PARLIAMENT ADOPTS AMENDMENTS TO PUBLIC OFFERING OF SECURITIES ACT
The Bulgarian Parliament adopted a draft on the amendments and supplements to the Public Offering of Securities Act at first reading on March 30. The draft stipulates the establishment of mutual funds which assets have a net value no lower than BGN500,000. The amendments also require higher levels of capital of the investment intermediaries depending on the licence they are given. To obtain a full licence, agents need capital amounting to BGN1.5MN and to have a partial one the barrier is BGN250,000. These levels will become valid in 2006. The aim of the draft is to harmonize the Bulgarian legislation in this field with the rules of the European Union (EU). That's why investment intermediaries will also be issued the so-called single passport from 2007. The document will allow them to operate in the EU without applying for an additional licence. Managing companies will need this passport, too. However, their lowest capital will have to be raised from BGN100,000 to BGN250,000.One significant amendment to the law stipulates the establishment of a fund that will guarantee investments amounting to up to BGN12,000. However, the amount will gradually be raised to BGN40,000. It means that if an intermediary is declared insolvent, the investments made by his customers will be compensated to this amount by the fund resources. The fund account will be filled by entrance and annual fees that investment intermediaries are obliged to pay. The fund will be run by a five-member managing board which will be elected by the Financial Supervision Commission. Besides, the Bulgarian Stock Exchange-Sofia and the Central Depository will be written off the list of companies banned for privatisation. It means that the state-owned stakes in them (44% of the capital of the stock exchange and 42% of the capital of the depository) will be offered for sale. The Bulgarian Stock Exchange-Sofia will also be allowed to pay dividends after its privatisation.