The law governing offers of shares and other securities to the public is to be brought into line with EU law, under proposed changes published by the Council of Ministers on 29 August 2012.

The draft increases protection for investors and minority shareholders, and simplifies various administrative formalities related to tender offerings. It also aims to improve the integrity, efficiency and orderly functioning of financial markets by implementing EU Regulations on short selling and certain aspects of credit default swaps.

Publicity and notification regime

The draft proposes to remove the requirement to publish a prospectus for offers of securities addressed to:

  • fewer than 150 (natural or legal) persons across Bulgaria and the rest of the EU, other than qualified investors, or
  • investors who acquire securities for a total consideration of at least €100,000 per investor, etc.

It would also remove the obligation to announce tender offers in the State Gazette.

It proposes a common format for summaries in prospectuses in order to facilitate comparison for similar securities.

The draft would require the final terms of any offer to be made available to investors by no later than the beginning of the public offering or the admission to trading.

Bonds

The draft would also extend regulation to bonds admitted to trading without a public offering.

It also proposes that bondholders’ trustees are elected by bondholders in general meeting, to stop unilateral appointments from being made.

The draft clarifies that voting rights would only be exercisable by those who are registered as bondholders with the Central Depositary at least five days before the date of the general meeting.

Listed companies

The draft would require all listings to be registered by the company within 7 days of it having taken place.

It would also permit the delisting, by unanimous decision of shareholders, of any public company other than one listed as a result of a spin-off.

Tender offering

To protect minority shareholders, the draft would require a mandatory takeover offer whenever a person (directly or indirectly) acquires more than one third of the voting rights in a company, as long as no person already (directly or indirectly) controls more than 50% of the voting rights of that company.

The draft would also make the members of a listed company’s governing body responsible for controlling its subsidiaries’ actions in relation to certain specific transactions.

Law: Directive 2010/73/EU amending Directive 2003/71/EC and Directive 2004/109/EC; EU Regulation No 236/2012 on short selling and certain aspects of credit default swaps