Fibank Subscription rights
Subscription rights are securities that entitle its holder to subscribe shares of a public company in case of a decision to increase the capital of that company. Rights are always issued on the basis of already issued shares and are traded on a regulated market or the OTC market. The ratio between the number of rights and the number of new shares may be subscribed by the holder of the rights is determined by their issuer.
First Investment Bank offers:
- purchase and sale of rights traded on a regulated market (Bulgarian Stock Exchange JSC);
- purchase and sale of rights traded on the OTC market;
- purchase and sale of rights traded on foreign markets (regulated and OTC markets);
- subscription of new issues against rights (exercise of rights);
- administering of proceeds from the sale of rights.
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 related to transactions with subscription rights
Investing in rights mainly brings to the investor market risk, liquidity risk, currency risk and settlement risk.
Market risk related to the purchase of rights is associated with the probability of a decrease in their price as a result of market factors or the so called systemic risk.
Liquidity risk in trading with rights is associated with the risk that the investor can not sell the desired amount of securities.
Currency risk is typical for rights traded on foreign capital markets and it is related and depends on the movements in exchange rates.
Settlement risk can occur in the event of failure or delay of the process between the timing of concluding the transaction and the timing of its completion and adverse market effects occurred during this period.
Risks related to transactions on foreign markets
Investments in rights 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 the possibility of adverse movements in the exchange rate between the currency in which the foreign stocks are traded and the local currency.