FAQs

General Shareholders Meetings

  • We cannot anticipate as at today how the meeting will take place due to the pandemic’s potential evolution. Please follow the stock exchange announcement regarding the conduct of the GSM, announcement that will be published by the Fund on, or around, 22 September 2021.

  • The mandate renewal process involves 2 steps (similar to the 2017 renewal process when there was a change in the management fee for the Fund Manager). If key commercial terms are approved as proposed, a new shareholders’ meeting will need to be called in the following weeks after the 29 September 2021 GSM. During this subsequent GSM, that we expect to take place in November / December 2021, the Fund’s shareholders will be asked to vote on:

    • Potential changes of the Constitutive Act
    • Updated IPS
    • New AIFM Management agreement
    • Updated remuneration policy of the Fund (updating the existing policy as approved during the 28 April 2021 GSM).
  • During the next GSM (subsequent to the 29 September 2021 one) that we expect to take place in November / December 2021, the shareholders will be asked to vote on:

    • Potential changes of the Constitutive Act
    • Potential buyback programme for 2022
    • 2022 Budget
    • Updated Investment Policy Statement
    • New AIFM Management agreement
    • Updated remuneration policy of the Fund (updating the existing policy as approved during the 28 April 2021 GSM).

     

    The documentation is expected to be published on the date when the calling notice for the meeting is published (after the shareholders meeting that takes place on 29 September 2021).

  • Given the strong stock price performance, we want to make sure that we will be able to continue the daily share repurchases throughout the 12th buyback program and therefore we are proposing an increase in the maximum price from RON 2 to RON 2.5 per share.

  • The maximum theoretical value of the additional distribution fee would be approximatively RON 3.26 million. This value assumes all the remaining shares under the current Buy Back program will be repurchased at the maximum price (2 or 2.5 RON per share).

    However, please note that the actual results may be significantly lower as the two variables depend on the market conditions (price and liquidity). We would like to underline that the increase of the maximum price was proposed as a safety measure to allow FTIS to continue buy backs should the market price exceed RON 2.00 / share and should not be considered in any way an estimate of future prices evolution.

     

    Reference date - 31 August 2021

    Maximum number of shares approved 800,000,000
    No of shares repurchased under current BB12            (up to Reference date) 147,793,314
    Applicable distribution fee 1.00%

     

    1. Theoretical maximum distribution fees under the current approval
    Theoretical maximum no of shares 652,206,686
    Theoretical maximum price RON 2.00 / share
    Theoretical maximum acquisition cost RON 1,304 mn
    Theoretical maximum distribution fee* RON 13.04 mn

     

        2. Theoretical maximum distribution fees under proposed approval

    Theoretical maximum no of shares 652,206,686
    Theoretical maximum price RON 2.50 / share
    Theoretical maximum acquisition cost RON 1,631 mn
    Theoretical maximum distribution fee* RON 16.31 mn

     

         3. Theoretical maximum value of the supplementary fee

             RON 3.26 mn

     

    * Main assumptions used:

    • all remaining shares in the programme will be repurchased
    • the share price will go to the maximum approved price immediately (i.e. 1 September)

     

  • The increase in the distribution fee should be seen in conjunction with the reduction in the base fee from a maximum of 0.70% to 0.45%. These proposed changes are based on the feedback received from investors regarding the upcoming new mandate to start in April 2022.

    The result is greater emphasis on returns being generated for shareholders and the subsequent distribution via established mechanisms such as dividends and share buy backs.

    Please note the distribution fees are only earned when the actual distributions are made, which is based on returns generated with the portfolio companies and subsequent distribution thereof to shareholders. In the absence of generating these returns and distributions, FT risks earning a substantially reduced fee.

  •  The table below shows the value of the distribution fee by applying the 2.5%/ 1.75% to the actual level of distributions performed during 2018-2020 (share buybacks, dividends and/ or return of capital).

    all amounts in RON mn

    Year Total distributions* Proposed Distribution fee 2.5% Proposed Distribution fee 1.75%
    2018 1,870.60 46.77 32.74
    2019 1,081.30 27.03 18.92
    2020 1,483.00 37.08 25.95

    * based on the latest H1 results presentation

    Year Base fee Performance fee Max. fee (incl. Performance fee) Max. fee + 1% Distribution fee 0.45% Base fee + 2.5% Distribution fee

    0.45% Base fee + 1.75% Distribution fee

    2018 41.80 - 48.77 67.47 78.12 64.09
    2019 43.90 - 51.22 62.03 59.96 51.85
    2020 49.00 2.00 57.17 57.17 73.83 62.70

     

  • The proposed changes are based on the feedback received from shareholders, considering the upcoming mandate renewal for the new mandate due to commence in April 2022.

