(1) The privatisation funds shall be joint stock companies which have been granted a license by the Securities and Stock Exchanges Commission, hereinafter referred to as the "Commission", in accordance with the terms and the conditions of this Act whose objects comprise:

(2) The privatisation funds may not perform other commercial transactions unless these are directly connected with their activities under para 1.

(3) The trade name of the privatisation fund shall include the extension "privatisation fund".

(1) The privatisation funds shall issue only registered voting shares giving the right to one vote.

(2) The founders shall not be entitled to reserve privileges for themselves.

(3) The privatisation funds may not issue preference shares.

(1) The privatisation funds shall not buy back their shares during the first five years after their foundation unless they have registered as investment companies under the Securities, Stock Exchanges and Investment Companies Act.

(2) The shares of the privatisation funds may not be transferred earlier than six months after the date of the last auction session of the corresponding round of the mass privatisation.

(3) The shares of privatisation funds may not serve as security.

(1) In order to establish a privatisation fund the applicant must have a minimum capital of 70 million leva.

(2) At least 10 million leva of the applicant's capital should be in cash or government securities with maturity of not more than one year. The rest of the capital should be in investment vouchers and should not be less than 70 per cent of the capital.

(3) The government interest bearing securities with maturity of not more than one year are included in the capital at nominal value.

(4) As of the moment of filing the application for the issuing of a confirmation of the prospectus by the Commission as per Article 10, para 4, the founders must have paid in at least 10 mn leva in cash or in government securities, and as of the moment of filing the application for the issuing of a license for carrying on activities as a privatisation fund the whole subscribed capital must be paid in cash, government securities and investment vouchers.

(5) The investment vouchers shall be deposited under the conditions defined by the Council of Ministers. Articles 72 and 73 of the Commerce Act shall not apply for depositing privatisation vouchers. One investment lev is equal to one lev. Until the establishment of the privatisation fund the deposited vouchers shall not be at the founders disposal.

(6) In case the capital is increased with investment vouchers the shareholders shall not use the rights under Article 194 of the Commerce Act.

(7) In the case the privatisation fund has not raised the capital necessary for the foundation of a privatisation fund within a period specified by the Council of Ministers or in case it is refused a license or registration in the Commercial Register, the persons who have deposited the investment vouchers in the fund have the right to withdraw them immediately and deal with them under the terms, procedures and time limits defined by the Council of Ministers. The expenses for the incorporation and increase of the capital shall be borne by the founders.

(8) The capital may be increased with investment vouchers between the tender sessions, as well. The transfer of investment vouchers from individuals to privatisation funds during these periods shall be carried out in accordance with procedures defined by the Council of Ministers.

(1) Legal persons in which the state's share is above 50% of capital cannot be founders or shareholders in a privatisation fund. This limitation does not apply to banks and insurance companies.

(2) A bank cannot be a founder or shareholder in a privatisation fund of which it is a depository bank.

(1) No one shall own directly or through related persons more than 10 per cent of the shares of one privatisation fund.

(2) A person who has acquired directly or through related persons more than 5 per cent of the shares of a privatisation fund or in other ways is enabled to exercise decisive influence over it, shall immediately notify the Commission.

(3) The Commission shall specify a period within which the violation of the requirement under para 1 must be remedied.

(1) The founders of the privatisation fund shall prepare and publish a prospectus signed by the them for raising the fund's capital, and shall publish an announcement in at least one central daily newspaper.

(2) The founders may not oblige those who wish to participate in the fund with investment vouchers to make also monetary contributions.

(1) The prospectus shall contain data about the name, seat and address of the privatisation fund, the time period for raising the capital, the terms, conditions and procedures for depositing the investment vouchers, the main objectives of the investment activities, the risks associated with the activities of the privatisation fund, the names of the persons holding more than 5% of the capital, the name, seat and address of the investment intermediary under Article 19, para 1, and of the depository bank, as well as other data specified by the Commission. The prospectus must not contain false data.

