.jpg)
The first Bulgarian company – Intercapital Property Development - has been dual-listed on the NewConnect market, part of the Warsaw Stock Exchange. Using the operational link with the Bulgarian market established by KDPW – the Polish CSD – in February 2010, the shares of Bulgarian companies listed in Warsaw can be cleared and settled in Poland, together with the processing of corporate actions related to those securities.
On 15 February 2010, an agreement was signed between KDPW and UniCredit Bulbank (a custodian bank), opening the operational link with Bulgaria.
KDPW’s work on building new cross-border operational links and improving returns on existing links is part of the company’s Corporate Strategy for 2010-2013. The goals and strategic projects include co-operation with the Warsaw Stock Exchange and Polish market participants to enable foreign securities to be listed in Warsaw. The co-operation with Bulgaria is also part of the strategy to strengthen the position of KDPW in the region.
KDPW is actively involved in attracting foreign issuers to the Polish market, in particular issuers from the largest markets in the CEE region. This is another element in the realisation of KDPW’s business strategy that underlines our continuing efforts to strengthen our position in Poland and throughout Central and Eastern Europe – says Iwona Sroka, the KDPW President and CEO.
The link with Bulgaria via UniCredit Bulbank will not only enable the clearing and settlement of transactions involving shares of Bulgarian companies listed on the Warsaw Stock Exchange, but will also ensure the processing of corporate actions by KDPW in accordance with procedures based on Bulgarian market regulations.
This link will enable the performance of the following processes in respect of the securities registered on the KDPW account in UniCredit Bulbank:- The processing of all corporate actions, including:
- increases of share capital, stock splits, share exchanges, assimilations, conversions, redemptions, and other reorganisations;
- dividends, rights or other distributions which may be declared payable or distributable as of the relevant record date and payment date;
- Proxy voting service for general meetings.
- Automatic conversion of cash distributions (e.g. dividend payments) to Polish-based holders of Bulgarian securities from BGN to EUR. Cross-border payment can be transferred intra-day to Polish bank accounts.
- Tax withheld on dividends by issuer at source (the Bulgarian issuer acts as withholding agent). Tax reclaims are possible: KDPW will assist in providing application forms and tax documentation to its participants to process tax reclaims for their clients.
The operational link with the Bulgarian market is a free-of-payment (FOP) type. The transfer of securities to and from the Polish market takes place across the accounts of KDPW participants and the KDPW account in UniCredit Bulbank without change of beneficial ownership. Primary settlement will take place across the accounts of CD AD (the Bulgarian CSD). It is worth underlining that KDPW participation fees for foreign issuers (including, of course, Bulgarian issuers) are currently free of charge.
KDPW at present maintains 14 operational links with foreign central securities depositories. 6 are direct links, the remainder are indirect via the two international central securities depositories (ICSDs) Clearstream Banking Luxembourg or Euroclear Bank, or as in the case of Bulgaria, via a custodian bank.
