Is the Romanian stock marked ready for CFD?

Romanian National Securities Commissions said it would lay the groundwork for a exchange-traded platform for contracts for difference. While Sibex has already submitted the project for approval, the director of the Bucharest stock Exchange Anca Dumitru said it would monitor the evolution of these equity derivatives. But is the Romanian stock market ready for CFD trading?

Sibex wants CFD trading on individual equities

National Securities Commission preps the modification of an instruction introduced in 2006, by adding new stipulations that would pave the way for a new trading platform using contracts for difference (CFD), the institution announced.

“We move forward with the introduction of new stipulations referring to the possibility of adjusting the parameters required by these equity derivatives”, reads the RNSC notification.

In early 2009, Sibiu stock exchange sent for approval the project involving the trading of CFD on Sibex market.

Sibex plans to introduce contracts for difference on individual shares. “We are waiting for the approval of RNSC where we submitted the required documents for launching these products”, Teodor Ancuta (photo), president of Sibex told Wall-Street.

He added that the market will be the one to decide what instruments will be on top of traders’ preferences, and expects a growing investor demand in the future.

“We need to offer fresh trading alternatives in a bid to enhance the popularity of the capital market and the first condition is to try. For example, Americans are launching 10,000 new products on an annual basis, of which 10-20 prove to be successful. Why wouldn’t we try more new products?” Ancuta stated.

BSE considers the creation of a specialist market for CFD

Contracts for difference are financial vehicles traditionally traded over-the-counter and rarely found in the regulated market’s offer.

“The Bucharest Stock Exchange will monitor the evolution of Romanian traders’ interest in more complex financial instruments (CFD for example) and does not exclude the possibility of creating a specialist market segment dedicated for trading these equity derivatives. This decision will come as a response to the investor and broker demand”, Anca Dumitru, director of Bucharest Stock Exchange told Wall-Street.

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