Dividends and Distributions

  • The Annual Cash Distribution Policy is published on the Fund’s website, here.

  • The gross cash distribtions are calculated according to the Fund’s Annual Cash Distribution Policy that you can find here.

    According to the Policy currently in place, the Fund Manager intends to recommend to shareholders for their approval a cash distribution of at least RON 0.05 per share in cash, on an annual basis, subject to applicable law and necessary approvals, to any restrictions under Romanian legal or tax regulations and subject to available financing sources.

    In case of dividend distributions the distributable amount proposed for shareholders’ approval is generally calculated as (1) the Fund’s annual dividend income from portfolio companies, except special cash distributions, (2) plus interest on cash balances, (3) less expenses and taxation and (4) less compulsory allocations to reserves.

    In case of a return of capital, the distributable amount is generally based on the Sole Director’s best estimate according to the latest available financial statements at the time of proposing the respective distribution for the shareholders’ approval, subject to the restrictions under Romanian legal or tax regulations and to available funding.

  • The gross dividend is calculated as the number of the shares held by you at the registration date multiplied by the gross dividend rate per share approved at the General Shareholders Meeting.

    Dividends are paid net of applicable Romanian withholding.

  • No, according to the resolutions approved until now, by the Fund’s shareholders for each dividend or cash distribution, these amounts can be paid only in cash.

  • Yes, the dividend withholding tax will be withheld by Fondul Proprietatea from your gross dividend according with the Romanian Fiscal Code provisions. 

     

  • Yes, this is possible. You will need to complete the applicable ‘Payment Request for Individuals’ form or ‘Payment Request for Juridical Persons’ form accompanied by the relevant supporting documents indicated in the applicable Payment Request form. In particular, you will need to provide a bank statement certified by the bank where the dividends are requested to be transferred, or other documents that prove you are the holder of the specified bank account.

  • The dividend will be paid in RON. However, if you hold a bank account denominated in a different currency than RON, the foreign exchange will be performed by the paying agent (i.e. BRD Groupe Societe Generale) at the exchange rate of BRD Groupe Societe Generale valid on the payment date. Being a foreign payment, the transfer may take longer than 24 hours.

  • The dividends and cash distributions are set in accordance with the Romanian legislation in RON / Lei (i.e. the functional currency of Fondul Proprietatea). However, upon shareholders’ request, Fondul’s paying agent may disburse such amounts in other currency than RON as well, case when the transfer will be impacted by the paying agent’s exchange rate valid on the payment date.

    In case of GDR’s holders, Fondul Proprietatea disburses the amounts in RON to the local custodian of Fondul’s GDRs depositary bank and further, the currency exchange operations is managed by GDRs depositary bank (i.e. Bank of New York Mellon).   

  • BRD will not charge the shareholders any fees out of the amounts due when the payments are made in cash or by banking transfer. In the case of bank transfers in bank accounts which are opened with other bank than BRD, the bank fees (if any) will be levied according to your banks terms of business.

  •  If your holding is kept by a custodian, then you should contact your custodian in case you bank account is not credited after the payment date, otherwise, if you do not have a custodian account and submitted the payment request form, you should contact either Central Depositary or BRD and they will start an investigation free of charge.

  • If you received a different amount than you expected, then you may need to contact the Central Depositary to request a statement of your account as of Registration date. This statement will confirm the number of shares you have and therefore the correct dividend amount due.

  • No unless, that individual is legally appointed and documentation to that effect is provided.

  • No, there is no interest payable for the period between Pay Date and when you actually claim your dividend / submit a request for payment.

  • The dividends and cash distributions are subject to the general statute of limitation.  As such, the shareholders may request these payments only within a three year term with effect from the Payment Date of each distribution.

  • In case your registration details have changed you need to contact Central Depository and submit a request to update your personal data (e.g. name, address). Once the change is performed, the Central Depository will issue a new statement of account confirming the new registration details. With the confirmation statement you can either contact the Paying agent (currently, BRD- Groupe Societe Generale) for collecting the entitled dividend or you can address the dividend payment request to the Central Depository and they will contact the Paying agent for you and request the dividend payment you are entitled to, into your account.

  • Starting with the Payment date approved by shareholders during the General Shareholders Meeting, for each distribution.

  • The Payment Date is the date on which the shareholders can start to claim the dividend through the Paying Agent.

