The acquisition of shares in a Romanian company on the Bucharest Stock Exchange (BSE) can be made through specialized companies ( Financial Investment Services Companies) or by making a public offer to buy. You can find the full list of such companies on the BSE website. After choosing a company, the transactions are made with the help of specialized intermediates authorized by the National Commission for Securities ( C.N.F.M.).
After signing a financial intermediation contract, the future buyer is advised to open an investment account consisting in money or financial instruments that the financial investment services agent is authorized to use at the buyer’s command in order to purchase the shares.
The main types of orders for purchase / sale are:
- market price: the shares are sold / bought at current market prices, formed by supply and demand;
- the price limit – the investor sets a price limit to the broker: a minimum selling price or maximum price
- stop loss - used by investors to limit loss. These may be for sale or for purchase and involve setting one price of execution and one of activation;
- if-touched – used by investors to mark the gain. They may be of sale or purchase and involve setting a price of one execution and activation.
Fees for investment services companies apply to all transactions of buying and selling shares. The fee is usually between 0.50% and 1.50%, depending on the value of the transactions. Usually, no fees are charged to cash operations (cash deposits), although there may be exceptions and cash deposited to Financial Investment Services Companies does not bear interest.
It is mandatory to follow the kind of investment that provides an optimal ratio between profitability and risk ratio adjusted to your expectations, possibilities and the risk each investor is willing to take.
Public offers are special operations through which large and very large packages of shares are bought or sold. If an investor wants to purchase a high number of shares, he/she can launch a public offer to inform the capital market and investors of his/her intention. Public offers to sell concern the sale of newly issued shares sold by the issuer or existing shares sold by one of the shareholders of the company.
If you are already a shareholder in a company that decides a share capital increase, emptive rights entitle you to buy the newly issued shares.
Through the electronic trading system of the BSE there are also traded shares of unlisted securities market. This is a special section of the exchange on which the shares have been withdrawn from the stock exchange but still traded through the stock exchange. These companies are no longer considered publicly traded and trading their actions involve greater risks.
The value of shares is determined freely on the stock market, depending on supply and demand, and the results recorded by the company and its net assets. Thus, shareholders can win from any increase in
market value of the shares on the stock exchange.
Once you purchased shares in a Romanian company, you start to profit the moment the value of your investment is increasing. Such raise in the value of the investment can come from the increase in the value of the shares you hold and/or the dividends you are entitled to as shareholder of the company.
As a shareholder, you have the right to be informed on the economic and financial evolution of the company, you are entitled to receive each year a share of the company’s profits (as dividends) corresponding to the number of shares and the amount allocated by the management company to pay dividends, the right to participate in decision making through the General Meeting of Shareholders and and the opportunity to vote and to be elected to the board of directors of the Company, the right to a share of the amounts resulting from a possible liquidation of the company proportionate to the share you previously owned.
Commercial law is a real passion for our lawyers at Darie, manea & associates, thus providing our clients legal guidance and ensuring the formalities are an easy process are just some of our priorities. Please feel free to consult our list of lawyers and contact us and we will assist you in the process of buying shares in a Romanian company.