information and data, as well as the measures taken to enforce the provisions of the present protocol are confidential and may not be disclosed but under the terms agreed upon by the parties.

4. To share information on legislative projects, in order to achieve harmonization;

5. To share information on developments which could be important for any of the authorities;

6. To organize joint supervision actions of financial conglomerates with a view to globally identify and address problems of utmost importance.

7. To organise at least once a year joint meetings of the authorities' management in order to assess co-operation in supervision actions, to establish co-operation strategy as well as to discuss and solve global problems involving licensing, regulation and supervision of the financial system.

8. Each authority designates a representative to prepare the meetings of the managers of the authorities or the managers of the departments with similar activities or on a subject proposed by one of the authorities.

9. The actual co-operation problems within the present Protocol shall be identified currently by each authority according to the tasks, prerogatives and responsibilities by law.

10. In line with the results in co-operation based on the present Protocol, the authorities shall establish the method to exchange information with other institution such as: the Ministry of Public Finance, the Ministry of Internal Affairs, the Court of Audit, the National Office for Prevention and Control of Money Laundering and shall find ways to keep confidentiality of information.

11. No provision of the present protocol may jeopardise the rights, duties and responsibilities of any of the authorities arising from the provisions of the laws in force, in terms of which they have been established and are operating.

12. The different standpoints occurring in the progress of implementing the provisions of the present Protocol shall be harmonised through direct consultations between the management of the signing authorities. Subsequent amendments to the present protocol shall be made in written form, shall be agreed upon by the signing authorities and shall be effective as of adoption.

13. The present Protocol comes into force as of its signing. The protocol between the National Bank of Romania and the National Securities Commission concluded on 28 September 2001 ceases being valid as of enforcement of the present Protocol.

14. The present protocol shall be terminated for one or all of the signing parties on the written request of parties involved.

Signed today, 3 April 2002