  • The Reference Date is the date by which a shareholder needs to have their shares registered by the Central Depository, in order to be entitled to vote at the General Shareholders Meeting

  • The registration date is the date by which a shareholder needs to have their shares registered by the Central Depository in order to qualify for the dividend or cash distribution.

  • For each case where a shareholder has issued a power of attorney that has subsequently been revoked, please inform Franklin Templeton International Services S.À R.L. Bucharest Branch: 76-80 Buzesti street, Premium Point building, 8th Floor, 1st district, Bucharest, phone number +4021 200 96 28, email office@fondulproprietatea.ro. We will then inform the Paying Agent on your behalf.

  • In 2021 the Fund’s shareholders approved 2 dividend distributions:

    • RON 0.0720 special gross dividend per share: approved by the Fund’s shareholders during the 28 April 2021 Annual GSM, and payable starting 22 June 2021 to the shareholders registered in the shareholders’ registry with the Central Depositary on 28 May 2021.
    • RON 0.07 special gross dividend per share: approved by the Fund’s shareholders during the 16 July 2021 OGSM, and payable starting 27 August 2021 to the shareholders registered in the shareholders’ registry with the Central Depositary on 6 August 2021.

Taxation

  • In case of the disposal of shares of Fondul Proprietatea, the tax obligation rests with the shareholders.

    Individual shareholders

    Generally the net capital gain derived by individual shareholders from the sale of shares is subject to income tax at the flat rate of 10%. The capital gain/loss is calculated per transaction based on the difference between the sale price and the acquisition price of the shares. Based on the Romanian Fiscal Code there is an exemption on the capital gains resulting from the first sale of  shares that are initially acquired (or inherited) as a compensation in accordance to Law 247/2005. The Brokers are responsible for calculating the capital gain or loss per transaction, as well as the annual capital gain or loss and applying the exemptions based on the clients onboarding documentation. The Brokers are required to inform the individual shareholder about the capital gains/losses incurred during the year, no later than the last day of February of each year, for income derived during the previous year.

    The annual capital gain/loss (determined by adding all gains and losses during the year, per source country) can be decreased by losses from the same type of transactions and country carried forward from previous maximum 7 years. Generally, broker and transaction fees charged in connection with the acquisition or sale of shares should be tax deductible.

    Romanian tax residents are required to report the annual capital gains/losses through the Single Tax Return (Declaratie Unica) and to pay the income tax due according with the deadlines set by the Romanian Fiscal Authorities (usually by 25 May of the next financial year).

    If non-resident individual shareholders are tax residents of countries that have concluded double taxation treaties with Romania (and tax residence certificates are available in this respect), they can potentially apply for treaty reliefs to obtain a tax exemption in Romania. Generally, non-resident individual shareholders are required to present to the Romanian Broker the tax residence certificate issued within the meaning of the double taxation treaty, valid for the year when the capital gain is obtained.

    Please note that individual shareholders resident outside of Romania may be required to declare the capital gains derived from the sale of shares on their tax return in their country of residence. Thus, we advise to seek professional tax advice in relation to any tax obligations arising in their country of residence.

    Corporate shareholders

    Capital gains derived by corporate shareholders from the sale of shares are, generally, included in the ordinary income subject to general income tax at the rate of 16%. However, income from the sale of shares of Fondul Proprietatea might be tax exempt if at the moment of the sale of shares, a Romanian corporate shareholder holds at least 10% of the share capital of Fondul Proprietatea for an uninterrupted period of 1 year.

    If non-resident corporate shareholders are tax residents of countries that have concluded double taxation treaties with Romania (and tax residence certificates are available in this respect), they can potentially apply for treaty reliefs to obtain a tax exemption in Romania.

    Irrespective of the applicable tax rate, non-resident corporate shareholders deriving income from the sale of shares of a Romanian resident on the Romanian market, are required to register with the Romanian tax authorities and to file corporate income tax returns with the Romanian tax authorities. Thus, we advise to seek professional tax advice regarding the Romanian tax registration and reporting obligations.

    Please note that corporate shareholders resident outside of Romania may be required to declare the capital gains derived from the sale of shares on their tax return in their country of residence. Thus, we advise to seek professional tax advice in relation to any tax obligations arising in their country of residences.

  • Dividend distribution

    Dividend distributions conducted by Fondul Proprietatea to individual Romanian shareholders as well as Romanian corporate shareholders are generally subject to 5% withholding tax in Romania. However, a dividend distribution conducted to a Romanian corporate shareholder may be exempt from withholding tax if the recipient entity holds at least 10% of the share capital of Fondul Proprietatea for an uninterrupted period of 1 year prior to the dividend payment date. Moreover, Romanian government agencies, Romanian pension funds and Romanian investment fund without legal personality may benefit from withholding tax exemptions provided that certain legal conditions are fulfilled.

