There have been a number of significant developments in the Bulgarian market over the last 12 months. Probably the most important of these has been the ongoing implementation of amended rules and IT system for the Central Depository (CDAD), which will impact the post-trading environment.

Some of the amendments have already been implemented, such as the second daily settlement batch and the settlement guarantee fund. The rest are expected to become effective in the coming months: the division of CSD functions into register and clearing and settlement system; introduction of Swift communication; buyer protection and market claims regulation; distribution of corporate actions information; and a centralised securities pool to facilitate securities lending.

Important amendments have been made to the local Ucits legislation, including the AIFM directive’s transposition and the introduction of new types of collective investment vehicles such as umbrella sub-fund structures and ETFs. New tax benefits were made effective for non-resident legal entities meeting certain eligibility criteria as of the beginning of 2014.

“The joint privatisation of the Bulgarian Stock Exchange AD-Sofia and CDAD is expected to serve as catalyst for attracting new investors in the market and contribute to the further market modernisation,” says Borislav Hitov, head of global securities services Bulgaria at UniCredit.