Implementation of the Market Standards for Corporate Actions and General Meetings in the activities of the Central Depository AD Vasil Golemanski 25 September 2015 – Sofia

Contents  Necessity of introduction of Market Standards for CA and GM  Essence of the Standards  CDAD initiatives to support the application of the Standards  Main Corporate Actions

Necessity of introduction of Market Standards for CA and GM  Factors Diversity of rules and requirements for provision of information concerning the implementation of CA (GM). Different deadlines for implementation of CA (GM). Manual intervention / lack of FTP process Excessive complexity of the processes Many and diverse sources for generation of information Interaction with many parties, fragmented processing chain, lack of integration.

Necessity of introduction of Market Standards for CA and GM (2)  Implications Increased operational risk. Reduced operational efficiency. Increased costs. Operating losses.  Solutions Standardization of operational rules for processing. Harmonization of market practices (based on existing or new better practices). Coordination between relevant parties and consistent actions

Necessity of introduction of Market Standards for CA and GM (3)  Benefits Risk mitigation due to reduced market fragmentation; increased safety. Processing efficiency, electronic communication, cost reduction. Legal certainty, attraction of (foreign) investors. Improving the liquidity of the European capital markets.

Essence of the Standards  Standards mainly concern: The information flow Means of transmission of information Key dates and their sequence.  Rights to participate in CA are determined on the basis of the entries in the register of the Central Depository of the issuer (after finalization of settlement) on the Record Date.  Provision of harmonized operational information processing for CA and GM.

CDAD initiatives to support the application of the Standards Purposes of the CDAD`s electronic forms Embolden companies to provide information to the Central Depository as regards CA / GM. The purpose is the final owner-shareholders to obtain information on time, in its required completeness. Facilitate the process of communication and preparation of subsequent customized messages from CDAD to its members. Consolidation of the communication “Issuer – CDAD – Issuer” Without effect on the due fees

CDAD initiatives to support the application of the Standards (2)  Usage of the electronic forms will support the process of fully automated processing of incoming data (in CDAD) and will abolish the need of provision of documents in paper form  Submission of information (without undue delay) to CDAD`s members – which will enable members to obtain the necessary CA information and take relevant action for communication with clients  Timely provision of complete information to end client/investor

Main Corporate Actions  Registration of issues of dematerialized financial instruments  Registration and maintenance of corporate activities  Dividends distributions and payments on bond issues  Issuance of reports drawn from the Register.

Corporate actions messages  Messages to members of CDAD as regards corporate activities 1. Messages related to GM conduction - message to all members for General Meeting conduction - MT564 - message to all members maintaining clients accounts of shareholders with voting rights - MT Corporate Actions Messages - message for all corporate actions - capital increase/decrease, splits, conversions and etc. /to all members of CDAD/ - MT564 - message to the members of CDAD, maintaining clients` accounts of shareholders after determining the Record Date - MT566 - message from Investment Intermediaries indicating participation of a client in a corporate event – in cases of rights trading, FI converting - MT565 - message for registration of corporate action in the system of CD - MT566

Corporate actions messages (2) 3. Messages for payments through the system of CDAD - messages in cases of taken decision for payment of dividends, interests and/or principal on bonds issues -МТ564; - message to the members of CDAD maintaining clients` accounts of shareholders after determining the RD upon payment of a dividend after determining RD - MT566; - message for executed payment of dividend / interest and / or principal– МТ566; - message from members of CDAD to CDAD for paid / unpaid dividends to shareholders - MT565; 4. Submission of messages related to GM Submission of messages related to GM or corporate action shall be performed only in cases where the issuer has notified CDAD for this event - in writing or electronically through the information system of the Central Depository.

Messages related to GM  GM notification submitted by the issuer issuer Shareholder/ Bondholder to all CDAD`s members CDAD issuer shareholder / bondholder to CDAD members with available balances on clients accounts on RD CDAD MT 564 MT 564  Message after the determination of shareholders / bondholders with voting rights

Corporate Actions Messages  Notification from the issuer for upcoming corporate event issuer shareholder All CDAD`s members CDAD issuer to CDAD members with available balances on clients accounts on RD CDAD MT 564 MT 566 if confirmation is needed MT 565  CA message after RD determination

Corporate Actions Messages  Message confirming the CA registration in CDAD CDAD shareholderInvestment Intermediary MT 566

Messages for payments through the system of CDAD  Notification by the issuer for the dividend payment issuer shareholder to all CDAD membersCDAD issuer shareholder to CDAD members with available balances on clients accounts on RD CDAD MT 564  Message after determining the RD MT 565

 Message confirming the execution of the payment CDAD shareholderInvestment Intermediary Messages for payments through the system of CDAD Message from the Investment Intermediary for paid/unpaid dividend МТ 566 МТ 565

Delayed Settlement Transactions Management of transactions with delayed settlement in Corporate Actions processing. Amendments in the CDAD Rules of Procedures. -Market claims -Buyer protection -Transformation/ transaction management

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