    Dividend distributions conducted by Fondul Proprietatea to non-resident individual shareholders as well as non-resident corporate shareholders are generally subject to 5% withholding tax in Romania, unless a reduced tax rate/tax exemption might be applied based on the provisions of double taxation treaties, the EU Parent-Subsidiary Directive or the EU-Switzerland automatic exchange of financial account information agreement. Moreover, pension funds with seat in the European Union or in the Economic European Area may benefit from withholding tax exemptions provided that certain legal conditions are fulfilled.

    Please note that shareholders resident outside of Romania may be required to declare the dividend income distributed by Fondul Proprietatea on their tax return in their country of residence. Thus, we advise to seek professional tax advice in relation to any tax obligations arising in their country of residence.

    Cash distributions resulting from a share capital decrease

    The tax treatment of cash distributions resulting from a share capital decrease is uncertain under Romanian tax law. Based on our current understanding of Romanian tax law, we believe there are arguments to assume that such a cash distribution is not subject to Romanian withholding tax. There is however a risk that the Romanian tax authorities take a different view on the tax treatment of such a cash distribution.

  • Based on the Romanian provisions on social contributions, individual Romanian shareholders of Fondul Proprietatea might be liable to health insurance contributions on investment income (including capital gains and dividend distributions) starting 2018, provided that the total non-salary income for a given year (e.g. income from independent activities, real estate, other capital investments and farming) exceeds 12 minimum gross salaries (i.e. for 2021, the minimum gross salary is 2.300 RON, thus, the threshold for 2021 is 27.600 RON). If the threshold is exceeded, the individual shareholders are liable to a fixed health contribution of 10% applied to the threshold (i.e. 2.760 RON for 2021).

    In such case, the individual investors will need to submit the Single Tax Return (Declaratie Unica), which will include all distributions if it is the case and pay the health insurance contribution according with the deadlines set by the Romanian Fiscal Authorities (usually by 25 May of the next financial year).

  • Investors resident outside of Romania may be required to declare the dividend on their tax return in their country of residence. We strongly recommend investors to seek professional advice in relation to any tax obligations in their country of residence.

Fondul Proprietatea Portfolio

  • We continue to actively manage Fondul Proprietatea’s portfolio holdings to further improve the operational and financial performance of the companies. Although we have seen significant progress overall, we still believe there is a lot of value potential. Corporate governance remains a key focus for us and there are still several State-Owned Companies that should appoint independent board members and professional managers. At the same time, our objective to increase the listed part of the portfolio to 100% remains unchanged. Therefore, we are collaborating with the Government to expand the list of companies to be listed to include Hidrolectrica, Bucharest Airport, Constanta Port, and Salrom. One thing is certain: there is still a lot to be done, both in respect of improving management and achieving necessary corporate actions to create value for Fondul Proprietatea’s shareholders.

Fondul Proprietatea Performance

About Fondul Proprietatea

  • Fondul Proprietatea is a joint stock company operating as a closed-end investment company (Alternative Investment Fund) without a limited set lifetime, incorporated in Romania, trading on the Bucharest Stock Exchange since January 2011. Fondul Proprietatea is registered with ASF as an undertaking for collective investments, from the category of other undertakings for collective investments under register number PJR09SIIR/400006/18.08.2010.

  • Fondul Proprietatea was established in order to assure the financial resources necessary to grant compensations to the persons abusively deprived of their properties by the former communist regime and no longer possible to be compensated in kind.

    Following the fulfillment of some stages strictly determined by law, the titleholders of the compensation rights, established in accordance with the provisions of the special laws, became shareholders of Fondul Proprietatea.

    The current subscribed and paid in share capital of Fondul Proprietatea can be consulted here. Initially, the sole shareholder of Fondul Proprietatea was the State represented by the Ministry of Public Finance. Following the compensation process, the State stake in Fondul Proprietatea has diminished in time. 

    The share capital of Fondul Proprietatea can be modified according to the provisions of the Constitutive Act of Fondul Proprietatea and the Romanian laws in force.

  • Fondul Proprietatea is not governed or administrated by any institution or public authority. Fondul Proprietatea is under the control of the general meeting of the shareholders, like any other company.  In principal, a public institution is defined by law as “any state organization or local autonomous administration that is not an autonomous administration, neither a company”.

    Unlike the budgets of the public institutions, the incomes and expenses budget and the financial statements of Fondul Proprietatea are approved by the general meeting of the shareholders (art. 7, paragraph 3, letter c - the Constritutive Act of Fondul Proprietatea).

