Investment Operations

Clearstream to Link Romanian Equities to Its Network on July 1

Romania Joins Clearstream ICSD
  • Romanian equities to become eligible via Clearstream’s network
  • Government and municipal bonds eligible in Clearstream since 2010, corporate bonds since May 2020
  • Easier access to Romanian capital market for international investors; Romanian markets to benefit from funding opportunities
  • High demand expected due to Romania receiving status of Emerging Market by the global index provider FTSE Russell in September 2020

A new domestic link will enable settlement and safekeeping of Romanian equities through Clearstream’s international infrastructure, providing access to Romanian capital markets for international investors and in turn new funding opportunities for Romanian markets.

On July 1, 2020, Clearstream, Deutsche Börse Group’s international central securities depository (ICSD), will connect local Romanian equities to its international network. BRD Group Société Générale will act as local depository partner for Clearstream, connecting in turn to the Romanian central securities depository (CSD) Depozitarul Central.

According to the depository, this will enable settlement and safekeeping of all equities denominated in Romanian Leu (RON) through Clearstream’s international infrastructure, improving efficiency with international standards while reducing costs for investors.

Clearstream has been present in the Romanian market offering government and municipal bonds since 2010. In May 2020, it added local corporate bonds to its ICSD infrastructure and is now completing its portfolio with local equities.

“Being able to enter emerging markets via an internationally established post-trade environment is very attractive to investors all over the world. Romania has been already a long-time part of our global network,” said Jan Willems, Head of Global Markets at Clearstream. “Clearstream now making Romanian local equities available to international investors will add to the market’s attractiveness, increasing demand and thus liquidity of Romanian equities. The local market will benefit from a wider range of sources of funding, contributing to its further development,” Willems said.

Analysts say the new arrangement has been a requirement heard more and more often in recent years from foreign investors and also from Romanian issuers, especially after the inclusion of Romania on the watch-list for promotion to the secondary emerging market status by one of the leading global index providers, FTSE Russell. “The reclassification of the Romanian capital market status, entering into force in September 2020, will be an achievement very long-awaited by investors, intermediaries and all stakeholders, and also the most important acknowledgment of our efforts to develop the Romanian capital market,” said Silvia Buicanescu, CEO at Depozitarul Central.