Insurance Code approved on first reading

The Commission approved new Insurance Code on first reading. The Code shall be distributed for opinion among the interested organisations and persons. The document is published on our web site, Bulgarian version.

 

Instructions for implementation of Ordinance N3 adopted

The Commission adopted instructions for implementation of   Ordinance N3 for the methods for change of participation and transfer of the accumulated sums of an insured person from one supplementary pension insurance fund to a relevant fund managed by other pension insurance company.

Information in connection with Council of Ministers Decision No. 441 of 04.06.2021

Pursuant to Council of Ministers Decision No. 441 of 04.06.2021 and published list of persons who fall or could fall within the scope of sanctions imposed by the Office of Foreign Assets Control (OFAC) by the United States Department of the Treasury, the Financial Supervision Commission informs that:

 has no relations with persons included in the list under item 1 of Decision of the Council of Ministers No. 441 of 04.06.2021

 in accordance with its legal powers and the current regulatory requirements it observes and is ready to assist the competent authorities under item 1 of Decision of the Council of Ministers No. 441 of 04.06.2021 on the persons included in the scope of inspections.

The FSC emphasizes that in its supervisory practice it will continue to take all legally regulated and necessary measures to preserve the stability of the capital market and the non-banking financial sector as a whole, prevention of illegal practices leading to damage to the confidence of the investment community.

In response to the intensifying process of digitalization in insurance, the FSC adopted guidelines on the application of Ordinance No. 71 of 22.07.2021 on the requirements for the governance system of insurers and reinsurers

Ordinance No. 71 on the requirements for the governance system of insurers and reinsurers, adopted by the FSC on 22.07.2021, was promulgated in SG 64 / 2021 and is effective. In accordance with the delegations provided for in it for issuing guidelines on its implementation, at its meeting on 09.09.2021 the FSC adopted the following instructions:

 Instructions regarding the application of Art. 75, para. 1 of Ordinance No. 71 in connection with the observance of the Guidelines for Outsourcing to Cloud Service Providers issued by the European Insurance and Occupational Pensions Authority (EIOPA-BoS-20-002);

 Instructions regarding the application of Art. 102, para. 1 of Ordinance No. 71 in connection with the observance of the Guidelines on Information and Communication Technology Security and Governance issued by the European Insurance and Occupational Pensions Authority (EIOPA-BoS-20/600).

 These guidelines were adopted by the FSC in response to the intensifying process of digitalization in insurance. Through them, the FSC aims to facilitate the application of the specific requirements for the award of activities to could service providers (services provided through data processing in the so-called. “Cloud space”), which are a source of new risks for insurers and reinsurers and require a higher standard of information security in their activities. With these guidelines the FSC aims to establish additional guarantees to ensure compliance with the confidentiality, integrity and availability of information and information systems, with a view to limit the operational risk to which insurers and reinsurers are additionally exposed as a result of the use of high technologies for storage, processing and access to data.

 The adoption of these guidelines completes the national legal framework for the governance system of insurers and reinsurers in accordance with the Insurance Code and the guidelines of the European Insurance and Occupational Pensions Authority. In this manner conditions are created for better management of the new risks faced by insurers and reinsurers, and the guarantees for protection of the interests of the users of insurance services in the environment of a digitized insurance market in the Republic of Bulgaria are strengthened.

In order to facilitate foreign investors, the FSC has prepared the NOTIFICATION ON DISCLOSURE OF SHARE PARTICIPATION IN A PUBLIC OR INVESTMENT COMPANY FORM in English



The Financial Supervision Commission is pleased to inform all interested parties that in order to assist and facilitate foreign investors in performing their obligation under Art. 145 of POSA, the NOTIFICATION ON DISCLOSURE OF SHARE PARTICIPATION IN A PUBLIC OR INVESTMENT COMPANY FORM endorsed by the FSC has been translated into the English language and published on the FSC’s website.

The obligation of the said persons is to submit the Notification simultaneously in Bulgarian and in English.

The NOTIFICATION ON DISCLOSURE OF SHARE PARTICIPATION IN A PUBLIC OR INVESTMENT COMPANY FORM drafted into the English language may be found under the Documents Section, Documents’ Forms and Samples heading – English version.

Important notice

The Deputy Chairman of the Financial Supervision Commission (FSC), in charge of Investment Supervision Division has decided to execute a Coercive Administrative Procedure under article 118, paragraph 1, p. 1 and p. 4 from the Markets in Financial Instruments Act against BULGARIAN STOCK EXCHANGE – SOFIA JSC for the following:

 Oblige the BULGARIAN STOCK EXCHANGE – SOFIA JSC to hereby undertake the necessary actions, immediately, as a result from which, within an hour of receipt of this notice, to stop the trading of shares, emission ISIN BG1100028080, issued by MOUNTAIN PARADISE INVEST REIT (“Маунтин Парадайс Инвест” АДСИЦ) allowed to be traded as of this moment as a segment of the regulated market.”

The motives for this administrative procedure are as follows:

Thе legislation does not foresee for a legal mechanism for changing MOUNTAIN PARADISE INVEST REIT’s activities or for its conversion into another type of company. At the same time the license of the entity as a special purpose vehicle has been revoked, consequently it has no longer right to undertake the activities subject to its license. In this connection, MOUNTAIN PARADISE INVEST REIT has no longer legal and factual right to execute its investment goals, stated in its prospectus, namely to acquire investment properties, realize capital gains from their sale or lease, and to insure current income for the shareholders. The only legal possibility in the current situation is its liquidation.

On the other hand, following the decision of FSC dated 05.12.2012 for the revoking of MOUNTAIN PARADISE INVEST REIT’ license, the shares of the company, traded on the regulated market, organized by the BULGARIAN STOCK EXCHANGE – SOFIA JSC, are being traded actively. Following the date the license was revoked, the shares issued by MOUNTAIN PARADISE INVEST REIT, have been traded at a price much higher than their net book value as per their latest published financial statements.

The described actual situation creates conditions for destabilization of the market, which generates turnover on sales of shares in which prices frequently exceed their balance values. All this factors, taken together with the lack of perspectives for future development has threatened the interests of investors.

The prohibition of the trade on regulated market with financial instruments, issued by MOUNTAIN PARADISE INVEST REIT is necessary in order to preventively protect the interests of the investors. Therefore, it is necessary that the change of the shareholding structure of the company through deals on regulated market to be prohibited. Such deals presume that the company corresponds to definitive criteria, in relation to which it was allowed to be traded on this market, however, at the moment it does not comply with the requirements.

The initiation of the recent proceeding of Coercive Administrative Measure refers to provision of stability of the financial market and the prevention of significant unexpected financial losses from the side of the participants and the necessity of preventive protection of the investors’ interests.

The interested parties may present to FSC explanations and/or objections under the initiated proceeding until January 7, 2013.