On this 28th day of March, 2005, in Sofia City, a Memorandum of Understanding on Mutual Assistance and Exchange of Information was signed by and between the Financial Supervision Commission and the Hellenic Capital Market Commission. The Memorandum was signed by the Chairmen of both Institutions – Mr. Apostol Apostolov and Mr. Alexios Pilavios.

This is a further step forward towards extension of the co-operation between the two supervisory institutions, which is to contribute to the establishment and improvement of efficient mechanisms for exchange of information and relative experience in connection with the development of the capital market in both countries.

1. The Commission approved a tender offer submitted by Zavod za Metalorezheshti Mashini – Bulgaria Holding AD, Sofia City, for the purchase of shares of Mashstroy AD, Troyan, from the company’s other shareholders through the Investment Intermediary Aval In AD, Sofia. The price offered per share is BGN 4.

2. The Commission approved a tender offer submitted by Chimimport AD, Sofia City, for the purchase of shares of Prospecting and Extraction of Crude Oil and Gas
AD, Sofia, from the company’s other shareholders through the Investment Intermediary Real Finance AD, Varna. The price offered per share is BGN 26.50.

3. The Financial Supervision Commission issued a licence to Bulgaria Real Estates Fund SPV to perform activities as a special purpose vehicle, and namely: investment of pecuniary means raised through issuance of securities in real estates (securitization of real estates).
The Commission approved a prospectus for public offering of 150,000 ordinary voting shares, having a nominal value of BGN 1 each, issued by Bulgaria Real Estates Fund SPV as a result of initial increase of company’s registered capital.

4. The Financial Supervision Commission approved prospectuses for the public offering of share units of two mutual funds: Capital Invest Master Fond I traditionell and Capital Invest Master Fond II dynamisch. The funds’ managing company is Capital Invest, a subsidiary of Bank Austria Creditanstalt Gruppe GmbH. The prospectuses of both funds contain additional information intended for the Bulgarian investors, which reflects the specificity of share units offering in Bulgaria. The funds’ principal prospectuses have also been approved by the Austrian Financial Market Authority.
Investment intermediary in the sale (issue) and the funds’ units repurchase is to be HVB Bank Biochim AD.

5. The Commission passed an Amendment Ordinance to ORDINANCE No. 12 of December 10, 2003 on the terms of and the procedure for determing the minimum rate of return resulting from the management of supplementary mandatory pension fund assets, on covering the differnce up to the minimum rate of return, as well as on the establishment and utilization of the reserves for guaranteeing the minimum rate of return. The Ordinance’s promulgation in the State Gazette is forthcoming.

6. The Commission adopted Practice on the Implementation of Art. 180а of the Social Insurance Code. The Practice is to be published on the Commission’s website, Documents Section.

 1. The Commission imposed a temporary prohibition on a tender offer submitted by S&B Holding GmbH, Oberhausen, Germany, for the purchase of shares of Bentonit AD, Kardjali, from the company’s other shareholders through the Investment Intermediary Economic and Investment Bank PLC.

 2. The Commission approved a tender offer submitted by Bulgaria – Tex AD, Svilengrad, and Bulgaria 2000 AD, Kazanlak, for the purchase of shares of Bulgaria – К AD, Kazanlak, from the company’s other shareholders through the Investment Intermediary Bulbrokers AD, Sofia City. The price offered per share is BGN 24.

 3. The Commission imposed a final order of prohibition on a tender offer submitted by LUKOIL EUROPE HOLDINGS B.V., Holland, for the purchase of shares of LUKOIL NEFTOCHIM BURGAS AD, Burgas, from the company’s other shareholders through the Investment Intermediary Raiffeisenbank (Bulgaria) EAD, Sofia City.

 4. The Commission approved a tender offer submitted by ET Zaara – Yancho Ivanov, Stara Zagora, for the purchase of shares of Parvomai BT AD, Parvomai, from the company’s other shareholders through the Investment Intermediary Aval In AD, Sofia City. The price offered per share is BGN 4.49.

 5. The Commission entered Interlogic-Leasing SA, Sofia City, as a public company. The securities issue to the amount of BGN 725,710, allocated in 72,571 pieces of ordinary, registered shares, having a nominal value of BGN 10 each was also entered. The said issue constitutes the company’s court registered share capital.
 
6. The Commission adopted a Regulation on the own funds and solvency margins requirements of the insurers and health insurance companies. Its promulgation in the State Gazette is forthcoming.

