The equity market in Bulgaria was established in 1991 with the introduction of the Commercial Act. The emergency of the equity market is directly linked with the deep structural, economic and social changes in the country since 1989. In the period 1992-1994 some twenty regional exchanges sprung up across the country. The market was functioning in a completely unregulated environment until the adoption of the Securities, Stock Exchanges and Investment Companies Act in July 1995. In compliance with the newly adopted Act a Securities and Stock Exchanges Commission (SSEC) was established. By the end of 1995 most regional exchanges merged and Bulgarian Stock Exchange remained the only operational exchange in the country. The other key institution on the market - Central Depository AD (CDAD) was established as a joint-stock company in 1996.
The dynamic development of the capital market in the period of 1996 – 1999 proved the necessity of more elaborated legal regulation. In December 1999 the Bulgarian Parliament adopted the new Public Offering of Securities Act /POSA/, which came into effect in February, 2000. The act is aimed at providing protection of investors and creating prerequisites for development of a transparent and efficient capital market in the country. The new act guarantees the investors improved protection, creates conditions for the stability of the stock market, as sures equal access and treatment for all participants, as well as transparency and settlement of the deal.
The last few years can be characterized as a period of stabilization of the infrastructure of the capital market. Currently, the structure and the institutions of the Bulgarian capital market are fully in compliance with the global standards and requirements in this area. In compliance with the new legal requirements and as a response to the changed market conditions BSE-Sofia has adopted its new Rules & Regulations.
The Bulgarian Stock Exchange Trading System (BSE Workstation) is a fully automated system designed to provide market transparency, liquidity, price discovery, and allow for future market growth. The first version of the system was developed by The NASDAQ Stock Market, launched in 1991, and has been modified continuously since then by RTS-TC (Russian Trading System), keeping current with the latest technologies. In October 2000 the RTS Plaza trading system, based on the NASDAQ quotation system was launched at the BSE-Sofia with the assistance of American and Russian experts. It is an order and/or dealer driven trading system with multiple market-makers.

The Financial Supervision Commission is the State regulator of the stock market. Its foremost mission is to regulate and exercise control so as to ensure the protection of investors and to enhance the development of a transparent and efficient securities market.
The Commission is an independent state body with the Parliament.
As a state authority, similar to securities commissions in western countries, it regulates and controls:

• the public offering of and trading in securities
• regulated securities markets
• investment intermediaries
• the Central depository
• investment companies
• management companies

Official Market
Market of Shares Segment "A"
Market of Shares Segment "B"
Market of Shares Segment "C"
Market of Debt Securities Segment "Government Securities"
Market of Debt Securities Segment "Municipal Bonds"
Market of Debt Securities Segment "Corporate Bonds"
Primary Market
Privatization Market
Unofficial market

Trading on the BSE takes place Monday through Friday, within the following trading hours:
09:30 - 13:00 - Trades on the Official Market and on the Free Market
13:00 - 14:00 - Block trades
09:30 - 14:00 - Transactions in Government Securities

The BSE operates a continuous order driven trading system. Best bid/ask quotes and executed transactions are also displayed on a large monitor within the trading room. Orders are matched automatically according to time and price priority. The minimum lot size is currently one share. The daily limit on price movements for the Official Market segments A,B and C has been set at +/- 15 % from the average weighted price from the previous trading session, while for the Free Market the limit on price movements has been set at +/- 30 % from the average weighted price registered at the previous trading session

Transaction fees are paid to the Exchange by both sides in the transaction and are defined as a percentage from the total amount of the transaction as follows:
- For transactions in shares and depository receipts on shares:
- on amount up to BGN 25 million inclusive - 0.1%;
- on amount above BGN 25 million up to BGN 75 million inclusive - BGN 25 thousand plus 0.05% on the excess over BGN 25 million;
- on amount above BGN 75 million - BGN 50 thousand plus 0.01% on the excess over 75 million.
- For transactions in government securities - 0.005%
- For transactions in corporate and municipal bonds and depository receipts on bonds - 0.01%
- For transactions in compensation instruments - 0.03%
- For transactions in other securities - 0.03%
- For transactions on the Privatization Market - 0.2%
- For transactions on the IPO Market - equal to the fee payable for trading in the respective type of securities
- For block transactions - 0.1%.

- The fee for transactions executed through tender offer and bid is 0.02% of the total amount of the transaction and shall be due only by a member who is the buyer.
- The highest fee due upon a REPO transaction shall not exceed BGN 10 thousand.
- The fees above do not include VAT, excluding the fees for transactions in shares and depository receipts on shares.

The settlement cycle is T+2. Securities are settled on the gross basis (not netted for each Exchange member but settled trade-by-trade), while the cash is settled on a net basis.
Although settlement is not simultaneous, for the participants of the settlement process trades are settled on the delivery versus payment (DVP) basis. Securities settlement is done via the computerized book-entry system at the Central Depository. All securities traded on the BSE shall be issued in dematerialized form and be registered with the Central Depository.
BSE - Sofia has created and managed a Guarantee Fund in order to guarantee payments for transactions executed on the exchange. The fund is created by means of installments by the members. Each member shall deposit an initial installment amounting to BGN 200, and every month he has to deposit in the fund sum equal to 0.1% of the average value of the transactions executed by him during the previous calendar month. When the amount of the fund is equal or more than 1% of the turnover value realized by the exchange for the previous year, the members stop paying their current installments.
The main principle of the Fund management is to avoid the risk. The Guarantee fund resources can be invested only in bank deposits and Government Securities.

