Evolution of the Romanian post-trade environment: Embracing the new European post-trade realities

Transcription

1 Tanasoiu:JSC page.qxd 03/01/ :57 Page 265 Journal of Securities Operations & Custody Volume 4 Number 3 Evolution of the Romanian post-trade environment: Embracing the new European post-trade realities Adriana Tanasoiu Received (in revised form): 24th October, 2011 Depozitarul Central, Carol I Boulevard, 8th Floor, Bucharest 2, Romania; Tel: ; Fax: ; Adriana.Tanasoiu@RoClear.eu Adriana Tanasoiu is the Chief Executive Officer of Depozitarul Central (Romanian Central Securities Depository). She coordinated the establishment of the Central Securities Depository (CSD), as well as the CSD business and service functions in Romania, and the development of the CSD Rulebook, in addition to a strong collaboration with the Bucharest Stock Exchange. Adriana is a member of the Securities and Markets Stakeholders Group of the European Securities Markets Authority and also a member of the Executive Committee of the European Central Securities Depositories Association. Her experience ranges from the international to the domestic: she has implemented a set of new service features for Depozitarul Central, deploying the best-of-breed of what is available internationally, which today makes Depozitarul Central one of the leading and strongly innovative depositories in Eastern Europe. Adriana has led the organisation to be a pioneer and an active promoter of TARGET2 Securities. Prior to joining Depozitarul Central, she was Deputy General Manager of the Bucharest Stock Exchange and in this capacity she coordinated the trading and post-trading operations, as well as new products and services development and implementation. Adriana was part of the team established by the Central Bank of Romania to set up the Bucharest Stock Exchange. ABSTRACT This paper focuses on how Depozitarul Central, the Romanian Central Securities Depository (CSD), is preparing to face the challenges, and benefit, from the opportunities of the new European post-trade reality. Depozitarul Central evolved from a productdelivery to a client-focused organisation. It deployed the most advanced regulations and technology, including SWIFT. The organisation offers choice between omnibus and beneficial owner accounts and provides innovative solutions to its domestic and global clients, acting as a gateway to efficient settlement and asset servicing in 18 foreign markets, in addition to the domestic market. All the links support free of payment (FoP), as well as delivery versus payment (DvP) settlements in 11 currencies. Depozitarul Central developed borrowing and lending services, based on the Global Master Securities Lending Agreement, including collateral management facilities. It is a pioneer in TARGET2 Securities and is part of the first group of depositories that will use this state-ofthe-art pan-european settlement platform. Today the organisation is one of the leading CSDs in Central and Eastern Europe and continues to be a pioneer of securities services developments by working with its local and remote clients and providing them with efficient and seamless access and solutions for the future European environment. Keywords: omnibus accounts, borrowing and lending, cross-border settle- Journal of Securities Operations & Custody Vol. 4 No. 3, pp Henry Stewart Publications, Page 265

2 Tanasoiu:JSC page.qxd 03/01/ :57 Page 266 Evolution of the Romanian post-trade environment ment, cross-border links, SWIFT communication, TARGET2 securities INTRODUCTION As is often the case, the attractiveness of emerging markets for institutional investors frequently gets countered with an apprehension of the unknown. In relation to the operational reliability of the market infrastructures, these concerns are sometimes even magnified. However, it is worth noting that the post-trade securities infrastructures in Central and Eastern EU countries have been generally developed in accordance with the latest industry standards. The policymakers implemented modern legislation and systems aimed to ensure the smooth functioning of payment and clearing and securities settlement systems, and overseers cooperated closely with the European Commission and, where relevant, with the EU Council and Parliament. These facts should lead to containment of systemic risks, greater investor protection and confidence in emerging securities markets. These initiatives also seek to improve the efficiency of market infrastructures, and to promote and sustain the integration and competitiveness of the EU markets. The European Commission is looking to develop legislation dedicated to Central Securities Depositories (CDSs), to address the diversity in settlement practices across the EU, which have been perceived as hindering the development of a truly integrated European post-trade environment. An integrated and consolidated market structure increases the importance of the integrity of clearing and settlement systems because these systems tie markets and participants together. This necessitates, among other things, that clearing and settlement processes be robust and efficient. Increasing the efficiency of clearing and settlement systems allows market participants to optimise the use of liquidity, and reduces the risk of market disruption and the systemic risk. This paper is organised as follows: after providing a fact-based overview of the Romanian capital market, it focuses on how Depozitarul Central, the Romanian CSD, achieved operational reliability and efficiency, and is preparing to face the challenges and benefit from the opportunities that the new European post-trade reality will bring. ESTABLISHING THE MODERN ROMANIAN CAPITAL MARKET The Revolution of December 1989 marked the end of the Communist regime, and Romania could again see the dawn of transition to individual freedom, private property and competition. Before the 1989 Revolution, all property was in State hands; the first thing that needed to be done in the transition from the centralised, state-planned economy to the market economy was the restoration of private property. The actual privatisation process was initiated according to a law issued in 1991, which provided for the establishment of a specialised institution, the State Property Fund, in charge of the privatisation process. The State Property Fund received 70 per cent ownership in all the joint stock companies established according to the first Privatisation Law in The remaining 30 per cent was divided among five regional Private Property Funds. The law also provided that every Romanian citizen over 18 years old would receive coupons that could be subscribed in exchange for shares in one of the joint stock companies or in one of the five Private Property Funds. At the time that the privatisation laws were adopted, there were intense debates regarding the form of the shares that were Page 266

