BEAM (Bulgarian Enterprise Accelerator Market) – the market for the growth of small and medium-sized companies is organized by the Bulgarian Stock Exchange (BSE) and registered, according to the current legislation, in the Financial Supervision Commission. It enables small and medium-sized companies to obtain financing for their activities under reduced conditions. By its very nature, the BEAM market is a multilateral trading system that brings together multiple interests of third parties to buy and sell financial instruments. The market is an intermediate level before the actual listing of a company on the stock exchange.
What are the requirements for companies?
Issuers on the market can be small and medium-sized companies that are joint-stock companies and, according to their latest annual accounts, must meet the following requirements:
- Have fewer than 250 employees;
- The net annual turnover of the company should not exceed EUR 50,000,000;
- The total balance sheet value of the assets should not exceed 43,000,000 euros.
What opportunities does the BEAM market provide for issuers?
The market provides great development opportunities for small and medium-sized companies that want to expand their operations and need funds to do so. Shares, depository receipts, bonds, warrants and rights are traded on it. Both initial public offerings and secondary offerings are permitted. Following the amendments to the legislation promulgated in the State Gazette No. 51 of 2022, issuers have the opportunity to raise capital up to EUR 8 million for an initial public offering in any 12-month period without the need to draw up a prospectus. The latter also applies to cases of capital increase of up to 8 million euros of a company already admitted to trading. However, for raising capital above 8 million euros, as well as for increasing the capital by more than 8 million euros of a company already admitted to trading, a prospectus is required, which is approved by the Financial Supervision Commission and has a simplified form and content.
Issuers are required to publish six-monthly and annual financial statements.
Another advantage is that the management bodies of the issuers can, without the convening and approval of a general meeting of shareholders, carry out disposal transactions of a certain value, as well as conclude transactions of a certain value, in which liabilities and/or receivables arise.
Companies listed on the BEAM market do not have the obligation to appoint a specific person to make contact with investors.
Another advantage that issuers can take advantage of is the possibility of a subsequent simplified listing on the main market of the BSE.
The fact that this multilateral trading system provides an opportunity to promote the activities of the issuers, as well as the goods and services offered by them, is of significant importance.
Who can invest in the market?
The BEAM market provides an opportunity for all individuals who wish to invest in small and large companies to engage in the trading of financial instruments. At the moment, there is an exception only for pension companies, against which there are legal restrictions.
According to the current legislation from 01.01.2021 to 31.12.2025, the profit realized from the disposal of shares on the BEAM market by individuals is not subject to taxation. And with regard to legal entities, a reduction of the tax financial result is foreseen with the profit from the disposal of financial instruments realized in this market.
What is the function of the advisor?
If a company wants to take advantage of the opportunities offered by the market for public offering of financial instruments, it should conclude a contract with an adviser. BSE approves advisers who must meet a number of requirements, also maintains a Register of Advisers, where it is easy to check whether a person has the right to carry out this activity. The advisor has advisory functions, supporting the company’s activities on admission to trading on the BEAM market, as well as in its subsequent activities. The relationship between the company and the adviser is regulated by a contract, which is concluded for a period of at least two years.
MIKINSKI AND PARTNERS LAW OFFICE is registered as an adviser on the BEAM small and medium-sized companies growth market and can assist companies in the process of listing, as well as in their subsequent activity on the market.