(2) The prospectus shall be signed by the founders who declare that the prospectus complies with the requirements of the law.

(3) The founders are liable jointly and severally for damages caused by false data stated in the prospectus.

(4) The prospectus shall be confirmed by the Commission under the procedures defined in the Securities, Stock Exchanges and Investment Funds Act. The Commission shall publish at least monthly a list of the privatisation funds in the process of establishment which have received an approval of the prospectus.

(1) After holding the constituency meeting of the privatisation fund the investment vouchers, money or government interest bearing securities with maturity up to one year inclusive shall be considered paid in the fund whose shares the applicant has subscribed unless the applicant is present in person or is represented by a proxy at a meeting and explicitly expresses disagreement with a decision of the General Meeting under Article 170, para 1, item 1, 2 and 3 of the Commerce Act.

(2) The management body of the fund shall within 3 days notify the Centre for Mass Privatisation of the holding of the constituency meeting and the applicants who have filed orders for subscription of shares against investment vouchers and have explicitly expressed disagreement with a decision of the constituency meeting under Article 170, para 1 item 1,2 and 3 of the Commerce Act.

(3) Article 163, para 2, and Article 170, para 3, of the Commerce Act and Article 96 of the Securities, Stock Exchanges and the Investment Companies Act shall not apply to the foundation of the privatisation fund.

(4) The constituency meeting of the privatisation fund shall be convened and shall adopt decisions in accordance with Article 168 of the Commerce Act. In case that the required capital is not represented at the announced time, the meeting shall take place two hours after the announced time and may pass resolutions if at least five persons who have subscribed shares are present.

(1) In addition to the information required by the Commerce Act the Articles of Association of the privatisation fund shall contain:

(2) Amendments to the Articles of Association and the other founding documents shall be allowed upon approval by the Commission.

(1) For issuing a license for carrying out activities as a privatisation fund, an application in writing shall be filed with the Commission with the following attachments:

(2) The deadline for filing the documents for receiving a license to carry out activities as a privatisation fund shall be specified by the Council of Ministers.

(1) The Commission shall rule on the application within 1 month upon receiving the documents under Article 12.

(2) The Commission shall notify the applicant in writing within 7 days of making the relevant decision.

(3) The granted licenses shall be entered in a special register.

(4) The licenses shall be issued unlimited time period and may not be transferred to another person.

(5) The Commission shall publish on a monthly basis a list of the privatisation funds, the investment intermediaries under Article 19, para 1, and the depository banks in at least one central daily newspaper. At the end of the registration period the Commission shall publish the full list of the privatisation funds which have received a license and have been registered under this Act.

(1) The Commission shall refuse to grant a license, in case:

(2) The reasons for refusal shall be stated in writing. In case the Commission does not rule within the period specified under Article 13, para 1, it shall be deemed that there is a refusal.

(3) In the cases under para 1, items 2, 3, 4 and 5, the Commission may refuse to grant a license only in the event that the applicant has not corrected the discrepancies within the period the Commission has specified, which shall not be shorter than 1 month.

(1) The members of the privatisation fund's management board and supervisory board, or the members of the board of directors of the privatisation fund respectively, may be natural or legal persons. The natural person members must:

(2) The natural persons who represent the legal entities which are members of the management board and supervisory board, or members of the board of directors of the privatisation fund respectively, must meet the requirements of para 1, items 2-5.

(3) A member of the management board and supervisory board, or of the board of directors of the privatisation fund respectively, may not be a partner or a shareholder, a member of a management or controlling body of the investment intermediary under Article 19, para 1, or of the depository bank, as well as of the persons related with them.

(4) Employees of the Council of Ministers, of the central departments of Ministries and Committees of the Council of Ministers, as well as other central institutions financed by the budget, specified in a list approved by the Council of Ministers, may not be members of the privatisation fund's management board and supervisory board, or the board of directors respectively.