3 Tanasoiu:JSC page.qxd 03/01/ :57 Page 267 Tanasoiu going to be distributed to the Romanian adult citizens. Some people supported the issuance of paper-based shares, which would have provided the owners with a tangible proof, very important after so many years in which people were not allowed to own private properties. Others argued that issuing the shares in a dematerialised form would avoid the drawbacks associated with materialised shares and would facilitate and simplify the process of establishing the capital market, at the same time being in line with the latest international standards. The dematerialisation concept was largely embraced and it was included in the law. At the end of the Mass Privatisation Programme in 1996, Romania had 18,791,483 shareholders, which had their holdings in 5,770 companies recorded in book-entry form. The database of shareholders created as a result of the Mass Privatisation Programme was administered using the most modern technology, application and database software. The key specialists who developed the software, which supported the Mass Privatisation Programme and the creation of the national database of shareholders, currently work for Depozitarul Central, the Romanian CSD, contributing their valuable experience to the smooth functioning of its current systems. In parallel with the privatisation process, the legislation necessary for establishing the capital market started to be developed in 1992, when two nuclei were created: one in the Ministry of Finance (aimed to establish the National Securities Commission) and one in the Central Bank of Romania (having the objective to set up the Bucharest Stock Exchange). Following the adoption of the Law on Securities and Stock Exchanges in 1994, the National Securities Commission was established in the same year. The re-establishment of the Bucharest Stock Exchange in 1995, after an interruption of over five decades, was another milestone in the process of creating the fundamental institutions of the market economy. The Bucharest Stock Exchange had, besides the traditional trading-related departments, post-trade specialised departments (the Clearing and Settlement Department and the Registry Department) and was acting as the securities settlement system and CSD from the beginning. The Bucharest Stock Exchange started trading on the 20th November, 1995, using a fully automated trading and post-trading system, in a completely dematerialised environment. The set up of the stock exchange was a challenging process, but since everything needed to be created from scratch, it was done using the latest international standards. In terms of the sophistication of regulations and systems, Romania has always been, and continues to be, fully aligned with the most advanced capital markets in the world. The number of trades on the Bucharest Stock Exchange increased gradually; more and more shareholders that received shares in the Mass Privatisation process started to trade their shares. New investors, domestic and foreign, including institutional investors, were also attracted by the Romanian shares listed on the Bucharest Stock Exchange. In 1996, another trading system, RASDAQ, was established, as well as a securities depository and a registrar to serve this new market, so the Bucharest Stock Exchange faced intense competition just one year after its re-establishment. The RASDAQ market was created in order to provide trading facilities for the companies included in the Mass Privatisation Programme that did not undergo the listing process at the Bucharest Stock Exchange. Many of these companies chose, over time, to transfer from RASDAQ to the Bucharest Stock Page 267

