Investors on the Bucharest Stock Exchange to get access to a short-selling option this year

The Bucharest Stock Exchange (BSE), Romania's core bourse, will implement the short-selling system starting the second half of the year and all issuers will have nominee accounts, president of the Central Depository, Ovidiu Sergiu Pop said.

Currently, the Central Depository and the securities watchdog CNVM monitor the global accounts of Erste Bank (EBS) investors. Erste Bank is listed on the international tier of the BSE and is the majority owner of Romania's largest bank by assets, Banca Comerciala Romana.

"Starting July we want to apply the nominee accounts for all issuers from the BSE," Pop said. This will hike liquidity as more investors are likely to enter the market owing to the existence of nominee accounts, Pop added.

Moreover, the Central Depository is working on creating a new market, less regulated, where Romanian investors can buy foreign shares from Bucharest.

Short-selling is the practice of selling securities the seller does not then own, in the hope of repurchasing them later at a lower price. This is done in an attempt to profit from an expected decline in price of a security, such as a stock or a bond, in contrast to the ordinary investment practice, where an investor purchases a security in the hope the price will rise.

A nominee account is a type of account in which a stockbroker holds shares belonging to clients, making buying and selling those shares easier.

The Central Depository started activity on January 3, last year, being the only provider of depository, registry and corporate actions services to the issuers of securities traded on regulated markets and alternative trading systems in Romania.

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