According to the press release posted on the website of the Ministry of Public Finance:
“The new tool introduced by the Government will be a safe alternative investment/savings for the population, guaranteed by the Romanian state and Government bonds will be issued in dematerialized form. The Ministry of Finance is going to select a group of financial institutions that will act as intermediaries and ensure distribution issue among investors.
The securities will be available to all citizens in a simple and transparent way. Government securities may be purchased directly and subsequently traded through the stock exchange, which will help improve the financial literacy of the population.”
The Government securities for the population have not been issued since 2005, when they were distributed by local treasuries in a materialized form.
Given the increased interest in recent years of the population for the government securities, and to facilitate accessibility to the widest possible number of investors, the Ministry of Finance reduced the nominal value of the Government securities market from 10 000 lei 5000 starting with October 1, 2013.
The most important advantage for the purchase of Government securities is tax, considering the fact that compared with other investment instruments, Government securities are exempt from tax payment. In addition, the Bucharest Stock Exchange has decided recently not to charge fees for operations performed on the primary market for government securities, so neither the seller (MFP), nor buyer will pay any transaction costs, according to a release of the Bucharest Stock Exchange.
The Ministry of Finance is the sole administrator of Government debt and Government securities is one of the debt instruments used in securing the financing needs of the budget deficit and Government debt refinancing. These securities are issued on the primary market through primary dealers who buy Government bonds, both in its own name and on behalf of their clients, auction sessions organized by the National Bank of Romania. After issuance, the transactions for purchase/sale between holders of Government securities on the secondary market surveillance is conducted by the National Bank of Romania and/or regulated on the secondary market of the Bucharest Stock Exchange.
The Government Project also covers the steps that are followed by the Ministry of Finance in its efforts to launch a dedicated state securities issued to the population, namely: the substantiation of the need; concluding agreements with Bucharest Stock Exchange and the Central Depository and the FSA, as appropriate, in order to determine the modality of placement and settlement of the issue; selection of the intermediate/Syndicate which will manage the distribution and underwriting of the issue; drawing up the prospectus; settlement of funds by the Central Depository.
The Pilot Project on Government securities for the population will be released, at the earliest, by the end of this year.