Under the Regulation adopted, provisions settling for the first time the procedures for performing supervision over the solvency of insurers on consolidated basis were included. Thus, the requirements of Directive 98/78/EC on the supplementary supervision of insurance undertakings in an insurance group are completely introduced.
On the other hand, by adopting the new Regulation on the own funds and solvency margins requirements of the insurers and health insurance companies, the requirements of Directives 12 and 13 of 2002 of the EC regarding the determination of the solvency margin of the insurance undertakings are fully applied.
 At the same time, several texts were also specified, which texts could be ambiguously interpreted, and some omissions and incompleteness of the Regulation hitherto effective as established in the process of its implementation were removed.

1. The Commission imposed a temporary prohibition on a tender offer submitted by Zavod za Metalorezheshti Mashini – Bulgaria Holding AD, Sofia City, for the purchase of shares of Mashstroy AD, Troyan, from the company’s other shareholders through the Investment Intermediary Aval In AD, Sofia.

2. The Commission imposed a temporary prohibition on a tender offer submitted by Terra Tour Service EOOD, Sofia City, for the purchase of shares of Eztour JSC, Sofia City, from the company’s other shareholders through the Investment Intermediary Karoll AD Financial House, Sofia City.

3. The Commission entered into its Public Register an issue of securities issued by Colos-1 JSC Special Purpose Vehicle (SPV). The issue has the following parameters: 103 pieces of ordinary voting shares, having a nominal value of BGN 1,000 each. The initial public offering of this issue’s shares has been successfully concluded and trading of the issue at the Stock Exchange is forthcoming.

4. The Commission approved a request submitted by the Investment Intermediary CEE Securities JSC, Sofia City, on the issuance of approval for effecting transactions under Art. 54, Para. 1, Item 3 of the POSA. The extended licence allows CEE Securities JSC to manage individual securities portfolios and/or customers’ monies, except for portfolios of investment companies and pension funds.

5. The Commission withdrew the licence for conducting activities as an investment intermediary issued to X-Pit & Co. OOD at the request of the intermediary.

6. The Commission adopted Practice on the Implementation of Art.26, Para.2 of the Special Purpose Vehicles Act.
The above Practice relates to the type and form of the declarations that the persons managing and representing a special purpose vehicle are to submit to the Financial Supervision Commission.

The document is to be published on the Commission’s website, Documents Section, Instructions & Requirements.

7. The Commission recognized Kalin Krasimirov Metodiev’s qualifications acquired abroad, requisite to conduct activities as an investment consultant in Bulgaria.

During the fourth quarter of year 2004, a total number of 26,833 insured persons, and throughout the whole year a total number of  97,075  insured persons, availed themselves of their right to change their participation in the supplementary pension insurance funds and to transfer funds from their individual accounts.
During the fourth quarter of year 2004, the funds transferred from one to another respective fund amounted to BGN 9,500 thousand, and for the year these amounted to BGN 39,437 thousand.
Please kindly find the results from the change in participation and the transfer of funds from one pension fund to another for the fourth quarter of year 2004 and for the whole year 2004 under the Statistics Rubric, Insurance Market Statistics for 2004 Section.

1. The Financial Supervision Commission entered into the Public Companies and Other Issuers of Securities Register an issue of securities with the following parameters: 559,730 pieces of ordinary, registered, dematerialized shares, having a nominal and issue value of BGN 1 each, issued by Investor BG AD, Sofia.

 2. The Financial Supervision Commission entered into the Public Companies and Other Issuers of Securities Register an issue of securities with the following parameters: 10,000,000 pieces of ordinary, registered, dematerialized, voting shares, having a nominal and issue value of BGN 1 each, issued by DZI Bank AD, Sofia.

 3. The Financial Supervision Commission adopted at first reading a Draft Ordinance on the terms of and procedure for entering into and deletion from the Register kept by the FSC of public companies and other issuers of securities and issues of securities.
 The Draft shall be forwarded to the interested persons and organizations in order to be coordinated and shall be published on the Commission’s website.

The Investment Supervision Division at the Financial Supervision Commission issued a permit to KD PELIKAN AD Investment Company to invest up to ten per cent of its assets in shares of INDUSTRIAL HOLDING BULGARIA AD, DOVERIE UNITED HOLDING AD and ALBENA AD, while observing the restriction stating that the total value of the investments up to 10 per cent shall not exceed 20 per cent of the investment company’s assets.