4 Tanasoiu:JSC page.qxd 03/01/ :57 Page 268 Evolution of the Romanian post-trade environment Exchange and have their shares listed. In 1997 the Romanian capital market boomed, as a result of restrictions over foreign investments being removed. The number of intermediaries exceeded 250, and nine new registrars emerged by the end of Soon after its re-establishment, and continuously throughout its existence, the Bucharest Stock Exchange started to develop new products and new trading and post-trading mechanisms and services, all aimed to provide more choice to investors, to be in line with the latest international industry standards, to control the risks better and to improve the reliability and robustness of the Romanian capital market even further. Specific regulations were developed for custody operations and one of the novelties was the concept of the nominee account, which could only be used at the time by custodian banks. As the capital market law of 1994 did not include specific provisions regarding accounts structure, the Bucharest Stock Exchange regulations, approved by the National Securities Commission, constituted the only applicable regulatory framework. The listed companies that were not familiar with different possible account structures or with the new market mechanisms had some difficulties in accepting the new nominee accounts. The process of reporting the beneficial owners registered in nominee accounts was burdensome and the issuers requested the custodian banks to provide them with substantial documentation about the beneficial owners registered in nominee accounts. The new capital market law, enacted in 2004, which is still in force today, included specific provisions regarding accounts structure, mentioning clearly the two account types: beneficial owner account and omnibus account. The law also stipulates that a CSD should be established as a separate legal entity and should consolidate the entire activity of all existing post-trade institutions. The new capital market law was developed in preparation for Romania s accession to the EU in 2007, and consolidated the regulation of the entire capital market by transposing the principle of freedom of providing financial services. The law aimed at harmonising the national regulations with the EU legislation. The implementation of the new capital market law required a significant amount of work, an important number of regulations being issued by the National Securities Commission and subsequently by the market infrastructures in this respect. The regulations were, and continue to be, updated regularly in order to ensure alignment to new relevant EU legislation. The Bucharest Stock Exchange merged with RASDAQ in In the same year, the two biggest registrars merged, in preparation for the establishment of the CSD. Other registrars also merged or closed down, their number shrinking to five at the end of IMPROVING THE QUALITY AND EFFICIENCY OF POST-TRADE INDUSTRY The establishment and functioning of the CSD was seen as an essential condition for the safe and cost-effective performance of post-trading operations, and in particular of cross-border operations, with the purpose of integrating the Romanian capital market into the European financial market, and in the larger context of Romania s integration into the EU in In order to implement the new capital market law provisions regarding the establishment of the CSD, at the end of 2005, the National Securities Commission Page 268

5 Tanasoiu:JSC page.qxd 03/01/ :57 Page 269 Tanasoiu approved a specific regulation addressing the authorisation and functioning of the CSD. The Bucharest Stock Exchange became the majority shareholder of the company resulting from the merger of the two biggest registrars, and the name of this company was changed to Depozitarul Central. Users are well represented in the capital structure of the CSD, with the issuers owning per cent of the shares and banks, brokers and funds amounting to about 12 per cent. The Bucharest Stock Exchange has been a listed company since June Depozitarul Central is authorised, regulated and supervised by the National Securities Commission (Comisia Nationala a Valorilor Mobiliare) and by the Central Bank of Romania (Banca Nationala a Romaniei). The organisation started its operations on the 3rd January, 2007, at the same time that Romania joined the EU, by consolidating all the post-trade operations and services, which were performed until the end of 2006 by the Bucharest Stock Exchange, the RASDAQ depository and the five registrars. Key people who were part of the group that established the Bucharest Stock Exchange, and key specialists of the post trade departments, continue to occupy lead roles in Depozitarul Central, and make a valuable contribution to the development of new innovative products and value-added services, and to the smooth functioning of the CSD operations. Depozitarul Central has a multi-level system of settlement risk management, which covers credit risk and liquidity risk. Credit risk is reduced by applying the Delivery versus Payment (DvP) principle to settlement. Settlement on a DvP basis is conducted according to BIS Model 1 or BIS Model 2, depending on the type of trade and type of trading venue. Cash sett - lement in local currency (RON) is performed in central bank money, via the cash accounts of payment banks opened in the Central Bank of Romania s real-time gross settlement system, ReGIS. Remote membership has been available since The founders of the Romanian capital market and the policymakers decided, at the beginning of the 1990s, on the full dematerialisation of securities. This has removed much of the operational risk exposure from Depozitarul Central s depository services. As a user-governed organisation, Depozitarul Central s duty is to deliver both short-term and long-term benefits to its clients and to the market. This is why, starting from the time of its establishment as a separate legal entity and throughout its existence, Depozitarul Central continuously improved its regulations and services, and developed best-of-breed new products and value-added services, striving to be fully aligned with the highest industry standards. On the 14th February, 2008, just one year after Depozitarul Central started its operations as a separate legal entity, the first foreign issuer was listed at the Bucharest Stock Exchange. The issuer was already listed in EU countries in which the indirect holding system was used. Before this listing, Romania was largely a direct holding market, and no links with foreign depositories existed. In order to make the listing of the foreign issuer to the Bucharest Stock Exchange possible, Depozitarul Central played a key role by building a cross-border link to the foreign issuer s CSD and by implementing the same settlement mechanisms and the omnibus account structure that were used in the home country of the issuer. The listing of the first international company in Romania was an important milestone for the entire capital market, opening it to foreign issuers and, at the same time, facilitating the access of Page 269

