The Financial Supervision Commission (FSC) has drafted changes to Real Estate Investment Trust (REIT) Act, which are intended to sift idle REITs from the market, Dnevnik daily reported on June 6.
The bill will seek to double the minimum paid-in capital to one million leva, as well as oblige REITs to maintain a free float of at least 10 per cent.
The bill, which is to shortly be put up for discussion with the investment community, is said to radically cut down REIT numbers from a current count of 60.
The announcement was made by FSC head Apostol Apostolov at a conference with capital markets in Southeastern Europe in light of EU membership.
Should the project get a greenlight from the investment community and interested persons, the new regulations will cover existing REITs as well and they would be given a one-year transition period to comply with the regulations.
According to experts, the bill envisages a number of relaxations as well, such as that the REITs would be authorised to buy real estate abroad. Limitations to investments abroad was among the weak points of the current act, according to a number of fund managers, Dnevnik reported.
The FSC is yet to decide whether foreign activity would be limited to the European Union or third countries.
Among other ideas of the financial oversight watchdog is the introduction of a two-tier management system, which would comprise a supervisory and a board of directors.
