On the 6^th and 7^th of March 2012, the Financial Supervision Commission (FSC), jointly with the High School of Insurance and Finance (VUZF) and the Ministry of Education, Youth and Science, held a two-day training on „Financial and Economic Literacy“ for students from the 11^th Grade of the National Business and Finance School and the National Trade and Banking High School in Sofia. This is a new educational module developed by the three institutions to increase financial literacy of young people in Bulgaria.

Fulfilling one of its priorities by implementing an active educational policy to increase the financial competence of the general public, the FSC has developed several training modules for different social groups. One of the week-long training programs for students held annually enjoys strong public support, which is why FSC has also developed shorter training modules within one or two days.

The current two-day program, implemented jointly with the Center for Continuing and Vocational Training to VUZF and the Ministry of Education, Youth and Science, is a pilot project for students from Sofia, with the prospects of including young people from all over the country. The program was divided into two parts: a theoretical and a practical one. In the first part, lecturers from VUZF and FSC gave presentations about the functioning and the specificity of the capital, insurance and pension insurance markets and the role and functions of the FSC to the students.

During the second day, the students paid a visit to the Bulgarian Stock Exchange, where experts explained to them practical aspects of the functioning of the market and the pupils had the opportunity to observe stock trading in real-time.

Later on, the participants in the program visited the Insurance Company „Interamerican“ and got acquainted with the specifics of the insurance business.

The training was attended by twenty students and four teachers who were extremely satisfied with the program and expressed their willingness to attend future training modules.

The Bulgarian Financial Supervision Commission hosted a study visit of experts in the insurance field from the Central Bank of Republic (CBK) of Kosovo in the period 19-23 March 2012. The representatives from Kosovowere introduced to the licensing procedures, the methodology for on-site inspections and verification of documents and topics on financial reporting and analysis.

 Future cooperation between the CBK and FSC, especially the opportunities for implementing joint projects in the insurance sector, was also discussed. In this regard, the FSC’s experience as a partner in twinning projects financed by the EU was shared. A topic of the visit was also the FSC’s role in the process of EU accession and the harmonisation with the European legislation.

The Chairman of the Bulgarian Financial Supervision Commission – Mr. Stoyan Mavrodiev visited the Second annual international forum organized by the Centre for Global Dialogue and Cooperation in Vienna, Austria. As the sole representative from a Bulgarian state institution who participated in the event, he held meetings with President Clinton, General Wesley Clark – Supreme Allied Commander Europe of NATO 1997-2000, and the governing body of the Qatar Investment Fund, headed by its President – Professor Al Meer. They discussed a number of opportunities to attract foreign investment in the country to generate revenue for the budget of Bulgaria of over 100 million euros, which could result in new jobs. Presentations and proposals were made during specifically organized meetings. Mr. Mavrodiev said: “I will inform the Prime Minister Borisov about the identified ideas for investment opportunities in Bulgaria as I will personally deliver the messages”.

The Chairman of the FSC took part in the discussions together with the official panelists at the event – Vladimir Kavaric, Minister of Economy of Montenegro, Anatoly Karpov – First Deputy Chairman of the Russian State Duma Committee for Natural Resources, Environment and Ecology, Giles Chichester – President of the European Energy Forum, and Dr. Claus Raidl – President of the Austrian Central Bank. The messages of the Prime Minister of Zimbabwe and of the Deputy Prime Minister of Kosovo were outlined as well. The conference ended with the official award ceremony which was preceded by the keynote speech of Bill Clinton.

22 May 2012, the National Assembly of the Republic of Bulgaria unanimously elected the new deputy chairman of the Financial Supervision Commission – Mr. Nikolay Popov. He will be responsible for Investment Supervision Division in the FSC. Before his election, Mr. Popov held the positions of Chief Secretary to the Commission. Previously, he developed his career as Chief tax inspector, Executive Director of the National Revenue Agency (NRA), financial manager of „Festa Holding“, and managing administrative affairs of „Alfa Finance Holding“ AD in Macedonia. He was a Board member of the NRA; member of the Management Board and participant in the Meetings of Representatives of the National Health Insurance Fund, Member of the Supervisory Board of the National Insurance Institute and a member of the Executive Board and participant in the General Assembly of the Indo-European Organization of Tax Administrations (IOTA).

Nikolay Popov was offered for the position by the Chairman of the FSC – Mr. Stoyan Mavrodiev. In his official speech to the National Assembly on the proposal Mr. Mavrodiev said: „I am convinced and I guarantee that Mr. Nikolay Popov will contribute with his professionalism and personal qualities to the successful realization of goals and objectives that the Commission as a state institution responsible for supervision and regulation of the non-banking financial organizations must implement „.