1. The Commission approved a prospectus for secondary public offering of a corporate bonds issue to the amount of EUR 1,000,000 (say: one million euro), allocated in one thousand (1,000) pieces of the following type: ordinary, registered, dematerialized, interest – bearing, fully transferable, secured corporate bonds, having a nominal and issue value of EUR 1,000 (say: one thousand euro) each, and original maturity of thirty-six (36) months, having floating interest rate to the amount of the six-month EURIBOR plus 5.5 % on an annual basis, and interest payments every six (6) months, issued by HypoCredit AD, Sofia.
The Commission entered HypoCredit AD as an issuer and the issue specified above into the Public Companies and Other Issuers of Securities Register.
2. The Commission issued a temporary prohibition on the publication of a tender offer submitted by Chimimport AD, Sofia, for the purchase of shares of Prospecting and Extraction of Crude Oil and Gas AD, Sofia, from the company’s other shareholders through the Investment Intermediary Real Finance AD, Varna.
3. The Commission approved amendments to the Articles of Association of BenchMark Fund Estates REIT. 
4. The Commission issued a licence to Elana High Yield Fund AD to perform the following activities as an open-end investment company: investment in securities of funds raised through public offering of shares where observing the risk allocation principle.
5. The Commission adopted at first reading a Draft Ordinance on Introducing Amendments to Ordinance No. 12 on the method and procedure for establishing the minimum yield when managing the assets of supplementary compulsory pension insurance funds in order to cover the difference up to the minimum yield and on formation and utilization of the reserves allocated to guarantee the minimum yield.
The draft shall be forwarded in order to be coordinated with the interested persons and organizations and shall be published on the Commission’s website.

The Financial Supervision Commission adopted the following resolutions at a meeting held on February 15, 2005:
1. The Commission imposed a temporary prohibition on a tender offer submitted by ET Zaara – Yancho Ivanov, Stara Zagora, for the purchase of shares of Parvomai BT AD, Parvomai, from the company’s other shareholders through the Investment Intermediary Aval In AD, Sofia.
2. The Commission imposed a temporary prohibition on a tender offer submitted by Bulgaria – Tex AD, Svilrengrad, and Bulgaria 2000 AD, Kazanlak, for the purchase of shares of Bulgaria – K AD, Kazanlak, from the company’s other shareholders through the Investment Intermediary Bulbrokers AD, Sofia.
3. The Commission imposed a temporary prohibition on a tender offer submitted by Lukoil Europe Holdings B.V., Holland, for the purchase of shares of Lukoil Neftochim Burgas AD, Burgas, from the company’s other shareholders through the Investment Intermediary Raiffeisenbank (Bulgaria) EAD, Sofia.
4. The Commission approved a prospectus for public offering of 7,150,000 pieces of shares, having a nominal value of BGN 1 each, issued by BenchMark Fund Estates REIT as a result of increase in the company’s share capital to the amount of BGN 7,800,000. The capital increase shall be performed through issuance of 650,000 rights, each one entitling the shareholders to the right to subscribe for 11 shares of the capital increase.
5. The Commission adopted a Procedure for holding examinations to gain the right to perform activities as a broker or an investment consultant in year 2005. The Procedure for holding the examinations, as well as the topical synopsis for the examinations, shall be published on the Commission’s website.
The Commission fixed dates for holding the examinations as follows:
May 28, 2005 – Examination to gain the right to perform activities as a broker
May 29, 2005 – Examination to gain the right to perform activities as an investment consultant
6. The Commission adopted Regulations on Introducing Amendments to the Rules Governing the Organization and the Activities of the Guarantee Fund.
By adopting the Law on Introducing Amendments to the Insurance Act in October last year, the status of the Guarantee Fund /GF/ was also amended. The adoption of Rules Governing the Organization and the Activities of the Guarantee Fund, as well as the current supervision on conformity with the law, which is exercised by the Commission over the fund, fall within the scope of the Financial Supervision Commission’s prerogatives. The said fund is managed by a managing board comprising a chairperson and four members, elected by the Management Board of the Association of Bulgarian Insurers /ABI/ among representatives of the insurers who conduct activities on the conclusion of the compulsory Civil Liability insurances with the owners, users, holders and drivers of vehicles, as well as Accident insurance. The new points introduced under the Rules are as follows:
– The GF’s funds, decreased by the reserve for forthcoming payments, may not be less than BGN 3 mln.; when the Fund’s funds drop below this minimum amount for more than a month, the deficit shall be made up for with funds of the insurers who conclude compulsory insurances;
– The timeframe for delivering a judgment on a claim may not be longer than 30 days, where in the case of expiration of the said timeframe, default interest shall be due to the damaged person from the date, on which the timeframe for delivering the judgment on the claim expired.
The new Draft Rules were submitted by the ABI, amended by the experts with the FSC, adopted on today’s session of the Commission, and is to be promulgated in the State Gazette.

The Commission issued  to Mrs. Antoaneta Gancheva a license for actuary of pension funds