Shares are a type of basic financial instrument – securities, issued by joint-stock companies certifying the participation of their holder in the capital of the company. Shares carry the right to dividend, to vote at the general shareholders’ meeting, and to liquidation share.
Investment Intermediary Municipal Bank PLC offers:
- Sale-purchase of shares traded on a regulated market (Bulgarian Stock Exchange AD);
- Sale-purchase of shares traded outside a regulated market;
- Sale-purchase of rights to shares;
- Sale-purchase of stock/shares in collective investment schemes.
Specific documents:
- Financial Instrument Deal Order;
- Evidence/Declaration on Financial Status of Customer;
- Intermediation Contract (Brokerage Contract) for deals in financial instruments.
General documents:
- General Terms and Conditions to Contracts with Customers of Investment Intermediary Municipal Bank PLC for Investment Services and Financial Instrument Activities;
- Other documents (presented on site at the Bank).
Fees and Commissions apply in accordance with the Bank’s Tariff in force.
Concluding contracts, giving orders, or making requests, as well as any other legal activities in the name and for the account of the customer via a proxy are permissible only if a notarized power of attorney is presented containing the representative power for managing or disposing of financial instruments, together with a declaration by the authorizer, that the latter does not make deals with financial instruments by occupation.
Investment Intermediary Municipal Bank PLC provides description of the financial instruments offered and traded by the Bank and the associated risks pursuant to the requirements of Ordinance 38 on the activity of investment intermediaries, and for its potential customers to be able to make an informed investment decision.
Investing in financial instruments may bring additional risks to the investor, from unforeseen changes to the economic and market environments, and from the investor assuming financial and other additional liabilities as a result of deals in financial instruments, including incidental liabilities in addition to the costs for acquiring the concrete financial instruments. Investing in financial instruments also bears the risk of loss of the entire investment.
Risk in trading in shares
Investing in shares bears mainly market risk, liquidity risk, currency risk, issuer risk and settlement risk.
Market risk in investing in shares is characterized by the probability of a drop in the price of securities as a result of market factors (systemic risk).
Liquidity risk boils down to the investor not being able to sell the quantity of securities he wants. Liquidity risk for shares traded in the country is related to the free float specified for each traded issue.
Currency risk in shares traded in the country is related to and depends on the movements of exchange rates. A lower risk is characteristic for investments with EUR as underlying currency (due to the currency board in Bulgaria) and zero currency risk is characteristic for investments in BGN (since the shares traded in the country are issued in BGN only).
Issuer risk when investing in shares is possible upon the issuer experiencing financial difficulties (non-systemic/specific risk).
Settlement risk may occur upon default or delay in the process between the moment of striking the deal and the moment it is finalized, and the occurrence of unfavourable market consequences during this time. The risk is higher in OTC (over-the-counter) deals and such deals applying a method differing from DVP (Payment at the moment of delivery).