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MUNICIPAL BONDS MSE 8th Annual Conference Ohrid, March 29-31, 2007

MUNICIPAL BONDS MSE 8th Annual Conference Ohrid, March 29-31, 2007. Barbora Lazarova Bratislava Stock Exchange. Step by step. Legal Framework Role of the Issuer Role of the Stock Exchange Member Role of the Regulator - SEC Role of the CSD Role of the Stock Exchange Role of Rating

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MUNICIPAL BONDS MSE 8th Annual Conference Ohrid, March 29-31, 2007

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  1. MUNICIPAL BONDSMSE 8th Annual ConferenceOhrid, March 29-31, 2007 Barbora Lazarova Bratislava Stock Exchange

  2. Step by step • Legal Framework • Role of the Issuer • Role of the Stock Exchange Member • Role of the Regulator - SEC • Role of the CSD • Role of the Stock Exchange • Role of Rating • Legal Time Periods and Fees • Conclusions

  3. 1. Legal Framework • Law on Securities Either a separate Act on Bonds or a new Chapter on Bonds in the Law on Securities • Law on Local Self- Government More explicit formulation of Municipal Council competency to approve the issuing of municipal bonds • Act on Accounting International Public Sector Accounting Standards (IPSAS)

  4. 2. Role of the Issuer • Creation of an Internal Team • Selection of External Consultants (SE member, legal and financial advisors, auditors, PR specialists) • Due Dilligence & Internal Evaluation • Decision of the Municipal Council • Preparation of the Terms of Issue and/or Prospectus MSE Guidebook for Municipalities

  5. 3. Role of the SE Member • Publication of the Terms of Issue and/or Prospectus • Public Offer & Subscription • Underwriting (issuer<=>investors) • Registration of bonds in CSD • Admission to the Stock Exchange Repeal the provision of the Law on Securities on „Mandatory Buyout of Unsold Securities“ Successful Underwriting – even when the Entire Volume has not been Subscribed

  6. 4. Role of the SEC • Prospectus Very little in the Law on Securities To adopt European Directive 2003/71/EC on Prospectus • Legal Time Period for the SEC Approval of the Prospectus 60 days => 10 days • Amount of Fees Fees derive from the volume of the issue => lump fee is needed

  7. 5. Role of the CSD • Registration of all SE traded Securities in Book-entry form • ISIN Numbering Agency • Pro-customer oriented Services • Quality & Promptness of Services • Amount of Fees Transparency of the Fee Structure (Access Fee, Entry Fee, Execution Fee, Keeping Records Fee)

  8. 6. Role of the Stock Exchange • Listing Requirements Number of Bond Holders 50 => 10 Liquidity <=> Underwriting • Listing Rules – Chapter 2.04, point 2 Municipal Bonds should be listed on the MSE Official Market Assistance of the Listing Sponsor: => more safety for investors =>more promotion for the issuer

  9. 7. Role of Rating • Rating of Municipalities is not a Mandatory Listing Requirement After Approximation with the EU Legislation (no Mandatory Prospectus) is highly recommended to add as a Listing Requirement Rating brings lasting Transparency and Trust for Investors

  10. 8. Time Periods and Fees • Competitivness to Bank Credits in Time and Costs Minimize Time Periods of SEC for Approval of Prospectus, CSD for Registration and Stock Exchange for Admission of the Issue Decrease the amount of related fees, with special focus on SE Member Fees for Subscription, Underwriting and Placement

  11. 9. Conclusions • Attractivity of Municipal Bonds • Transparency of Municipalities • Amendments of Laws + IPSAS • Adjustments of Listing Rules • Guidebook for Municipalities • Legal Time Periods and Fees • Willingness and Support of State and all Market Participants

  12. CONTACTS Barbora Lazarova Deputy Director General Bratislava Stock Exchange Tel: +4212 4923 6161 E-mail: lazarova@bsse.sk www.bsse.sk

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