The three-day official study visit of the representatives of the Jordanian Securities Commission to the Financial Supervision Commission was carried out under the TAIEX Instrument (Technical Assistance and Information Exchange Instrument) managed by the Directorate-General Enlargement of the European Commission.

The Jordanian institution was established in 1997 as an autonomous administrative body which oversees the capital market in the Kingdom of Jordan. The mission and goals of the Jordanian Securities Commission as well as those of the Financial Supervision Commission of Bulgaria are the creation and maintenance of an effective, fair and transparent capital market. Its main tasks are the protection of the interests of investors, the protection of the capital market from different types of risks, strengthening the confidence in the market, the improvement of local legislation and the Commission’s activities. The supervised entities of the Jordanian Commission are the Amman Stock Exchange, the Securities Depository, mutual funds and investment firms. In 2008, the Securities Commission of Jordan adopted the multilateral Memorandum of Understanding of IOSCO.

Bearing this in mind, the cooperation between the two institutions has solid foundations and the experience of the FSC as an institution within an EU Member-State is extremely important and useful for the Jordanian experts.

During their visit, the guests got acquainted with the experience of our supervisory authority regarding its practice of separating of accounts, content of contracts with customers, separation of client assets in the event of bankruptcy, bank settlement of accounts and the control exercised by the FSC. The Jordanian experts were informed of the relations with investment intermediaries, as well as with the types of statements that they provide the FSC when they have to perform the separation of accounts. The guests were presented with case studies on the topics discussed. This study visit has enabled not only the representatives of the Jordanian Securities Commission, but also their Bulgarian counterparts, to discuss new perspectives, to identify best practices and to be better prepared for the challenges that arise in the global financial world.

The Bulgarian Financial Supervision Commission has gained considerable experience in European projects which deal with training and strengthening the administrative capacity of countries on the Balkans (Bosnia and Herzegovina, and Montenegro), but had not yet had the opportunity to meet colleagues from the Kingdom of Jordan. Hence, this visit was seen as an opportunity to expand our international contacts in the Middle East.

The meeting held on July 6th, organized by the Financial Supervision Commission in connection with the working visit of Mr. Patrick Hoedjes, Chair of EIOPA IT & Data Committee, and Mr. Kitzmantel, IT Project Manager, was attended by representatives of insurance companies, members of the Association of Bulgarian Insurers and experts from the FSC. The purpose of the working visit of the representatives of one of the four European Supervisory Authorities was to acquaint the audience with the framework, mandate, organization, subgroups, activities and the results that are being expected of the EIOPA IT and Data Committee, including EIOPA IT and Data Strategy Specifications and Implementation Plan.
In the first part of the meeting, the employees of the Information Departments of the insurance companies, committed to the processing and submission of data to the FSC, who were present were introduced by the European experts to the new format, XBRL, in which the information for supervisory purposes will be presented after the entry into force of Solvency II Directive. The second part of the presentation was aimed at the FSC’s staff exercising supervisory activities in connection with the alignment of EIOPA IT & Data Implementation Plan with the National Supervisory Authority’s objectives and the Bulgarian FSC’s involvement in the works of ITDC.
The one-day visit of the European experts contributed greatly to raising the awareness and the competence of the Bulgarian specialists from the insurance industry and the Financial Supervision Commission in connection with the higher criteria and the forthcoming implementation of Solvency II Directive.

Since 1 November 2012 the application of the Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps (the Regulation) has commenced.

In the Regulation and its implementing acts there are requirements for information disclosure to national competent authorities by natural and legal persons having net short positions in relation to issued share capital of an entity, whose shares have been admitted to trading. The notification threshold, as stated in art. 5 of the Regulation, is 0.2 % of the issued share capital of the relevant entity and each 0.1 % above this percent.

The requirement for disclosure to the national competent authority comes into force on the first day following the day of starting applying the Regulation, i.e. on 2 November 2012. The relevant time for calculation of a net short position is at midnight at the end of the trading day on which the natural or legal person holds the relevant position. The disclosure is made not later than 15.30 on the following trading day.

With regard to the Regulation a new section on the FSC’s website was created – Short selling – http://www.fsc.bg/en/registers-and-checks/short-selling/notification-templates/ . The texts of the main Regulation and the Deledated Regulations in Bulgarian and in English were published in this section. In accordance with the accepted in the Delegated Regulations formats for information disclosure the FSC has prepared and published notification templates in .xls format in Short Selling Section. These templates have to be sent to the national supervisor by persons having net short position in shares of at least 0.2 %.

