The MoF has published an official announcement elaborating on the start of two projects for the development of the Bulgarian financial market, summarized as follows:
1. An 18-month project to diagnose the state of development of the Bulgarian capital market whose principle objectives are the assessment of the current state of the capital market in Bulgaria, the identification of barriers and impediments for further development, benchmarking the local capital market with selected EU markets, and the provision of recommendations to address the identified barriers. The assessment and recommendations will be discussed with key stakeholders and, upon the project’s completion, will serve as a basis for the development of a Capital Market Development Strategy.
2. A 12-month project for the adoption of a legal and regulatory framework for the enforceability of hedging instruments (eg. close-uut netting for derivatives and repos). The project will analyse the existing legal and commercial conditions for the validity and enforceability of hedging instruments, provide recommendations on changes required for the establishment of a legal and regulatory framework for close-out netting, and, amongst other aims, hold discussions with key stakeholders on the risks and benefits of the proposed legal framework.
Impact on investors: No direct impacts on clients. Two projects initiated by the Bulgarian Ministry of Finance are expected to bring further harmonization between Bulgarian and selected EU financial markets.