6 Tanasoiu:JSC page.qxd 03/01/ :57 Page 270 Evolution of the Romanian post-trade environment Romanian investors to international financial instruments. A pilot programme was implemented at the time, including a brand new domestic settlement mechanism, a direct borrowing and lending service, as well as omnibus accounts. Since February 2008, Depozitarul Central has provided an extended range of settlement and value-added services for multi-country securities and multiple asset classes. Besides the portfolio transfers from and to the foreign CSDs, Depozitarul Central provides DvP cross-border settlements, as well as corporate actions and asset servicing related to foreign securities, acting as a gateway for its domestic and global client base. The cross-border settlement links with foreign CSDs were extended gradually, and they currently cover 18 countries located on three continents. All the links enable Depozitarul Central to provide its clients with both DvP and FoP settlements. Depozitarul Central is currently able to settle in 11 different currencies through its DvP links. The network of links will be further extended according to the clients requirements and needs. In order to reduce the settlement risk, a direct borrowing and lending service was implemented at the beginning of The two parties of the lending agreement instructed the CSD about the loan and Depozitarul Central registered it in its RoClear system. The collateral was managed bilaterally by the two participants. This was the first, simple and effective borrowing and lending mechanism provided by Depozitarul Central. In mid-2008, Depozitarul Central established a domestic link with the Central Bank of Romania s depository, SaFIR, in order to facilitate the listing of Government Bonds to the Bucharest Stock Exchange. The settlement model used for Government Bonds and the accounts structure are similar to the ones used for international securities. The first Government Bonds were listed at the Bucharest Stock Exchange in August The range of securities registered in omnibus accounts was extended in July 2010 to multiple-listed, international structured products, at the time the first such products were listed at the Bucharest Stock Exchange. In order to provide investors with the choice of account type (beneficial owner or omnibus), and to introduce a more sophisticated model for borrowing and lending, which would include collateral management, Depozitarul Central, together with the Bucharest Stock Exchange, had several meetings and exchange of views with the National Securities Commission, aimed at extending the omnibus accounts and the new settlement model to all the securities listed at the Bucharest Stock Exchange. As a result of these discussions, and after the consultation of market participants, the National Securities Commission developed and approved a new regulation in March 2010, which included the omnibus accounts and a new, more sophisticated model for borrowing and lending, with collateral management facilities. According to the new National Securities Commission regulation, an intermediary has the possibility to use a combination of beneficial owner and omnibus accounts, or exclusively omnibus accounts, for all the securities, provided that they meet certain requirements, one of which is to have an audited back-office system to support the operations related to omnibus accounts, including reconciliation and reporting. Depozitarul Central s system has been enhanced to provide new functionalities for borrowing and lending, and for reporting the holdings registered in omnibus accounts, as well as for the daily reconcili- Page 270