The notifications should:
– be sent to the following e-mail address: delovodstvo@fsc.bg, signed with electronic signature; or 
– be sent by post mail, accompanied by a durable medium (containing .xls file); or
– be submitted in the FSC premises, accompanied by a durable medium.

The Regulation contains provisions for public disclosure of information regarding the net short positions of natural and legal persons in respect of the issued share capital of the entity whose shares are admitted to trading. In this case the threshold, according to art. 21 of the European Commission Delegated Regulation № 918/2012 of 5 July 2012 supplementing Regulation № 236/2012, is 0.5 % of the issued share capital of the entity and each 0.1% above this percent.

Notification templates for public disclosure of information can be found in the Short Selling Section / Notification templates. They should: 
– be sent to the email address: delovodstvo@fsc.bg , signed with electronic signature; or
– be sent by post mail, accompanied by a durable medium (containing .xls file); or
– be submitted in the FSC premises, accompanied by a durable medium.

Public disclosure will be made by the FSC in Short Selling Section / Information on significant net short positions in shares.
Information regarding the obligation for information disclosure by natural or legal persons of significant net short positions in sovereign debt and of uncovered positions in sovereign credit default swaps might be found on internet page of the Bulgarian Ministry of Finance: http://www.minfin.bg/en/page/819.

On December 11th and 12th, a meeting of the Euroins Insurance Group College of Supervisors was held at the premises of the Financial Supervision Commission (FSC) in Sofia for the third consecutive year.
The first (closed) session of the supervisors was attended by representatives of the European Insurance and Occupational Pensions Authority (EIOPA), the Romanian Insurance Supervisory Commission, the Insurance Supervisory Agency of Macedonia, and FSC experts from the Insurance Supervision Division and the International Cooperation Directorate. At the session, the results of the operation of the Group and its subsidiaries in Romania and Macedonia in 2012 were discussed, and some recent legislative changes were announced.
On the second day, which was held in an open format, representatives of Euroins Insurance Group Ltd., Bulgaria made a presentation on the position and the future plans of the Group in connection with the forthcoming introduction of the EU Solvency II Directive.
Following the presentations and discussions, conclusions were made and appropriate measures for 2013 were identified.
The official representative of EIOPA, Ms. Rita Szep, expressed her satisfaction from the meeting held by the Supervisory College. She emphasized the excellent cooperation and the significant results in the exchange of information and experience between the three authorities. She also made some recommendations and welcomed the efforts made by the Management and the personnel of Euroins Insurance Group Ltd., Bulgaria to strengthen the holding, to expand its market share, and to bring its operation in line with the EU requirements.

According to the Statute of EIOPA, one of its functions is to monitor the annual meetings and to coordinate the activity of the supervisory colleges for cross-border insurance groups.

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.

In connection with signals submitted in the Bulgarian Financial Supervision Commission (BFSC) and regarding numerous publications for providing investment services and activities, including through electronic platforms for trading and financial instruments, from companies which are not licensed by the BFSC to operate as investment intermediaries, the BFSC would like to notify the investors about the following:

The companies listed below are not licensed by the BFSC and hence they are not eligible to provide investment services and activities under the Markets in Financial Instruments Act in the territory of the Republic of Bulgaria, including through electronic platforms for trading with financial instruments:

– InstaForex, Russia
– Insta Sofia Ltd.

We would like also to inform the potential investors that the investment services and activities can be provided only by companies licensed by the BFSC to act as an investment intermediaries, banks licensed by the Bulgarian National Bank and entered in the register of the BFSC as investment intermediaries, investment intermediaries from member states under the freedom to provide of services rules through a branch in the Republic of Bulgaria.

Regarding the activity of management of portfolios of financial instruments and bankroll, except the aforementioned companies, authorized to carry out this activity are companies licensed to operate as a management company or a management company from a member state.

The investors are advised to check whether the respective company is licensed by the BFSC and if it is authorized, in accordance to the issued license, to provide investment services and activities to the clients.

List of investment intermediaries and management companies licensed by the BFSC could be found on the FSC’s website at:
http://www.fsc.bg/Lists-of-supervised-entities-en-148

List of investment intermediaries from EU member states notified the BFSC for their intention to provide services and activities on the territory of the Republic of Bulgaria could be found on the follow link:
http://www.fsc.bg/Notifications-en-111

The investors should consider that the contracting and submission of orders, including the provision of funds for concluding transactions with financial instruments using the services of companies that are not licensed by the BFSC or by the competent authority of another member state, might lead the potential investors to deception and significant financial losses.

The financial assets and funds provided by the investors to the companies which are not licensed and therefore supervised by BFSC are not guaranteed by the Investor Compensation Fund.