let’s talk about non-banking financial market
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ACADEMIC LABORATORY
Let’s talk about non-banking financial market
JULY 2016
Cuprins
01. Financial Supervisory Authority
02. Non-banking financial markets in 2015
03. Consumers’ Protection
Financial Supervisory AuthorityLet’s talk about non-banking financial market
01
Let’s talk about non-banking financial marketFinancial Supervisory Authority
ensuring the stability, competitiveness and proper operation of the financialinstruments markets, promoting the trust in these markets and in theinvestments in financial instruments, and ensuring the protection of operatorsand investors against disloyal, abusive and fraudulent practices;
promoting the stability of the insurance activity and protecting the rights ofpolicyholders;
ensuring the efficient operation of the private pension system and protectingthe interests of the participants and beneficiaries.
FSA contributes to the consolidation of an integrated operation and supervisory framework of the non-banking market, of the participants of and operations performed on such markets and aims at:
Romanian competent authority within the meaning of Art. 11 of Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation, as subsequently amended and supplemented.
Pentru atingerea obiectivelor sale legale, ASF și-a construit arhitectura instituțională pentru a asigura:
Authorizing and Regulation of participants on the non-banking financial markets in Romania
Supervision for non-banking financial markets in Romania
Non-banking financial services Consumers’ protection
Let’s talk about non-banking financial marketFinancial Supervisory Authority
What have we done in 2015?
Financial stability and trust in the
playfield
Alignment to EU legislation
and strengthening
legislative framework
Re-credibilization for FSA and EU
institutional positioning
Consumers protection
Let’s talk about non-banking financial marketFinancial Supervisory Authority
Main actions in 2015
2015: Insurance
Year
BSR & BSRE Auditing exercise
for insurance companies
Surveillance had intensified and
financial redressing measures were
taken
A complete and modern legislative
pack was elaborated
Important reforms on
capital market
Clarifying the situation of
RASDAQ market
Reforming the legislative and
implementing some EU legislation
Removing some obstacles in
functioning of the market
Improve regulation for
private pensions market
Modifying the primary legislation
Relaxing the investment policy
Optimization for the risk and
provisioning frame
Finalizing FSA’ institutional
reform
Major changes in the FSA’ flowchart and institutional
governance
New wages policy
Financial Studies Institute
Let’s talk about non-banking financial marketFinancial Supervisory Authority
Improving consumers’ trust
Increasing development and maturity of markets:- Stimulate the development of capital
market (S.T.E.A.M.)- Stimulate the development of
insurance market - Stimulate long term savings in private
pensions funds (LIFE)
Ensuring an appropriate, prudent and sustainable regulatory framework
Strengthening the efficiency of supervision
Upgrading instruments of FSA’ intervention
Strengthening FSA’ institutional capacity
FSA participation in European integration based on shared values
What is next?
Let’s talk about non-banking financial marketFinancial Supervisory Authority
Non-banking financial markets in 2015Let’s talk about non-banking financial market
02
Non-banking financial markets in 2015Let’s talk about non-banking financial market
72.75% 70.18% 67.88% 64.11% 60.81% 57.34%
9.35% 9.28% 10.05% 10.78% 11.74% 11.88%
0%
20%
40%
60%
80%
2010 2011 2012 2013 2014 2015
Financial sector assets vs GDP
Capital market
Private pensionsInsurance
2010 2011 2012 2013 2014 2015*Banking market 72,75% 70,18% 67,88% 64,11% 60,81% 57,34%Non-banking financial market 9,35% 9,28% 10,05% 10,78% 11,74% 11,88%
Investment Funds 5,33% 5,01% 5,16% 5,62% 5,92% 5,89%Private pensions Funds 0,87% 1,21% 1,72% 2,31% 3,03% 3,24%Insurance companies 3,15% 3,06% 3,18% 2,85% 2,80% 2,75%
Financial market in GDP 82,10% 79,46% 77,93% 74,89% 72,55% 69,22%* Assets reported for June 2015
* Assets reported for June 2015 and eliminated the duplicated data
Investment funds
Insurance
Represents approx. 29% of the banking and non-banking
financial assets
Listed companies
Private pensions
% Total financial Assets 2015*Banking market 71,05%Non-banking financial market 28,95%
Investment Funds with no Romanian shares’ investments 6,41%
Private pension Funds with no Romanian shares’ investments 3,31%
Insurance companies with no Romanian shares’ investments 3,39%
Stock exchange capitalization for local companies 15,84%
What is our role in financing the economy?
