The Financial Supervision Commission – with a commitment to stable results in a time of digitalization, green investments and regulatory changes

  In the context of the post-Covid pandemic, global digitization, the European Green Deal, the hostilities in Ukraine and on the threshold of the euro area the Financial Supervision Commission continues to work for stability of the insurance market in Bulgaria, to introduce innovations in the regulation of the capital market, as well as ensure absolute strictness and complete transparency of the actions and processes of the pension insurance market.
The development trend of the capital market is headed towards digitization and creation of conditions for more participants and reduced administrative burden. The positive relationship between innovation and financial technology has already reshaped standard consumer behavior and thinking, and this process has led to new opportunities for realizing optimized business models. At the same time, we, the participants in the financial sector, have the task of analyzing and forecasting potential risks. It is in this direction that the FSC focuses its activity on the balance between the promotion of innovation on the part of companies for investment purposes and the protection of consumers from the negative aspects that the new online space implies.
In order to achieve results with the set development strategy, the Financial Supervision Commission has passed through specific steps such as the development of financial literacy of users of financial services and investors, improving the communication process by conducting regular meetings with FinTech companies to discuss minimal risks and maximum benefits from technologies, promoting the development of start-up companies by activating the capabilities of the Innovative Hub, as well as adapting the new regulatory framework for crowdfunding. Together with the participants in the non-banking financial sector, we create a sustainable and innovation-friendly business environment, with an emphasis on the need for a partnership between the national regulator and business.
Dynamics in the development of technologies and digitization have a key role in changing consumer attitudes and growth expectations. The role of the FSC is to provoke the sync between the regulatory requirements and their implementation in a digital environment, with the ultimate goal being to reduce the administrative burden. Part of the specific results are the functioning Innovation Hub, providing a single point of contact with FinTech companies and the changed regulations for access to the capital markets of small and medium-sized enterprises. The FSC mobile application, building a unified information system for submitting and receiving information from supervised persons in an electronic standardized format is also in progress.
An interesting moment in the current situation is that, within the framework of integrating innovations to reduce the administrative burden, the European Commission presented a Proposal for a Regulation of the European Parliament and the Council establishing a European single access point (ESAP). Its purpose is to provide the public with centralized access to all necessary information relevant to financial services. The European single access point will give investors easy, fast and comparable access to data on European companies, thereby also facilitating access to financing for European companies. ESAP is expected to contribute to the further integration of financial services and capital markets in the EU single market and to promote the development of smaller national capital markets and economies by providing greater visibility to them.  The Financial Supervision Commission, in sync with the European Commission, introduces measures to implement the new regulations and creates conditions for the realization of the vision of a European single access point.
Certainly one of the extremely meaningful and cause-oriented topics is that of the “Green Deal”. Ecology, social responsibility and transparent management are already part of the worldview and way of thinking of institutions and regulators in Europe. In accordance with the objectives of the European Union, the Financial Supervision Commission in Bulgaria supports through specific actions the targeting of national and European funding towards a sustainable economy, the planning of tools for business recovery after crises, as well as the balanced regional development of the country. I believe, and I see the specific results, that the Bulgarian regulator in the non-banking sector strategically arranges its actions in support of achieving the goals of the “Green Deal”. In this line of thinking, we all as a society are tasked with turning our attention to renewable energy, energy efficiency, green buildings, clean transportation, products created by the circular economy. After the adoption of the European Green Deal, the focus of the FSC will be on financial risks for institutions and the financial system, as well as on sustainability risk (ESG risks).
When we talk about achieving sustainable goals, examples are always important. Green bonds are a suitable financial instrument for large-scale sustainability projects, by giving access to a robust financing tool for green projects compliant with the EU taxonomy. On the other hand, investors in such bonds will be able to more easily assess and compare the sustainability of their investments, which will reduce risks and strengthen their confidence in the market. The new EUGBS voluntary standard will be open to all EU and non-EU issuers, including corporations, financial institutions and issuers of covered bonds and asset-backed securities, as well as governments and other public bodies.
In this regard, the challenges to the FSC to exercise its supervisory powers over capital market participants in compliance with the requirements laid down in the legislative package for Sustainable finance, namely the Disclosures Regulation, the Climate and Sustainable Finance Benchmarks Regulation and the Taxonomy Regulation.
The FSC is also a major participant in the process of creating the National Plan for the Introduction of the Euro in Bulgaria. The FSC’s vision for this key process for the Bulgarian economy , includes the systematization of the necessary measures and actions in connection with the conversion of financial instruments. We intend to carry out the necessary monitoring of the expected stages for the adaptation of the clearing and settlement systems to work with the euro.
In the context of the complicated international situation caused by the war in Ukraine and the sanctions and restrictions imposed by the EU, USA, Canada, the UK against the Russian Federation, the Russian Central Bank, credit institutions and companies, as well as individuals, the Commission took timely measures such as issued recommendations and guidelines to the investment, insurance and insurance sector for increased caution and the implementation of a strengthened risk management policy before proceeding with investments in financial instruments issued by issuers related to the Russian Federation.
The challenges we face provoke us to be vigilant, focused on achieving the set goals of increasing consumer protection, as well as promoting investors, of a stable, regulated and transparent non-banking sector.
Amid this global transformation, the FSC is starting a new strategic period for 2022 – 2024. The change for the regulator includes long-term planning, a strong expert team and determination to implement innovation in the field of digitization and regulations to stimulate the capital market. All this will be accompanied by constructive dialogue with all stakeholders in the processes regulated by the FSC. An important part of the development of the Bulgarian capital, insurance and social insurance market is the active and effective communication with businesses in the direction of developing concepts and sustainable strategies. Our goal is to be predictable in our actions and to show objectivity when making decisions on which the development of Bulgaria depends.