01 January - New Year's Day
02 January Trading Exception (as of Decision of the Government dated 1st Dec 2005)*
03 March - Liberation Day
24 April Easter Monday
01 May Labour Day
06 May St. George's Day
24 May Cyrillic Alphabet and Slavic Culture Day
06 September Union Day
22 September Independence Day
24 December Christmas Eve
25 December Christmas Day
26 December Second Christmas Day
31 December New Year's Eve

* As a compensation of the trading exception on 2nd January (Monday), the Saturday on 28th January will be working, respectively trading day.
All ad-hoc non-working, respectively non-trading days, are decided by the Government and afterwards announced.

Under a Decision taken by the Bulgarian Government on March 06, 2003, the following dates are officially announced as non-working, respectively non-trading days:


As a compensation of these trading exceptions the following Saturdays will be working, respectively trading days:

On October 21, 2000 the BSE-Sofia launched its official index – SOFIX. SOFIX is price index, market capitalization weighted, with base value of 100 points.
SOFIX is calculated as a correlation of the sum of the market capitalization of the companies within the index portfolio on the current day, and the sum of the market capitalization of the companies within the index portfolio on the previous day.
Market capitalization is defined as a product of the number of shares in issue and the average weighted price per share at the end of the trading session
Only the most liquid companies traded on the regulated markets shall be included in the index portfolio. In addition the companies shall respond to the following requirements:
- The issues shall be traded on the regulated markets at least three months
- Market capitalization of each issue shall be at least BGN 2 mln.
- The number of shareholders of each company included in the index portfolio shall be at least 500
- The shares of the issue shall be traded at least at 20% of all trading sessions during the last 3 months
The number of the companies within the index portfolio could vary from 5 to 50.
Companies included in the index portfolio:
- Slanchev bryag AD (SLB)
- Albena (ALB)
- Blagoevgrad BT (BLABT)
- Bulgartabak Holding (BTH)
- Zlatni pyasatzi (ZLP)
- DZI AD (DZI)
- Petrol (PET)
- Sofarma (SFARM)
- Biovet (BIOV)
- Neohim (NEOH)
- Orgachim AD (ORGH)
- CB Central Cooperative Bank AD (CCB)

1. The daily index is calculated as the base index is multiplied by the correlation of the sum of the market capitalization of the companies within the index portfolio of the current day, and the sum of the market capitalization of the companies within the index portfolio on the base day.
2. Market capitalization of each issue included in the index portfolio is defined as a product of the number of shares of a given issue and the last average weighted price per share.
3. The average weighted price is calculated after the end of the trading session as a correlation between the turnover and the number of traded shares for each issue included in the index portfolio. Share prices formed as a result of block deals and deals concluded on the "Privatization market" shall not be included.
4. Index Formula:

where:
SOFIX is an index on the regulated markets of BSE-Sofia
N i,t - is the number of shares in the respective issue on the T day
P i,t - is the weighted-average price of the I-th issue on the T day
P i,t-1 - is the weighted-average price of the I-th issue on the T-1 day
n - is the number of issues included in the index portfolio
I - is the index for a specific issue
T - is the date, for which the index is calculated
D I,t - is the divisor of the I-th issue as of the current trading session
K is an adjusting coefficient (K=1, unless the index base has been changed)

If a corporate event requires a change in the divisor, the value of the divisor for the next trading session should be calculated in the following way:



Where:
Di, t+1 - is the divisor of the I-th issue for the next trading session;
- is the adjusted weighted-average price for the I-th issue after the end of the session on the T day as a result of the corporate event on the T+1 day

- is the adjusted number of shares of the I-th issue after the end of the session on the T day as a result of the corporate event on the T+1 day.

A change in the base of SOFIX (the issues included in its calculation) could be made on the grounds of a decision of the Board of Directors of the BSE-Sofia and will be announced in the Official Bulletin of the BSE-Sofia at least two weeks before enforcement. In this case, the adjusting coefficient for the next day (the T+1 day) will be calculated in the following way:



Where:
SOFIXold base is the value of the index after the end of the session;
SOFIXnew base is the value of the index after the end of the session but calculated using the new base.

Name: BG40
Base Date: 01 February 2005
Base Value: 100

Description
- The issues shall be traded on the regulated markets at least three months
BG40 is based on the issues of shares of the Top 40 companies graded by the number of transactions executed in the last six months.

The issues included in the calculation of the index should meet the following criteria:
- To be fully subscribed to and secondary tradable; and
- To have been registered for trading on the Official or Unofficial Market for at least 3 months before included in the index. In case of transferring of an issue for trading from Unofficial to Official Market, then the date of registration of the issue for trading on the Unofficial Market will be considered as the initial date.