  • The Romanian State, represented by the Ministry of Public Finance, is still now a minority shareholder at Fondul Proprietatea. While at start, in 2005, the state started by owning 100% of Fondul Proprietatea, its stake greatly diminished over time. It is important to note that the government does not have control or influence in the decision-making processes of the fund manager.

  • If your broker cannot directly provide this information, you can access the website of the Bucharest Stock Exchange and type FP in the symbol lookup box on the top right hand of the page and hit enter. You will get transferred to a page with information about Fondul Proprietatea, including price evolution. On the same page you can find all shareholder reports and announcements issued by Fondul Proprietatea.

    Also, information regarding the share price and discount evolution can be found on the Fund’s webpage, here.

  • Trades (buy or sell) are conducted as for any other listed company at the Stock Exchange, through a buy or sell order issued to a broker. For this, any buyer or seller must have a signed contract with one of the brokers registered to trade on the Bucharest Stock Exchange.

  • The number of shares you own in Fondul Proprietatea is confirmed by the Central Depository, situated at 34-36 Carol I Avenue, Floors 3, 8 and 9, Bucharest 2. In order to obtain this information you will need to provide the documents listed on the Central Depository's website, here.

  • Fondul Proprietatea was listed on 25 January 2011 on the Bucharest Stock Exchange.

  • Fondul Proprietatea was listed on the Specialist Fund Market of the London Stock Exchange on 29 April 2015.

  • The BVB listing ensured the opportunity for the primary shareholders shareholders to benefit from the positive effects of a listing: greater transparency, liquidity and a more efficient price formation. Therefore, they have the opportunity to sell their shares for a better price than the one on the grey market.

  • The Bucharest Stock Exchange, proved not big enough for Fondul Proprietatea. In order to ensure a fair market price, an adequate liquidity is necessary. Listing Fondul Proprietatea on an international stock exchange is one way to ensure liquidity, as well as a better exposure of Fondul Proprietatea shares to foreign investors.

  • Starting 21 December 2010, the date when CNVM issued the Securities Registration Certificate, Fondul Proprietatea can no longer be traded through the Central Depository. Trading resumed once Fondul Proprietatea was listed on the Bucharest Stock Exchange and will only be done through the Bucharest and London Stock Exchanges. However, there are some extraordinary limited situations when the transfer can be operated directly by Central Depositary (as successions), but these transactions are not considered to be trades. For additional information please contact Central Depositary.

  • As Fondul Proprietatea is a listed company, it sends regular reports about its activity and latest developments to the Bucharest Stock Exchange and the Romanian Financial Supervisory Authority (FSA). All shareholders and investors have equal opportunities for gaining access to this publicly disclosed information, in Romanian and in English, which can be also accessed on this website here.

    At the same time all shareholders and investors can obtain information about Fondul Proprietatea by contacting the Franklin Templeton Investment Management Limited UK Bucharest Branch:

    Tel: +40 21 200 96 00

    Fax: +40 21 200 96 31/32

    E-mail: office@fondulproprietatea.ro  

    Website: www.fondulproprietatea.ro

  • Since August 2010 when Fondul Proprietatea was registered with CNVM, Fondul Proprietatea has calculated and published monthly Net Asset Value ("NAV") reports in accordance with Romanian legislation and regulations in force. NAV is computed monthly, for the last business day of the month, as well as for the dates when the Fund’s share capital changes are recorded with the Trade Registry.

    The value of Net Asset is certified by the Depositary Bank of Fondul Proprietatea, currently BRD Groupe Societe Generale. The deadline for NAV reports' submission to Financial Supervisory Authority and publication is 15 calendar days after the relevant reporting date.

    The first NAV published by Fondul Proprietatea was as at 31 May 2010. The NAVs from May to July 2010 were published on a voluntary disclosure basis. The August 2010 NAV was the first official report submitted to CNVM following Fondul Proprietatea's registration with CNVM as a closed-end fund.

    The monthly NAV reports published by Fondul Proprietatea, together with the NAV calculation methodology can be found on the Fund’s webpage, here.

  • It is important for shareholders to understand the difference between Net Asset Value (NAV) per share and the market price (as listed on the BVB). The NAV is calculated at each relevant date, according to the regulations applicable to Fondul Proprietatea in Romania and issued by the Financial Supervisory Authority (please see question on How is Fondul Proprietatea’s NAV currently calculated, here) .