Mr. Boyko Atanasov, Chair of the Financial Supervision Commission, presented some of the results achieved by the FSC for the period 2019-2022, as well as important highlights of the adopted Development Strategy of the FSC for the period 2022-2024. The presentation today was within the framework of a round table on the topic “Strategic Management and Regulation of Business Processes in the State”, organized by the Higher School of Insurance and Finance (VUZF) and its Laboratory for Academic and Applied Research.
The Chair of the FSC presented to the audience some of the results achieved for the last three-year period. 2019 – 2022, on the one hand, is the time frame of the FSC Strategy for the specified period, and on the other hand, this period also coincides with the election of Boyko Atanasov for the position of Chair of the Commission.
“For the three-year period, we managed to ensure stability of the insurance market, we introduced innovations in the regulations of the capital market and strengthened the pension-insurance market to the extent of exceptional rigor and full transparency. All this happened in sync with the development of the organization – digitization, optimized processes and at the same time improvement of the team of high-level experts of the FSC. We worked with public visibility for every single innovation or sanction we made.”

Mr. Atanasov briefly presented the new Strategy for the development of the FSC for the period 2022-2024 as a basic and important tool for achieving the set goals and expected results. “The facts about the results achieved so far, presented in the report for the previous period, presented on the official page of the FSC, show that the Strategy of the FSC is well formulated and the main priorities and set sub-goals are being implemented. The strategy of the FSC for the upcoming period is aimed at several main priorities, with the ultimate goals being the reduction of  administrative burden, flexibility and adaptability to the business environment, and optimization of processes through digitization.”
During the round table discussions, he also announced the upcoming presentation of the new institutional site of the FSC and the Commission’s mobile application, the purpose of which is to facilitate users in the process of obtaining information about regulations in the non-banking financial sector. Boyko Atanasov also described the functions of the Innovation Hub, providing a single point of contact with FinTech companies. It was clearly emphasized that the establishment of a unified information system for submitting and receiving information from supervised persons in an electronic standardized format is also in progress.

“We act as a referee, not a player. In detail – we aim to create conditions for equality in the criteria for access to capital markets and opportunities for fair competition between participants. When we give trust and fair treatment, we get trust and fair treatment. This should be the basic principle of functioning not only of the Commission, but also of any other state organization. The governance style should be authoritative, not authoritarian.” Mr. Boyko Atanasov also stated.

The presentation ended with an emphasis on the regulatory functions of the FSC and the resulting benefits for users of financial services, by ensuring stable and secure financial markets.
During the event, the panelists – leading representatives of state institutions and regulatory bodies, experts, representatives of the academic and scientific field, represented by the Fiscal Council, the Executive Agency for the Promotion of Small and Medium Enterprises, the Bulgarian Development Bank, Unicredit Bulbank, the Bulgarian forum of business leaders, VUZF, the Bulgarian National Bank, the Bulgarian Stock Exchange and the FSC discussed the interaction between business and the state, strategic directions and priorities, the state budget as instruments in the implementation of this policy, as well as how far the regulatory function of the state should extend.