Banks, insurance brokers and stock brokerages (SSIFs) may directly distribute private compulsory pension products (pillar II) if a series of legislation modifications, currently being prepared, is rapidly adopted.
The new stipulations could considerably speed up the distribution and sale of compulsory private pensions, processes due to start this August, says Mircea Oancea, chairman with the Private Pension System Supervision Commission (CSSPP).
"Banks, insurance brokers and SSIFs could this way directly sell compulsory pension products, without having the obligation to create a new company, namely a pension broker," Mircea Oancea told ZF.
Banks' entrance in the system of compulsory private pensions would significantly speed up the distribution of these products, the more so as the sale period for pillar II is limited to four months, August-November.
Banks currently have the most extensive network of branches among all financial institutions of Romania. At present, around 4,500 banking branches operate on the domestic market, of which over 1,000 were opened last year alone.
Moreover, banks are taking one step further, having already announced another 1,000 branches will be added to their overall network throughout 2007.
At this moment, around 420 insurance brokers operate on the market, most handling car insurance policies, but which may become interested, at least in part, in compulsory pensions, as well.
At present, the three entities (banks, insurance brokers and stock brokers) are banned from selling compulsory pensions, being forced to set up a new company, a pension broker, to this end.
However, the setting up of new companies entails further costs, plus bureaucratic procedures and also more time, a reason why CSSPP, in partnership with the other regulatory authorities and market representatives, decided to modify the marketing regulation on pillar II, with the modifications being now under discussion.
Still, the new regulation is not enough for the three entities to sell compulsory pensions directly, explains Oancea.
"The CSSPP, licensing insurance brokers, the National Bank, licensing banks, and CNVM, licensing financial investment services firms, have to modify the legislation specific to each domain to allow the three entities to include compulsory pension intermediation among their activities," he stated.
For now, stock brokerages' interest in this business is quite low, but very high in the case of banks and insurance brokers.
"At least for the start of the compulsory pension system, we will adopt these new regulations, which are more flexible, to help the market get started and develop," states Oancea.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
