The Bucharest Stock Exchange and the Bucharest Clearing House (CCB) recently announced that 90% of the interest earned by the CCB on the cash collateral will be redistributed to its members.

In doing this, the management of the Bucharest Stock Exchange hopes to attract brokers to the derivatives market of the BSE and to increase the liquidity of term securities.

Valentin Ionescu, the managing director of the BSE said: "Through this measure passed by the Bucharest Clearing House, we are moving forward towards our goal to increase the liquidity of the derivatives market and we are looking to significantly improve the conditions for derivatives trading on the Bucharest Stock Exchange.

This approach is a first for Romania and we hope that we will elicit a positive response from brokers, by getting them to become increasingly involved in the trading of derivatives on the BSE".

The aforementioned statement is interesting. It"s possible that the managing director of the BSE wants to draw attention to the fact (by calling it a "first") that Sibex does not redistribute the interest earned to the members of its clearing house.

"This was a competitive maneuver", said Nicolae Gherguş, a member of the Board of Directors of the Bucharest Clearing House, who added that the amounts which would be redistributed to brokers are very small for now. Mr. Gherguş added:

"The decision of the Bucharest Clearing House was one for the long term, and it was more a matter of principle. The amounts which we will distribute will increase in time, in line with the collateral deposited by the participants".

At the same time, the statement by Gherguş reveals the explanation behind the generosity of the BSE: the amounts distributed by the BSE are small (because the derivatives market of the BSE is at an incipient stage - its main source of revenue is