Moldova's legislation on supervision of investment firms harmonized with EU rules

The legislation regulating the activity of investment companies providing services on the capital market has been harmonized with European law. The parliament has adopted, in the second reading, a draft law on the prudential supervision of investment firms.

The document, prepared by the National Commission for Financial Markets (NCFM), aims to strengthen the regulatory framework for the capital market. The initiative takes into account the recommendations of the European Commission to continue harmonizing the regulatory framework with the EU acquis and transposes more EU directives and regulations. The authors note, in the explanatory memorandum, that full alignment with the EU acquis will strengthen the stability of the capital market, improve investors’ protection and enhance the efficiency of prudential supervision.

The draft law sets out rules on the principles and specific features of the prudential supervision of investment firms and their groups. The proposed provisions also concern initial capital requirements applicable to investment firms, administrative measures and sanctions in case of non-compliance, as well as ensuring transparency in the supervision process.

The provisions will apply to investment firms supervised by the NCFM. In the case of credit institutions operating on the capital market, prudential supervision will be exercised by the National Bank of Moldova.

According to the document, the levels of initial capital required for the authorization of investment firms will be increased. Thus, for companies licensed to trade on their own account or to provide underwriting services, capital will be increased from 300,000 euros to 750,000 euros. At the same time, the minimum capital for investment firms that do not trade on their own account and do not involve asset custody will increase from 50,000 euros to 75,000 euros. In this context, the draft law provides for transitional provisions designed to ensure gradual implementation and avoid major disruptions in the activity of non-bank investment companies until the document enters into force.

In Moldova, 12 investment firms are registered, of which 7 are banks and 5 are non-bank investment companies. Most provide limited services, focusing on the execution of orders for financial instruments and advisory services. At present, no investment firm in the country operates a multilateral trading facility or carries out significant proprietary trading or underwriting of financial instruments.

The law will enter into force on June 1, 2027, except for certain provisions that will apply on the date of Moldova’s accession to the European Union. At the same time, on the date the law enters into force, the provisions of the Law on the Capital Market related to capital adequacy requirements and to the cessation of capital market activities by trustees will be repealed.