7 Tanasoiu:JSC page.qxd 03/01/ :57 Page 271 Tanasoiu ation process of holdings registered in omnibus accounts. The Romanian capital market made a leap in January 2011, when the omnibus accounts, the new settlement, and borrowing and lending mechanisms were used for the first time in conjunction with a domestic share listed exclusively at the Bucharest Stock Exchange. On the 25th January, 2011, one of the biggest companies in Romania, Fondul Proprietatea (the Property Fund) was listed at the Bucharest Stock Exchange. The company is an investment fund, with a portfolio that includes many of the most important Romanian companies. Fondul Proprietatea was set up by the Romanian Government in December 2005 to indemnify persons whose assets were abusively expropriated by the communist regime, especially in cases when restitution in kind would not be possible. The fund soon became one of the more liquid blue chips listed at the Bucharest Stock Exchange. In July 2011, the National Securities Commission decided that omnibus accounts and the new settlement and borrowing and lending mechanisms should be used for another blue chip share already listed at the Bucharest Stock Exchange; namely Petrom, the largest oil and gas producer in South Eastern Europe. The migration process worked smoothly, and currently approximately 60 per cent of the turnover of Bucharest Stock Exchange is made by domestic and international shares, bonds and other types of securities, for which the omnibus accounts and the new settlement, borrowing and lending mechanisms are used. A very recent decision by the National Securities Commission provides for the extension, by mid-november 2011, of omnibus accounts and the above-mentioned mechanisms to the companies included in the BET index of the Bucharest Stock Exchange. This is expected to raise the proportion of Bucharest Stock Exchange turnover made through omnibus accounts to about 80 per cent. It is expected that the omnibus accounts will be extended to all the securities listed at the Bucharest Stock Exchange, and that investors will be able to choose between beneficial owner accounts and omnibus accounts, and will find in Romania the same flexibility and mechanisms that they currently have in the major European capital markets. It should be further noted that the intermediaries that meet the requirements listed in the National Securities Commission s regulation are already able to use omnibus accounts or a combination of beneficial owner and omnibus accounts for all the securities listed at the Bucharest Stock Exchange. The number of such intermediaries is constantly increasing. The development of the new borrowing and lending service, including the supporting technology, was completed in 2010, and functional testing with market participants was organised at the end of the same year. Depozitarul Central acts as an agent and does not take principal risk. The collateral management and asset evaluation is performed by Depozitarul Central, as agent, for the lending agreements between the principal accounts of the participants to the RoClear system. All securities loan operations are based on a standard contract, which was developed in accordance to the Global Master Securities Lending Agreement. The borrowing and lending instructions entered by the participants are validated and matched in the RoClear system and the loan operation is recorded. The securities being lent are transferred from the lender to the borrower, and the collateral is transferred from the borrower to the lender. The securities being lent and the Page 271

8 Tanasoiu:JSC page.qxd 03/01/ :57 Page 272 Evolution of the Romanian post-trade environment collateral are evaluated daily by Depozitarul Central at market prices, and the two parties are advised accordingly. If the collateral is not enough, the borrower will be notified to supplement it. If it is in excess, the borrower may withdraw the respective portion. Also, the borrower can substitute the collateral, subject to the lender approving such substitution. On the maturity date, the securities being lent are transferred automatically from the borrower to the lender and the collateral is transferred automatically from the lender to the borrower. The new borrowing and lending mechanism is serving as a facilitator to the sett - lement process and further increases the operational efficiency. It also offers better protection in case of bankruptcy, since it is not dependent on the provisions of the bankruptcy law in different jurisdictions. The lending agreements between participants and clients, or between two clients, are managed by the participants on behalf of their clients. The respective participants have the obligation to instruct Depozitarul Central to record the transfers as a result of the lending agreement, as well as the collateral. The lending agre - ement in such cases is also based on the Global Master Securities Lending Agreement. The implementation of the new borrowing and lending service was an important step forward for the Romanian capital market, and a very good example of the good results that can be achieved by the close collaboration between users, market infrastructures and regulators. The author would like to claim that Depozitarul Central is one of the very first depositories to have launched a securities borrowing and lending service, under the Global Master Securities Lending Agreement, for both fixed income and equities, domestic and international. Building from this, the organisation intends to enhance further the entire collateral management services available to its clients. The new processes and services targeted the standardisation processes by using harmonised standards and communication protocols. Depozitarul Central has carried out several projects in order to upgrade the technical infrastructure and develop new services for its clients. The new interface, RoClear Connect, was upgraded in 2008/2009 to provide a new user-friendly software package, fully compliant with ISO In 2010, Depozitarul Central and the key market players joined forces to take full advantage of the end-to-end standards and to drive further the adoption of these standards by the Romanian community. The National Market Practice Group (RO NMPG), established by Depozitarul Central after signing a Memorandum of Understanding with SWIFT in March 2010, started to formalise the domestic market practices and improve operational efficiencies through increased automation. The manual for Settlement and Reconciliation messages was finalised by the National Market Practice Group in 2011, and served as a basis in the implementation of SWIFT messages communication. The new state-of-the-art communication channel, RoClear SWIFT, which supports SWIFT messages for Settlement and Reconciliation, will become operational on the 1st November, Depozitarul Central will also maintain the current communication channel, RoClear Connect, for participants that are not SWIFT enabled. The improvement in market efficiency is consistent with increasing integration of the world markets. Its development plans connected with the introduction of the new system take into account the recommendations included in the protocol concerning the Page 272