    Similar to any other company listed on the Bucharest Stock Exchange, the market price for Fondul Proprietatea shares is the result of supply and demand, representing the price at which shareholders and investors are willing to sell and buy respectively. Franklin Templeton Investment Management Ltd. UK, Bucharest Branch and FTIS have no control over the market price movements from day to day, or the buyers and sellers of Fondul Proprietatea shares. Therefore, at times, Fondul Proprietatea will trade at a discount (below the NAV) and sometimes it may trade at a premium (above the NAV). There is no way to control or predict what the market price will be on any given day.

  • For listed entities, the share nominal value serves for accounting purposes, and does not influence the price at which the company’s shares are traded on the stock exchange. The price at which the company’s shares are traded is driven by the supply and demand for the shares, representing the price at which shareholders and investors are willing to sell and buy respectively, and there is no relation between a company’s nominal value per share and the market share price.

    To have a better picture, you can see in the chart below a comparison between the nominal value and the market share prices of the Fund and various other companies on the Bucharest Stock Exchange (OMV Petrom, BRD, Banca Transilvania, Electrica, etc).

    Nominal value vs Share-1.jpg

About Franklin Templeton

  • Franklin Templeton International Services S.À R.L. is the Sole Administrator and the Alternative Investment Fund Manager of Fondul Proprietatea and has the role provided by Romanian Companies' Law and by the Directive 2011/61/EU on Alternative Investment Fund Managers.

  • Describe the role of Franklin Templeton Investment Management Ltd. UK Bucharest Branch as Investment Manager of Fondul Proprietatea.                              

    Effective with 1 April 2016, Franklin Templeton Investment Management Ltd. United Kingdom Bucharest Branch wad approinted to act as its investment manager (“Investment Manager”) and thus delegated to the latter the portfolio management and the performance of administration services over Fondul Proprietatea. The said delegation excludes expressly the delegation of the risk management of Fondul Proprietatea, which shall remain the sole prerogative of the Fund Manager.

    The delegation of the portfolio management allows the Investment Manager, among others, to:

     (i)  manage the investment, realisation and reinvestment of the assets of Fondul Proprietatea ("Assets") with power on behalf of and in the name of Fondul Proprietatea, at the Investment Manager’s discretion, to purchase, subscribe to, otherwise acquire or deal in investments and securities and to sell, redeem, exchange, vary or transpose the same, provided that as manager of the Assets of Fondul Proprietatea, the Investment Manager shall observe and comply with the Constitutive Act, the Investment Policy Statement, all regulations, investments policy and objectives, and restrictions applying to the Assets as laid down in the Constitutive Act of Fondul Proprietatea, and in a general fashion, all laws and regulations to which Fondul Proprietatea is subject;

     (ii)  represent Fondul Proprietatea in the shareholders’ meetings organized by the portfolio companies of Fondul Proprietatea and exercising all rights of voting conferred by investments and securities of Fondul Proprietatea;

    (iii)  enter into such contracts in the name of Fondul Proprietatea as deemed necessary or advisable in order to carry out the investment policy and objectives

    (v)  give instructions to pay to and/or deposit with the depositary all monies, investments and securities received by it on behalf of Fondul Proprietatea.

    The delegation of the administration services allows the Investment Manager, among others, to:

    1. Manage the relationship with the Central Depositary with regard to its shareholders register functions – the only entity that has the right to keep the register of shareholders under Romanian legislation;
    2. Keep all the books, records, agreements, forms, papers, files and other corporate documents required by Romanian law;
    3. Determine and issue the net asset value of Fondul Proprietatea as well as the net asset value per share of Fondul Proprietatea;
    4. Receive any and all notices, correspondence, telegrams, telex messages, telephonic advice or other representations and communications received for account of Fondul Proprietatea;
    5. Provide and supervise facilities and services for the preparation and dispatch of statements, reports, notices, announcements, proxies, minutes and other documents to the shareholders/investors and the Board of Nominees;
    6. Co-operate at the drafting of the entire documentation for calling the General Meeting of Shareholders of Fondul Proprietatea;
    7. Draft the annual budget;
    8. Co-operate at the organization of the General Meeting of Shareholders of Fondul Proprietatea and the meeting of the Board of Nominees including by making the necessary legal arrangements in order to ensure appropriate conference rooms and other arrangements for such meetings;
    9. Provide for any legal filing and publications and file any tax returns;
    10. Maintain contacts with all supervisory, regulatory, tax or other state authorities or Fund-related professional organisations in Romania, complying with any information request from these authorities and advising Fondul Proprietatea thereof (including the current reports);
    11. Co-operate at the establishment of the annual reports, accounts, financial reports, financial statements and of any other documents which have to be sent to Investors or to the relevant authorities in accordance with applicable laws, regulations or the Constitutive Act;
    12. Deal with investor queries and sending correspondence and all other documents to the investors;
    13. Public Relations activities;
    14. Marketing activities (such as, but not limited to investor road-shows, group and one-on-one meetings with institutional investors, participation in various global and regional emerging and frontier market conferences, as well as organization of Analyst and Investor Days events).