(1) The activities of the privatisation fund may be managed by an investment intermediary as well, in accordance with a contract signed with it.

(2) The contract under para 1 shall be approved by the supervisory board, or the general meeting of the fund respectively.

(3) During the closed-ended period under Article 4 the contract under para 1 may at any time be terminated with a one-month notice in writing from the management board with the approval of the supervisory board, or the board of directors respectively, with the approval of the general meeting.

(4) Any condition of the contract under para 1 restricting the rights of the privatisation fund under para 3 shall be invalid.

(5) The contract under para 1 shall contain:

(1) The monetary resources of the privatisation fund, as well as all securities acquired by the fund, shall be kept with a depository bank pursuant to a contract signed with it until a central depository is established. The depository shall make the on-account payment at the expense of the privatisation fund.

(2) The depository bank shall account for the monetary resources and securities of the fund separately from its own assets.

(3) The depository bank and the investment intermediary shall not be one and the same person or related parties.

(4) The depository bank shall not be a creditor or guarantor of the privatisation fund, except for receipts as included in para 1.

(1) For every new issue of shares the privatisation fund shall publish a prospectus containing information about the fund and about the shares offered, which is necessary to the investors for correct assessment of the economic and financial position of the fund and the rights entailed by the shares issued, and an announcement shall be published in at least one central daily newspaper. The prospectus may not contain false data.

(2) The prospectus shall be signed by the management board, or the board of directors of the fund respectively, or by the investment intermediary under Article 19, para 1, who shall declare that the prospectus complies with legal requirements.

(3) The prospectus and the announcement may only be published if the Commission has approved the prospectus in writing.

(4) The sale or the public offer of shares which are not accompanied by a prospectus shall be prohibited.

(5) The privatisation fund and the investment intermediary under Article 19, para 1 shall be liable jointly and severally for damages caused by false data in the prospectus.

(6) In the cases of violation of para 4, as well as in the event that essential information in the prospectus turns out to be false, or essential information has been withheld, the shareholder may demand compensation for the damages suffered.

(1) The prospectus shall contain:

(2) The prospectus shall be kept updated regarding any change of the information it contains.

(1) The Commission shall rule on the application to issue an approval of the prospectus within 2 weeks after the filing of the complete set of documents.

(2) The Commission shall refuse to issue an approval by a decision in writing stating reasons only if the prospectus does not comply with the legal requirements and the shareholders' interests are not ensured.

(3) If the Commission does not rule within the time period under para 1, it shall be considered that there is a refusal.

(4) The Commission shall not be held responsible for the authenticity of the information stated in the prospectus.

(5) The Commission shall notify the applicant in writing about its decision to approve or to refuse an approval of the prospectus within 7 days after adopting its decision.

(6) The Commission shall keep a register of the approvals issued and refusals to issue an approval.

(1) The privatisation fund, the investment intermediary under Article 19, para 1 respectively, shall publish an announcement on the public offering and its starting and closing dates, the starting and closing date of the subscription, the starting and closing date of the sale, registration number of the confirmation issued, time, place and the manner of getting acquainted with the prospectus.

(2) The announcement under para 1 shall be published in at least one central daily newspaper, at least 7 days before the starting date of the subscription or the start of the sale.

(3) The date of publishing the announcement under para 2 is deemed to be the start of the public offering.

(4) The date specified in the announcement under para 1, on which shares can be subscribed or bought at the earliest, is deemed to be the start of the sale.

(1) The advertising materials and the publications in connection with the public offer of shares of the privatisation fund shall not contain false or misleading information.

(2) The advertising materials and publications under para 1 shall indicate:

(1) Privatisation funds may invest the raised investment vouchers and other resources in shares of companies proposed for privatisation under the terms and procedures of Chapter Eight of the Transformation and Privatisation of State-Owned and Municipal Enterprises Act.

(2) Privatisation funds may invest the remaining part of their resources in:

(3) The investments under para 2, item 1 shall not exceed 10 per cent of the fund's capital.

