INTERVIEW / Adrian Tanase (BVB): I am worried of a fine from the Competition Council

The potential risk of commencing an investigation in the Competition Council concerning the tariff scheme must disappear, and on the General Assembly's agenda of next week there will be a cancellation of the decision to review the scheme, Bucharest Stock Exchange (BVB) CEO Adrian Tanase said in an interview for AGERPRES.

He pointed out that he is afraid of a fine from the competition authority, but he does not believe, that, in the event of a sanction, there will be reimbursements towards those that were affected. Also, the BVB head talked about how he does not wish for a tariff spike in the future, but on the contrary, a reduction of these, as business grows. Concerning the transaction program, Tanase claims that this could be reduced, and in the future there will be derivative products introduced on the market.

AGERPRES: You have been in charge of the Bucharest Stock Exchange for a few months now. What sort of problems have you encountered?

Adrian Tanase: I wouldn't say that I have found problems. There are just some direction shifts which I would like to implement in the Stock Exchange's strategy. I have found a strategy concern, which isn't so major, but I would like to change the BVB strategy. I would like to focus the stock exchange strategy on the development of secondary capital market.

AGERPRES: Does that imply new products as well?

Adrian Tanase: All of these products, derivative instruments, market access from the investors' side, all of these are measures in the sense of secondary market capital development.

AGERPRES: Were there any issues left behind by the former BVB head?

Adrian Tanase: I can't see anything major left behind by him (ed. n. former head of BVB). There are some aspects that require "fine-tuning" and that can be improved for the purpose of stock system's functionality, especially in the strategy that the Stock Exchange must have from now on, at least during my term. This strategy should be focused on raising liquidities on the market capital. We will focus very strongly on the secondary market. Our efforts for the primary market as well will continue, in the sense of stimulating companies to come in the market, the Government's dialogue for continuing the privatization program, in the sense of educating retail investors. All of these will carry on, but the main focus should be on developing the secondary market.

AGERPRES: Are you afraid that during your term the BVB could receive a fine from the Competition Council?

Adrian Tanase: I personally do not like this event, namely this investigation that could begin. I do not like it and it is a wish of mine that this potential risk go away as soon as possible.

AGERPRES: And do you believe that it will revert to the previous situation?

Adrian Tanase: We have a topic for the next General Assembly's agenda, that of canceling last year's decision which reviewed the tariff scheme of the Bucharest Stock Exchange.

AGEPRRES: In the event of a sanction, will those who were affected receive their money back?

Adrian Tanase: I don't think that there will be a situation of reimbursement. The sums are not that significant, though for a large part of the tariff scheme, which was approved and those fixed costs were not implemented, they will be implemented on the 31st of May. My suggestion, as an executive, for the board, is that no matter the decision taken during the GA of next week concerning the tariff scheme, my recommendation for the board will be to not increase any tariffs at all.

AGERPRES: What about a reduction?

Adrian Tanase: Yes, of course. As I said, my term's priority is to develop the secondary market and its level. The growth of business would be a consequence. This should be our priority, to raise business for the stock exchange and for market participation. When we will have a larger business, we will be able to take into consideration tariff reductions.

AGERPRES: I will return to my previous question, but I will have to ask you to answer with "Yes" or "No". Are you afraid of a fine from the Competition Council?

Adrian Tanase: Yes!

AGERPRES: Do you have an intention to alter the transaction program?

Adrian Tanase: There is such a wish from a part of the market participants. We are studying this issue very seriously and we will make an internal inquiry concerning the transaction and also an internal study concerning the time frames, and based on the internal analysis and a new consultation of the participants, we will decide in the sense of shortening the transaction program. This program is considered to be a lengthy one. I could not give you any indication this moment. This issue will be based on a proposal which we will continue based on the internal analysis. I could say that the large majority of market participants wish for a shortening of the transaction program.

AGEPRRES: Will you continue the financial education programs started by your predecessor?

Adrian Tanase: Fluent in Finance, Investors Forum will go on. We would like to change the message a bit, concerning financial education. We also want to promote the market as being a place for all people, regardless of their financial education and background because the stock exchange, the capital market, is the place where all people's savings should be, regardless of the financial specialization that they have. We would like to send out a message to all investors, so that we could access the potential large majority of retail investors, that do not have their savings in securities.

AGERPRES: You ended up in the BVB coming from the investment fund area. How do you convince someone to place their money there?

Adrian Tanase: We want to convince people to save up, to keep their savings on the capital market. One way of holding on to these savings from the capital market is through investments in funds such as these. Another way of keeping their savings invested directly in either shares or bonds, is to keep their portfolio with the help of a broker, directly, without the means of an asset manager, but they will have to know that when we invest in the market we need to abide to some rules, so that we can mitigate the risks. The two rules that we have to abide to is to make long term investments and that they need to be diversified. As long as he does that, taking into consideration the two rules, and does not invest the money that he needs in an year or two, as long as he diversifies, it is somewhat a step forward concerning the investment. In that moment he will notice that the yield brought by the portfolio he created will be superior to the yield brought forth from a bank deposit. The investment through an asset manager facilitates this diversification and could create a yield over that of the market's.

AGERPRES: Do you believe that the Romanian capital market will become emergent during your term?

Adrian Tanase: I would like that thing to happen. The focus will be on the development of the secondary market, with an effect on liquidity. We all know that liquidity is a topic we never touch. If we do manage to develop the market's liquidity, then we will upgraded to the status of "up and coming market"

AGERPRES: Can this be done just by developing the secondary market? Don't you need the listing of a large company, such as Hidroelectrica and Bucharest Airport?

Adrian Tanase: The primary market is a premise for the secondary market development. A larger primary market would create a premise for a larger secondary market than we could actually have. AGERPRES/(RO - author: Florin Barbuta, editor: Mariana Nica; EN - author: Catalin Trandafir; editor: Adina Panaitescu)