    FTIS is a société à responsabilité limitée qualifying as an alternative investment fund manager under Article 5 of the Luxembourg Law of 12 July 2013 on alternative investment fund managers, authorized and registered with the Commission de Surveillance du Secture Financiere under no. A00000154/21.11.2013, whose registered office is located at 8A rue Albert Borschette, L-1246 Luxembourg and registered with the Luxembourg Register of Commerce and Companies under number B 36.979, and registered with the Romanian Financial Supervisory Authority (“FSA”) under number PJM07.1AFIASMDLUX0037/10 March 2016.

    The Investment Manager is registered with the FSA under no. PJM01SFIM/400005/14.09.2009, and is authorized and regulated in the UK by the Financial Conduct Authority, registered therein under the number 121779, registered as a foreign equivalent of an investment adviser with the US Securities Exchange Commission.

  • Neither Fondul Proprietatea, Franklin Templeton Investment Management Ltd. UK Bucharest Branch or Franklin Templeton International Services S.À R.L.  were involved in the design of the restitution process by which those who have been dispossessed received compensation in terms of Fondul Proprietatea shares or cash. In addition, Fondul Proprietatea, Franklin Templeton Investment Management Ltd. UK Bucharest Branch or Franklin Templeton International Services S.À R.L. have no influence over who gets compensated or not. Any questions regarding the restitution and compensation processes should be sent to the National Authority for Property Restitution to:

    National Authority for Property Restitution

    202 Calea Floreasca St., District 1, Bucharest

    Main Phone: + 4 021-200.09.60

    Other phone numbers:

    Law 10/2001 Department: +4 021-200.94.80

    Cash Payment Department: +4 021-200.94.77

  • Franklin Templeton funds / other entities of the group have not purchased any Fondul Proprietatea shares for its funds and are not planning to have such transactions in order to avoid any potential conflict of interest. 

General Information

  • Introduction

    The history of stock exchanges can be traced to 12th century France, when the first brokers are believed to have developed, trading in debt and government securities. Unofficial stock markets existed across Europe through the 1600s, where brokers would meet outside or in coffee houses to make trades. The Amsterdam Stock Exchange, created in 1602, became the first official stock exchange when it began trading shares of the Dutch East India Company. These were the first company shares ever issued.

    By the early 1700s there were fully operational stock exchanges in France and England, and America followed in the later part of the century. Stock exchanges became an important way for companies to raise capital for investment, while also offering investors the opportunity to share in company profits. The early days of the stock exchange experienced many scandals and stock crashes, as there was little to no regulation and almost anyone was allowed to participate in the exchange. Today, stock exchanges operate around the world, and they have become highly regulated institutions. Investors wanting to buy and sell stocks must do so through a stock broker, who pays to own a seat on the exchange. Companies with stocks traded on an exchange are said to be 'listed' and they must meet specific criteria, which varies across exchanges. Most stock exchanges began as floor exchanges, where traders made deals face-to-face. The largest stock exchange in the world, the New York Stock Exchange, continues to operate this way, but most of the world's exchanges have now become fully electronic.

    A company listed on a stock exchange has unlimited access to investors. This means unlimited financing opportunities, which can help owners raise capital for their corporation and expand into a more successful business. Depending on the product popularity or market conditions, the price of stocks fluctuates. Investors earn a profit through buying when stock prices are low and selling when shares have reached their highest prices. Even investors do not directly deal with the stock exchange, but hire a broker, a specialist who knows the ins and outs of the exchange, to buy and sell for them. Brokers make a commission off of every profitable sale.

    What Is a Stock Market?

    The stock market is a platform for trading shares in publicly listed companies (PLCs). It is a place to invest money with the chance that it will appreciate faster than it would by sitting in a bank account. Of course, there is also a risk that the companies invested in do not perform well, and the investment shrinks.

    What Is a Public Company?

    Public companies list or float on a stock exchange for two main reasons. Firstly, they open up their share capital to mainstream investors. That means, instead of the company being owned and funded by a handful of wealthy private individuals, it is split into much smaller shares, or holdings. Shareholders own part of the company and even have a say in how it is run.

