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Purchasing initiator

The stages of trading commercial receivables through the agency of RCE

with respect to the Purchasing initiator

1. The submission of the initiator's purchase offer

The initiator (shareholding member, affiliated member or RCE client) shall submit the following documents to the Receivable and Financial Products Department within RCE:

the purchase order which includes minimum data about the receivable (annex to the regulation);
the power of attorney granted to the person which shall represent it, if applicable (annex to the regulation); in the case of the natural person initiators, the power of attorney shall be legalized by the notary public;
the undertaking under authorized signature that the purchase order of the respective receivable is irrevocable throughout the entire validity period thereof (annex to the regulation);
an affidavit whereby it declares that it does not act further to un understanding with the debtor for the purpose of the recovery by such debtor of its own receivables, and that it does not hold, directly or indirectly, participations exceeding 10% in the debtor’s social capital, respectively that the debtor does not hold, directly or indirectly, participations exceeding 10% in the purchasing initiator's social capital (annex to the regulation);
the evidence attesting to the payment to RCE of the duty for the registration of the purchase order;
the undertaking to pay the fee to RCE, if the purchasing initiator becomes a party in a receivable assignment contract (annex to the regulation).

2. The verification and publication of the advertisement regarding the initiator's purchase offer

The Receivable and Financial Products Department shall verify, besides the documents provided under item 1, whether, within maximum 2 business days from registration of the purchase order, the initiator deposited in the RCE’s account a financial security representing 50% of the level of that requested, and if a complementary offer is registered, the security shall be supplemented up to 100% by the business day preceding the trading session, at the latest.

After the verification and registration of all the conditions and documents related to the purchase order, RCE shall publish it in a national daily newspaper, shall post it on the website of the exchange (www.brm.ro) and shall send it to its own shareholders by fax or e-mail.

The advertisement shall comprise, as a rule:

the debtor’s denomination/name and basic identification data;
the value of the receivable intended to be traded;
the minimum value which may be supplemented in the responding (complementary) orders;
the date of the trading session.

3. The submission, verification and registration of the responding order of the selling bidder

If a natural person or legal entity intends to sell the receivables requested to be purchased, he/she/it shall submit the following documents to the Receivable and Financial Products Department within RCE:

the responding order for the sale of the published receivable (annex to the regulation);
the power of attorney granted to the person who shall represent him/her/it, if applicable (annex to the regulation); in the case of the natural person bidders, the power of attorney shall be legalized by the notary public;
an affidavit of the selling bidder, under authorized signature, declaring that the receivable arose further to the supply of goods/services to the debtor and that it is not fully set-off/assigned (annex to the regulation);
the evidence attesting to the payment to RCE of the fee for the registration of the sale order;
the invoice certifying the receivable or other equivalent certifying document.

The Receivable and Financial Products Department shall verify, besides such documents, the fulfillment of the following conditions:

the value of the receivable intended to be traded shall exceed or be equal to the minimum value mentioned in the responding order;
the receivable to which the sale order refers shall not form the object of a receivable assignment or security interest in personal property contract registered in the “Electronic Archive of Security Interests in Personal Property” or it shall not have been fully set-off;
the establishing invoice shall be expressly accepted by the debtor, if it is not registered according to Government Emergency Ordinance No. 77/1999.

4. The performance of the trading session

The receivables shall be traded within outcry auctions on the floor of RCE and at the RCE’s representative offices in the territory.

The trading session shall take place under the direct management of a session coordinator, with the participation of the bidders, under the supervision of a commission made up of an odd number of members – appointed by the Chairman-Managing Director of RCE, but not less than three, which may also include the authorized representatives of the initiators, chaired by the Chairman-Managing Director of RCE or by the person appointed by him/her.

An entry shall be assigned to each scheduled order of a initiator. If for one of the entries of the initiator during a trading session no bidder registered, the commission shall declare the trading session closed on such entry; and the respective entry shall be rescheduled for the following trading session.

The orders sent by the purchasing initiator, respectively by the selling bidder are implicitly valid for maximum 6 consecutive trading sessions and, upon the registration of the order, the initiator or the bidder may specify a smaller number of consecutive trading sessions. Scheduling an order for more than 6 consecutive sessions entails the re-registration of such order.

On the trading day, prior to the commencement of the trading session, the purchasing initiator shall communicate to the Chairman of the commission, in writing, the maximum percentage of the value to be traded requested for the purchase of the respective receivable and, potentially, the starting percentage.

a. Opening of the Trading Session

Upon opening the trading session, the Chairman of the commission shall announce:

the list of the receivables to be traded in the respective session, presented according to their entries in the order of their registration with RCE;
the value remained for further trading (which includes VAT) from the initiator's orders scheduled for the current trading session;
the starting percentage of the auction for each order scheduled for the current trading session;
the auction peak (it is the initial peak, expressed in percentage, used during the performance of the auction);
the additional peak (it is the peak, expressed in percentage, used as of the moment when two or several bidders accept the announced percentage);
the reserve peak (it is the peak, expressed in percentage, used to decide between bidders if no bidder offers the announced percentage);
the denomination/first name and surname and the floor numbers of the bidders, in the order of their registration.

b. Bidding of the Percentages to Be Used to Calculate the Prices for Which the Receivable Assignment Contracts Shall Be Concluded

The receivable shall be bid through outcry auction, by bidding percentages on an increasing basis; the starting percentage is that specified by the purchasing initiator.

A bidder may no longer participate in the auction starting from the moment when it no longer accepts the announced percentage, but it accepted, by raising the floor number, the previously announced percentage, provided that the currently announced percentage be accepted by at least one other bidder.

If no bidder accepts the announced percentage, its successive increase shall be made without exceeding the maximum percentage communicated by the purchasing initiator; the session coordinator shall announce the “final peak” before calling out the percentage which equals the maximum percentage requested by the selling/purchasing initiator.

The percentage-related condition means that the percentage, which has to be announced by the session coordinator is lower than or equal to the maximum percentage communicated by the purchasing initiator.

The value-related condition means that the value to be traded remaining in the initiator's order after the conclusion of a transaction is higher than or equal to the minimum value specified by the initiator.

The remaining value represents the value left for further trading if such value is lower than the minimum value specified by the initiator.

c. Closing of the Trading Session

After the Chairman of the commission supervising the transactions announces the conclusion of the trading of an entry:

the initiator, the successful bidders and the session coordinator shall sign the trading notes, in three originals, one for each party;
the members of the commission, the successful bidders and the purchasing bidders which obtained the statute as reserve shall sing the trading minutes.

The trading minutes shall include for each traded entry:

the denomination/first name and surname of the initiator;
the name of the debtor of the receivable;
the elements of every invoice or other eqiuvalent certifying document;
the denomination/first name and surname of the successful bidders;
the value of the receivable assignment contract;
the prices for which the receivables were traded;
the fees due to RCE.

5. The execution of the assignment contracts

The receivable assignment contracts shall be drafted based on the minutes of the trading sessions, in three originals, one for each party and an original for RCE and shall be executed by the parties within three business days from the date on which the trading session took place.

The prices of the receivable assignment contracts shall be pain in RON, within three business days from the execution of the assignment contracts. The successful purchasing initiator shall pay the trading fee to RCE within maximum 2 business days from the date on which the trading session took place. The conditions for the return of the securities are provided in the regulation.

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