SOFIA (Bulgaria), May 31 (SeeNews) – The Bulgarian Stock Exchange (BSE) will focus its efforts on setting up a mechanism for admitting government securities to trading and setting up a new segment, BSE International, the CEO of BSE, Ivan Takev, told SeeNews on Wednesday.
“It is important for us to resolve the structural problems related to admitting government securities to trading and setting the BSE International segment, and be ready to admit Expat’s four new exchange-traded funds (ETFs),” Takev told SeeNews in an interview on the sidelines of a financial conference in Sofia.
In March, Bulgarian company Expat Asset Management said it was seeking regulatory approval to launch four ETFs, each of which will track the performance of one of the blue-chip indices of the Greek, Romanian, Czech and Polish stock exchanges. The four funds would be listed on the BSE and on other foreign exchanges, the company said at the time.
“It is hard to say when the BSE International segment will be set up, as there are still two regulatory approvals needed,” Takev said. “We will try to file the necessary documents with the Financial Supervision Commission (FSC) in relation to the transactions settlement mechanism by the end of the week.”
Stocks from Western European countries and other major markets, including Canada, China and Japan, could be traded on the planned new international segment of the BSE, Takev said.
The BSE has already received regulatory approval from the Bulgarian financial regulator for amendments to the trading rules of the exchange in relation to setting up the new segment.
Should the transactions settlement mechanism get approved, the BSE will also have to request approval for setting up a multilateral trading facility (MTF). MTFs are self-regulated financial trading venues, which serve as an alternative to traditional regulated markets on stock exchanges.
The BSE will need to set up an MTF because most foreign companies do not have prospectuses under the Prospectus Directive of 2003 as they had been admitted to trading before the introduction of the directive, Takev explained. Without such a prospectus, the companies cannot be listed on the regulated market of the BSE, he added.
With regard to admitting government securities to trading, the BSE is currently waiting for approval from the FSC.
“At the moment, our rules have been submitted to the FSC and are awaiting approval,” Takev said. “After receiving approval we will at least have the legal possibility to organize such a market.”
From then on, the initiative will no longer be with the BSE, according to Takev. The Bulgarian National Bank will need to update its IT systems in order to accommodate the requirement for the new market, he said.
With regard to future initial public offerings (IPOs) on the BSE, Takev said that the two potential ones, announced earlier this year, have been put on hold temporarily rather than cancelled. The reasons for the delay were mostly political rather than financial, he added without elaborating.
In January, Takev told SeeNews that two companies plan to launch IPOs on the BSE this year, adding that one of them is from a sector which has strong representation on the Bulgarian market but is different from the IT business. He declined to disclose more details about the two companies.