At a session held on March 22, 2006, the Financial Supervision Commission (FSC) adopted the following resolutions:
6. The FSC adopted a resolution to issue a new licence to STS Finance JSC, Sofia City, to perform activity as an investment intermediary. The investment intermediary may effect the investment and additional activities and services provided for under POSA, including underwriting issues and transacting in securities for one’s own account. In order to perform activities and provide services under the new licence, it shall be required that the company has at its disposal at any time capital amounting to not less than BGN 1,500,000. The licence shall be issued under the condition that within a 14-day period the Company proves that it has fully paid in the exigible capital and the initiation fee at the Security Investors Compensation Fund.
7. The FSC registered Sevdalin Rusanov, Emil Atanasov, Plamen Dermendjiev as professional investors.
8. The Commission adopted an Ordinance on the requirements towards the activities of the investment companies and the contractual funds. The promulgation of the aforesaid Ordinance in the State Gazette is forthcoming.
Under the Ordinance, the main underlying provisions and the structure of the Ordinance on the requirements towards the activities of the investment companies adopted by Council of Ministers Decree No. 268 of 2000 have been included, where the texts referring to the activities of the investment companies have been brought in conformity with the amendments introduced in the POSA, the CA and the AA. The requirements toward the activities of the contractual funds have also been listed under the Draft, introduced as a collective investment scheme, along with the investment companies under the last amendments to the POSA (SG, Issue No. 39 dated May 10, 2005).
Under the Ordinance, the requirements toward the contents of the contract have been provided in detail, which contract the management company concludes with the fund’s depository bank in connection with the safe-keeping of the contractual fund’s assets.
The terms and conditions and the procedure under which, in the cases where the licence to perform activities has been withdrawn, as well as in the cases of dissolution or declaration of bankruptcy of a management company that manages a contractual fund, the fund’s management is undertaken by a different management company, have been provided.
Terms and conditions are introduced, under which the Commission issues an authorization for transformation and dissolution of the contractual fund.
The rules under which evaluation of the assets of the investment company and the contractual fund is performed have been provided, and for each type of securities and financial instruments a specific procedure has been introduced in order to perform a subsequent evaluation, where it is provided in the cases where the said procedure is impossible to be implemented, these to be evaluated under conventional methods that have been explicitly alluded to under the Ordinance or under methods specified in the investment company and the contractual fund’s assets evaluation rules.
9. The Commission adopted an Ordinance on the requirements towards the activities of the management companies. The promulgation of the aforesaid Ordinance in the State Gazette is forthcoming.
Under the Ordinance, the structure and the principle provisions underlying the Ordinance on the requirements towards the activities of the management companies adopted by Council of Ministers Decree No. 269 of 2000 have been retained, and amendments and supplements have been provided in order to bring the legislative act in compliance with the amendments introduced in the POSA (SG, Issue No. 39 dated May 10, 2005), and more specifically:
Under the Ordinance, additional requirements toward the management companies are provided with a view to extending their activities with the additional services under Art. 202, para. 2 of the POSA.
The minimum contents of the rules for personal transactions in securities of the members of the management and supervisory bodies, of the investment consultant working under a contract for the management company, of the management company officers and of the persons related to these is regulated.
The contents of the general terms and conditions are expanded, under which terms and conditions a management contract is concluded with the management company in connection with the management of an individual securities portfolio using one’s own discretion without specific orders on the part of the customer.
Stricter requirements towards natural persons are introduced, who accept orders for purchase and sale of shares of an investment company and units of a contractual fund on behalf of the management company, where a possibility is given to the management company to perform this through a contract concluded with a bank or a non-banking financial institution as well.
A regime is established, under the terms and conditions of which the management company may invest the funds of the collective investment schemes in derivatives.
The requirements set towards the capital adequacy of the management company are specified and the regime of investing its own capital is liberalized.
10. The Commission adopted Instructions on the interpretation and application of Art. 176, para. 1, items 9 and 13 of the Social Insurance Code.
Under the Instructions on the interpretation and application of Social Insurance Code’s provisions adopted, the subject scope of the shares and/or the units issued by collective investment schemes that fall into the application field of Art. 176, para.1, item 9 and item13 of the Social Insurance Code is defined.
The Instructions are to be published on the FSC’s website under the Documents Section, Instructions and Requirements.