9 Tanasoiu:JSC page.qxd 03/01/ :57 Page 273 Tanasoiu elimination of the first Giovannini barrier, both in the area of communication and data standardisation. Both systems provide security and integrity over the instructions by requiring the customer to perform user identification and authentication procedures. Disaster recovery and business continuity plans are in place in order to ensure the continuity of the services in the event of serious malfunctions at the production centre. The contingency infrastructure and procedures are subject to regular testing and maintenance, being approved by the competent authorities. Depozitarul Central employs an audit trail, including logging of access to production data and changes of production programmes, and the functions of programme development, system administrators and operations are separated. CHALLENGES AND PERSPECTIVES Europe s settlement landscape is set to see major changes in the coming years, which will impact the services offered by CSDs and the way market players access them. The European financial market is becoming more integrated and, as a result, the competition between market infrastructures will intensify, being driven by legislative changes and progress in technology. The business model of market infrastructures is changing as a response to the new realities of the European financial market. Depozitarul Central understood early the unprecedented changes of the European post-trade landscape and evolved from a product-based organisation into a client-focused organisation. It put in place sales and relationship management teams, which maintain a permanent dialogue with its clients, in order to identify their needs and requirements, and to propose improvements in its existing products and services, as well as the development of new ones. Depozitarul Central was among the first CSDs outside the Euro currency area which realised that the TARGET2 Securities initiative could not be ignored and that it was important to understand at an early stage the benefits it would bring to its client base. TARGET2 Securities will definitely change today s business models in the post-trade environment, and, despite the threats that many perceive, Depozitarul Central believes that it will bring opportunities and is determined to capitalise on these. TARGET2 Securities will act as a catalyst for harmonisation in the European post-trade environment. The organisation strongly believes that the ones who will reap the greatest benefits from TARGET2 Securities are those who are able to adapt at an early stage and offer a one-stop shop and value-added services to their domestic and international clients. Depozitarul Central intends to provide clients with direct and indirect access to TARGET2 Securities and accommodate their requirements to Euro and non-euro settlements. The organisation s goal is to act as the entry point for all major institutional clients and in so doing, also provide a full array of asset-servicing capabilities. Depozitarul Central now provides a centralised dividend payment process, which enables investors to receive money in a much more expedient manner. In this respect, the organisation is also working to put in place a tax reclaim service, including standardised documentation, to ensure a smooth and efficient payment process. In line with all its major clients, Depozitarul Central also intends to join TARGET2 Romania, the Euro payment system, in order to provide securities settlements in Euro central bank money. It is also embarking with key market participants to provide SWIFT-enabled corporate actions communication, in line with Page 273

10 Tanasoiu:JSC page.qxd 03/01/ :57 Page 274 Evolution of the Romanian post-trade environment the latest standards of the industry, aimed at generating greater efficiency in corporate actions processing. In July 2010, Depozitarul Central established the TARGET2 Securities National User Group (T2S RO NUG) in order to involve the Romanian financial community in this breakthrough project. Depozitarul Central has obtained agreement from the European Central Bank to participate in the first wave of implementation of TARGET2 Securities. This is great news for the organisation s customers, giving them the possibility of efficiently settling all of their Eurozone and other T2S securities in central bank money. Depozitarul Central is, therefore, uniquely positioned to provide an efficient pan-european gateway to European securities, thanks to this important European Central Bank initiative. CONCLUSION Although Depozitarul Central only became operational as a separate legal entity in January 2007, the Romanian post-trade industry has significantly enhanced its offering, reduced risks and achieved major efficiency improvements. Its aim is to improve the industry s capability to offer innovative, safe and efficient solutions to the investors. Depozitarul Central shares, with the European public authorities, the goal of a single, integrated, low-risk and low-cost post-trading system for Europe. However, the main obstacles remain, including material differences in the fiscal and regulatory environments that apply to the post-trading industry. The financial crisis underscores the urgency to remove the outstanding barriers. Although the vision of Depozitarul Central, to become a regional hub for South-Eastern Europe, while providing the best services for developing the Romanian capital market, is an ambitious one, due to the complexity of its objectives and the European requirements, each achievement is a brick placed on the foundation of the Romanian capital market. In the end, when the creation of this edifice is concluded, one will be able to say, without any doubt, that Romania has built a strong, modern European capital market. Page 274