(4) The investments under para 2, item 2 shall not exceed 25 per cent of the privatisation fund's capital.

(5) The privatisation fund shall not invest more than 10 per cent of its capital in securities issued by one issuer. This restriction does not apply to shares acquired under Chapter VIII of the Transformation and Privatisation of State-Owned and Municipal Enterprises Act.

(1) The privatisation fund may not acquire more than 34 per cent of the voting shares of one company.

(2) The privatisation fund may not invest in securities of a company issued by the member of the management and controlling bodies of the fund, the depository bank, or related persons.

(3) The privatisation fund may not invest in securities issued by another privatisation fund without obtaining a permission from the Commission.

(1) The privatisation fund may not take loans.

(2) The Commission may give a permission to a privatisation fund to borrow funds up to 10 per cent of its net capital, provided the loan:

(3) The Commission shall approve or refuse the loan within 7 days of filing the application.

(4) The total of the borrowed funds under para 2, items 1 and 2 shall not exceed 15 per cent of the capital of the fund.

(1) The transformation and termination of the privatisation funds shall be done only with the permission of the Commission.

(2) The persons nominated as liquidators or trustees of a privatisation fund shall be approved by the Commission.

(1) Privatisation fund shall submit to the Commission an annual report within 90 days of the end of the financial year as well as a six-month report within 60 days of the expiration of financial half-year.

(2) The reports under para 1 shall contain information on the activities of the fund, on the members of its management and supervisory boards, or of the board of directors, on the investment intermediary under Article 19, para 1 respectively, the owners of more than 5 per cent of the shares, the signed and audited financial statements under Article 40, para 1 of the Accountancy Act and shall contain information on:

(1) In case of a violation under Article 33, the members of the management board and supervisory board, the board of directors respectively, shall pay jointly and severally to the state budget double the amount of the irregularly paid out resources.

(2) The persons, who have found out the violation shall immediately notify the Commission, which shall proceed under the terms and procedures of Chapter Six.

(1) If someone violates or allows violation of Article 9, Article 10, Article 16, Article 22, and Article 23, para 2, he shall be imposed a fine amounting at 500,000 up to 5,000,000 Leva in the event that the violation does not constitute a crime.

(2) If someone violates or allows a violation of Article 2. para 2, Article 3, Article 4, Article 18, Article 20, Article 21, Article 25 para 1, Article 26, Article 27, Article 29, Article 30, Article 31, Article 32, Article 33, Article 34, Article 35, Article 36, Article 37, Article 38, Article 39 he shall be imposed a fine amounting at 200,000 up to 1, 000, 000 Leva, in the event the violation does not constitute a crime.

(3) If someone fails to fulfil another obligation resulting from this Act he shall be imposed a fine amounting at 10,000 up to 100,000 Leva, in case he is not subject to another heavier sanction.

(4) The income obtained as a result of illegal activity shall be forfeited to the State.

(1) The statements of the discovered violations under Article 41 shall be drawn up by an official authorised by the Chairman of the Commission, and the penalty enactment shall be issued by the Chairman himself.

(2) The drawing up of the statements, the issuance, the appeal and the execution of the penalty enactment shall be done under the terms and procedures of the Administrative Violations and Sanctions Act.

§ 1. For issues not regulated by this Act the Securities, Stock Exchanges, and Investment Companies Act shall apply.

§ 2. For the purposes of this Act:

§ 3. Companies which do not comply with the requirements of this act may not include in their name the words "privatisation fund" or carry out activities as privatisation funds.

§ 4. Within six months after the conclusion of the last centralised auction privatisation funds may bring their organisation and activities as investment companies pursuant to the Securities, Stock Exchanges and Investment Companies Act, or as holding companies pursuant to the Commerce act, in case they have exercised their right in connection with the investment vouchers.

§ 5. The Council of Ministers shall pass implementing regulations for Chapters 2, 3 and 4.