site.btaLegal Changes Enable Government Securities Issue for Individual Investors

Bulgaria's Parliament on Wednesday passed conclusively revisions to the Public Debt Act moved by Progressive Bulgaria.

Part of the provisions that were adopted empower the Minister of Finance to issue government securities intended for acquisition by natural-person investors. Such investors will be exempt from fees and commission charges for the initial acquisition of such securities.

The amending law obliges the Finance Ministry to set up and maintain an electronic information system for the sale of government securities to natural persons. The Ministry will have to draft an ordinance establishing the terms and procedure for use of this information system.
 
The amount of government securities that are issued for natural persons must not exceed the maximum amount of the public debt for the relevant year as set by the State Budget Act.

Based on a Council of Ministers decision, the Minister of Finance may appoint a representative of the State at meetings and drafting of written resolutions upon decision-making by government securities holders, the lawmakers resolved. The government will adopt a decision appointing a calculation agent to calculate the requirement for the aggregate nominal value of government securities in circulation when their initially agreed terms are modified.

Government securities distributors will be obliged to provide services for trading in such securities to natural persons on a primary and secondary market and to maintain firm quotes on a trading venue, at least one of which is a regulated market. The Minister of Finance is to conclude contracts on market terms with government securities distributors who meet definite requirements and to terminate such contracts early if the distributors cease to meet the conditions.

The sponsors of the bill from Progressive Bulgaria argued that the new framework would enhance people's financial culture and would encourage them to develop an investor's mindset.

Further provisions liberalize the registration and settlement process for trading in government securities issued on the Bulgarian market. These revisions will make it possible to attract European and global institutions to the Bulgarian government securities trading system in the context of Bulgaria's eurozone entry.