Shares of foreign companies to be traded on Bulgarian market
The first such financial instruments will be admitted in three to six months
19 May, 2017
Shares of foreign companies will be traded on the Bulgarian Stock Exchange (BSE) thanks to a project that has been in the works since last summer, announced Vasil Golemanski, chief executive officer of BSE. Called BSE International, the project envisions the establishment of a special platform in the Bulgarian market dedicated to the trading of shares of companies listed in European markets. This includes both European and American shares.
The Financial Supervision Commission has already approved the platform itself and its trading rules. The next step is the issuance of a licence for the settlement of deals on the BSE International market by Clearstream Banking Luxembourg following instructions from Central Depository AD. A procedure aimed at obtaining an identifier code for the new market has been launched (Market Identifier Code under the ISO 10383 standard).
“At this stage, we are discussing the technical specifications of BSE International with our partner Deutsche Boerse AG. Until the market is finally set up in accordance with all technical and administrative requirements, we will consult our members and institutional investors on which companies should be listed for trade so that we make sure that we meet their expectations and investment needs,” said Vasil Golemanski.
Last but not least, certified translations of the prospectus overviews and the so-called European passport from regulators will be required for all target companies whose prospectuses are in compliance with the European legislation for listings on a regulated market. It is a rather long administrative process and Golemanski believes that the first foreign financial instruments will be admitted to BSE-Sofia in at least three to six months. Between 20 and 40 companies are expected to participate in the beginning.
The selection process for companies is already underway. It involves clarification of the prospectuses as, for example, the German market has a long history dating back to times when prospectuses were not even a requirement. So the selection process is intended to single out good companies that conform with conditions set by the Bulgarian market and that have prospectuses.
The second step will be to admit companies with no prospectus to the so-called multilateral trading facility. It will be realised through technical access, which all intermediaries on the current platform have now.
Initially, the securities admitted will be restricted to shares but if the investment community shows enough interest, bonds and investment funds are also in the plans for the second stage.
The market is open to all investors, irrespective of whether they are individuals or institutions.