Банкеръ Weekly

Briefs

ALL COMPENSATION INSTRUMENTS - IN THE CENTRAL DEPOSITORY

Kaloyan Ninov, MP from the National Movement Simeon II and member of its economic team responsible for the capital market, to the BANKER weekly

Mr. Ninov, during the pre-election campaign you launched the idea of organizing one or two big mass privatisation tenders in order to use all alternative instruments of payment. Has the scheme been clarified yet and when will the tenders be held?
- We are presently working out an overall strategy for the development of the capital market, which includes opportunities for the use of compensatory receipts, compensation bonds, and investment bonds. One of the options is that the Centre for Mass Privatisation (CMP) continues its operation until the bond resource is spent. However, I favour the idea to set a deadline for the use of those instruments of payment, and meanwhile make an estimation what State assets should be offered at the tenders. Those who succeed to use their bonds correctly will profit, those who fail to do so - will lose.

Which date would you recommend as a deadline?
- This should be decided at an expert level. Moreover, it is connected with information that we do not currently have. We'll have to make an inventory to evaluate the State's assets. In addition, some of the companies will be transformed into public companies and that will also take time.

The prices of compensatory receipts and compensation bonds differ considerably at present. Are the terms for payment by both kinds of instruments going to be made equal?
- This is a more complicated matter. The way in which the face value of the two kinds of compensation instruments was formed must be analyzed. If experts assess it as reasonable, they could be unified in a single instrument of payment - a compensation receipt, bond or whatever it is. In my opinion, if that option is accepted, a unified register for them should be established at the Central Depository. This is necessary because the various institutions, handling the two kinds of securities, make their utilization and transferrence quite difficult and that creates prerequisites for forgery and corruption.

Last May new members were appointed to the State Securities Commission and its mandate is for five years. Does the National Movement Simeon II intend to work with the commission's present members or will you try to replace them?
- I don't know the commission's representatives but I think they are too many for the functions they perform. Generally, the commission's information register does not fulfill the tasks it has been set up for. It is quite inefficient, according to me. Regarding the members: seven are too many for such a commission and I believe five will fully suit.

A month ago Nikolay Vassilev announced that a fundamental change
of the Bulgarian capital market is imminent. When will the first revolutionary steps be made and what will they be?
- The development of a strategy will be the first step. The aim is to have an efficiently operating capital market, in contrast to the previous practice. Everything done so far was as an end in itself. The first things to be corrected are some vague provisions in the currently effective administrative procedures. Some new stipulations should be added as well, mostly aimed to protect the interests of minority shareholders. Legislation should be amended in order to improve corporative management. Changes are also necessary in the taxation of proceeds from trade in securities, as well as a reform in some of the institutions, servicing the capital market. Naturally, we propose to list attractive companies' shares for trade on the stock market and to settle the question of primary public offering of new issues. Later on, a segment for trade in hi-tech companies' securities will be set up on the stock exchange.

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