Shares

Description

Shares are securities issued by joint-stock companies which certify the holder participation in the capital of the joint-stock company. The shares entitle its holder to dividend, voting right at the general meeting of shareholders and a right to liquidation share.

First Investment Bank offers:

  • purchase and sale of shares traded on a regulated market (Bulgarian Stock Exchange JSC);
  • purchase and sale of shares traded on the OTC market;
  • purchase and sale of shares traded on foreign markets (regulated and OTC market);
  • administration of corporate events and payments for distribution of dividends.



General Information

Documents:

  • Brokerage contract for financial instruments transactions;
  • Financial instrument transaction order;
  • Customer categorization document;
  • Notification of appropriate service;
  • Other documents (you may receive them at the Bank);
  • General Terms applicable to contracts with clients of First Investment Bank AD for investment services and activities with financial instruments.

Fees and commissions according to the current Tariff of the Bank are applied.

Signing contracts, giving instructions, orders or requests, and any other legal actions for and on behalf of the client by proxy are allowed only if a notarized power of attorney is presented containing representative powers for carrying out management and/or disposal actions with financial instruments, and a declaration by the proxy that he does not carry out by occupation business transactions with financial instruments.

First Investment Bank AD in pursuance of Art. 10 of the Ordinance on the requirements related to the activities of investment intermediaries and with the objective so the customers, respectively the potential customers can make information-based investment decision, provides a description of the nature and characteristics of the offered and traded by the Bank as an investment intermediary financial instruments and the risks associated with them.

It should be taken into consideration that investment in financial instruments can bring additional risks to investors from unexpected changes in economic and market environment and the investor to take financial and other additional obligations as a result of transactions with financial instruments, including unexpected liabilities, additional to the cost of acquisition of the specific financial instruments.

Investing in financial instruments also bears the risk of losing the entire investment.



Risks

Risk related to transactions with shares

Investment in shares mainly brings to the investor market risk, liquidity risk, currency risk, issuer risk and settlement risk.

The market risk related to investments in shares is characterized by the probability of a decrease in the price of securities due to market factors or the so called systemic risk.

The liquidity risk related to investment in shares is mainly associated with the risk that the investor can not sell the desired amount of securities. Liquidity risk in shares traded in the country is associated with the free-float shares (free float) determined for each traded issue.

Currency risk for shares traded in the country is connected and dependent on the movements in the exchange rates. For investors with base currency in Euro there is no such risk (due to the currency board in the country). The currency risk for shares with base currency denominated in EUR is zero.

Risk of the issuer for investments in shares is possible in the event of financial difficulty of the issuer or the so called unsystematic (specific risk).

Settlement risk can occur upon any failure or delay of the process between the time of contracting the transaction and the time of its completion and adverse market effects occurred during this period. It is believed that the risk is lower for transactions executed based on the approach “delivery versus payment” (DVP).

Risk related to transactions in foreign markets

Investments in shares traded on foreign regulated markets are characterized by the same risks as those on the Bulgarian capital market but currency risk also exists.

Currency risk is characterized by the possibility of adverse movement in the exchange rate between the currency in which foreign stocks are traded and the local currency.