Non-banking financial markets in 2015Let’s talk about non-banking financial market
Insurance market
35 insurance companies out of which 20 general insurance (AG), 8 life insurance (AV) and 7 composit activity
Gross written premiums worth 8,75 mld. lei, increasing with 8,2% as 2014 (7,6% growth for AG, 10,8% growth for AV)
Top 3 market share gross written premium (PBS): Allianz-Țiriac, Omniasig, Groupama (Ʃ 32,41% of total)
Distribution of PBS-AG: 44,10% of total in Bucharest, 10,51% in North-West region and for PBS-AV: 83,53% in Bucharest, 3,28% North-West region
More at: http://www.asfromania.ro
Evolution of gross written premiums
Non-banking financial markets in 2015Let’s talk about non-banking financial market
Capital market
Trades on Bucharest Stock Exchange (BVB)
On BVB the shares are preffered at trading (89,97% of total trading value).
Mai multe date: http://www.asfromania.ro
Non-banking financial markets in 2015Let’s talk about non-banking financial market
Total assets of investment funds
Private pensions’ market
Pillar II – new entry participants Sept.2014 - Sept.2015 Pillar II Investment portfolio structure (total, mld.lei)
Pillar III – new entry participants Pillar III Investment portfolio structure (total, mil.lei)
More at: http://www.asfrom
ania.roNon-banking financial markets in 2015Let’s talk about non-banking financial market
Consumers’ ProtectionLet’s talk about non-banking financial market
03
Consumers’ ProtectionLet’s talk about non-banking financial market
Who are the consumers?
6.459.626 participants in Pillar II and 373.437 participants in
Pillar III
319.510 investitors in open-end funds and 91.610 closed
-end funds investors
13.512.725 insurance contracts, of which 10.176.751 general insurance contracts and 3.335.974 life insurance contracts
date la sfârșitul lunii septembrie 2015
And 8.466.635 shareholders
Why is important to have insurance, to make investments or to have a private pension?
Helps at limiting the financial losses when they occur
Helps an individual/family to be prepared for an unexpected event, to raise the incomes or to have a quiet life after retirement
Plays an important role in most of the financial planning
In Romania, according to an international study, only 1 out of 5 Romanians have knowledge about the financial market and only 15% save and invest to have money at
elderness.
Consumers’ ProtectionLet’s talk about non-banking financial market
Age Childhood Teenage Adult Retirement
Eventsin life
GamesWhishes
WhishesStudies
Fun
FamilyHouseJobs
Holidays
RetirementNephews
Unexpected events in life include losing the job, accidents, illness
- - - - - - - - Common elements – importance of financial planning - - - - - - - -
- Incomes - - Expenses - - Risk - - Responsabilities - - Whishes -
Get informed!
Consumers’ ProtectionLet’s talk about non-banking financial market
Consumers’ Protection Directorate
Monitoring, proactive - irregular practices, fraudulent, inaccurate, unauthorized,misconduct, misleading advertising, innovative products etc.
Financial Education, proactive – consumer information, increasing welfare and the level of financial inclusion, awareness and financial literacy for children, millenials, adults.
Management of petitions, reactively – investigating complaints from consumersof financial services, clients of supervised entities
Public relations – assistance for consumers, regaining trust, transparency ofprocesses
Consumers’ ProtectionLet’s talk about non-banking financial market
Access to financial services
and financial capabilities
Financial education
Financial literacy
Consumers’ protection
Consumers’ ProtectionLet’s talk about non-banking financial market
Priorities for consumers’ protection:
• Monitoring rules of conduct that can affect customers and the market or that break the law
• Protecting investors against incorrect or abusive, fraudulent practices• Reviewing contracts as standing for consumers’ protection• Implementing standars for business conduct:
– Mandatory transparency rules – Objective recommandations and high quality assistance for clients – Avoiding conflict of interests– Ethics in relations with the consumers– Duty of care as improving responsability of financial entities towards c
onsumers • Ensuring non-discriminatory treatment and access to goods and services
which comply consumers’ needs• Reducing financial educational defficit• Access to education, based on needs, and building financial capabilities • Prompt administration of petitions received and facilitating their submission• Sustaining protecting funds – Investors Compensation Fund, Insurance Guarantee
Fund, Private Pensions Guarantee Fund, Street Victims Fund.
Consumers’ ProtectionLet’s talk about non-banking financial market
ASF Financial Education Program
THANK YOU!
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Stylish designFACEBOOKhttps://www.facebook.com/asf.romaniawww.asfromania.ro
A.S.F.
office@asfromania.ro
Telverde:0800 825 627
ASF made for you a financial education web page:www.asfromania.ro/edu
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