Central Depository Legislation To Be Changed

A draft version of FSC Ordinance 8 on the Central Depository was published on the regulator's website and sent to the Association of Banks in Bulgaria for review and comments by its members. The most important changes are as detailed below.

• Alignment of the legislation with the intended changes in CDAD Rules and Regulations.

• Introduction of a new type of account in the Register of financial instruments - omnibus account for double-listed securities held by foreign banks, investment intermediaries and other depository/custodian institutions. Monthly disclosure of the investors on behalf of which securities are held in such accounts is to be provided by the account holders to CDAD. Upon request, end investor information is to be provided to FSC.

• New types of CDAD shareholders to be allowed in order to facilitate the bundled privatisation of CDAD and BSE Sofia - regulated markets/market operators, foreign depository and clearing institutions. Each of these may hold more than 5% of the shares of CDAD.

• Settlement finality becoming regulated in accordance with the Payment Services and Payment Systems Act.

• More detailed reporting of transactions resulting from repurchase agreements.

• CDAD to notify FSC about net short positions in line with the EU Short Selling Regulation.

• Control over CDAD activities to be exercised by FSC only instead of the current joint oversight by FSC, Ministry of Finance and Bulgarian National Bank.

Impact on investors: The proposed amendments to the CDAD legislation are bring it in line with the forthcoming changes in the depository's Rules and Regulations as well as with some other recent legislative changes on national and EU level. They are also aimed at facilitating the ongoing efforts for joint privatisation of BSE and CDAD.