    Another reason is to raise money. A publicly traded company may decide to issue, say, another million shares to the market. New investors bring new money to the table, and that funding can be put toward anything from expansion to paying off bank debt. It puts the business in a better position to grow.

    There are other benefits to having a public listing including raising the company’s reputation for a start.

  • Introduction

    Closed-end funds are often confused with, and mistakenly called Mutual Funds. A major difference is that closed-end funds behave more like a stock -- the market value is driven by supply and demand for the shares. On the other hand, an open-end mutual fund continually issues new shares to investors and does not trade on an exchange. Perhaps the best way to understand a closed-end fund is to compare it with an open-end mutual fund.

    Open-End Mutual Funds vs. Closed-End Funds

    You can think of a mutual fund as “open-ended” because the cash flow door -- both into (investments) and out of the fund (redemptions) -- is always open. In other words, the portfolio manager continues to invest new cash from investors, and the fund company continues to offer new shares of the fund to new investors.

    You can think of a closed-end fund, then, as “closed-ended” because the cash flow door -- into and out of the fund -- is always (with a few exceptions) closed. The manager only invests a fixed amount of cash that was raised (in an initial public offering) of the fund’s shares. If you want to buy shares of the fund, you buy the shares from another investor via a stock exchange. The number of fund shares do not fluctuate based on investor demand.

    Prices

    As mentioned above, a closed-end fund does not continually issue or redeem shares like a mutual fund. The value of one share of this pool is called the Fund’s net asset value (NAV), just like open-end funds. Closed-end funds trade on exchanges or the over-the-counter market. As a result, closed-end funds can have another price, known as the market price, besides their NAV. The market price is the price at which investors buy and sell shares of the closed-end fund.

    Trading

    Closed-end funds can trade at a premium, discount or, rarely, exactly equal to their NAV. The shares of these funds often trade at a discount to their NAV. The ability to buy at a discount is key benefit of the closed-end structure for investors. If held for a long period of time, the price may eventually return close to the fund’s NAV. The price increase, combined with any dividends or interest, can provide a higher-than-average rate of return.

    Similarities in Closed-End Funds and Mutual Funds

    Like mutual funds, closed-end funds are:

    • A diversified portfolio of stocks, bonds, or a combination of the two
    • Professionally managed by an investment manager
    • Either actively or passively managed
    • Required to distribute capital gains and dividends to shareholders
    • Regulated by the country’s local regulator

    Differences in Closed-End Funds and Mutual Funds

    Unlike mutual funds, closed-end funds:

    • Are traded on a stock exchange or over-the-counter
    • Are bought and sold at market price versus the underlying securities’ value
    • Are valued based on supply and demand for the fund
    • Can be purchased and sold throughout the trading day
  • Various research and studies show that over the medium and long-term, the equity market has provided superior risk adjusted returns. Equities can provide higher returns than a bank account.

  • Primary shareholders (beneficiary of the restitution process) and those acquiring the shares on the stock market are both eligible to hold shares in Fondul Proprietatea.

  • There are two situations:

    • if you received the shares from the Romanian State as a compensation, you need an account statement because this document also includes the confidential code, which is a necessary element for your broker to be able to trade. The list of confidential codes is released only together with the account statement. If you obtained an account statement when you received the shares, you will need a new one, which should also show your confidential code.
    • if you bought the shares directly from the stock exchange, you don’t need any document from the Central Depository as you have your brokerage agreement with your broker.
  • Not necessarily. Your broker can obtain, for a fee, the account statement, including the confidential codes, on your behalf. The broker will need however to have a contract signed for this purpose with the Central Depository.

  • The settlement process for a trade on the Bucharest Stock Exchange is T+2, meaning funds will be transferred to your brokerage account 2 working days after the day of the trade. For example, if you sold shares on a Monday, funds will arrive in your brokerage account by Thursday. It is also important to keep in mind that funds will first get transferred in your brokerage account, not your bank account. In order for the funds to get transferred to your bank account, you need to ask your broker to transfer the funds from your brokerage account.

  • Yes, you can empower a different person to contact a broker for your trades on the Bucharest Stock Exchange. This is done through a special power of attorney legalized by a notary. The rights and the obligations of the empowered person must be clearly stated within the special power of attorney.

  • Yes, it is possible to sell only some of the shares you own in Fondul Proprietatea.

  • Daily market buy-backs are suspended during the duration of the tender buyback offer and will be restarted after the completion of the offer.

    In case of takeover offer by a third party, any tender buy-back would require an approval from the local supervisory authority (FSA). Daily market buy-backs should still be possible unless Fondul Proprietatea is in possession of material non-public information.