Investors will be able to bet on the general evolution of the Bucharest Stock Exchange, through a simple trade, after the Romanian National Securities Commission (CNVM) has established the framework for the creation and operation of ETFs (ed. note: exchange traded funds - mutual funds which invest in tradable securities), through a decision published yesterday on its website.
An ETF is an open investment fund listed on the stock exchange which tracks the performance of a recognized stock index.
Ovidiu Dumitrescu, analyst at "Tradeville", considers that the initiative of the CNVM to support the development of the range of instruments available on the Romanian capital market is praiseworthy. "ETF instruments have a series of characteristics which make them easy to use by small investors, as well as by institutionals", he said yesterday, and he went on to say: "After the introduction of ETFs based on the BSE index, small investors will be able to invest, through a simple trade, by betting on the general evolution of the market, whereas asset managers will find it easier to implement "core - satellite" strategies.
The broker says he is optimistic on the results of this project: "We are convinced that, as domestic investors will begin to appreciate the benefits of ETFs, the CNVM will allow an even wider range of assets which can be replicated", Ovidiu Dumitrescu said.
Through this decision, the CVNM defines several terms which will be used in the process to create the set up and operation framework of these institutions, establishes the responsibilities of the entities involved, describes the procedures for the subscription and buyback of shares, as well as the contents of fund documents.
In its project stage, brokerage firm "Tradeville" and the Romanian Commercial Bank made several suggestions to the Romanian National Securities Commission c
