Ordinance No. 5 of the Ministry of Finance and the BNB of 9 December 2025 on the Terms and Procedure for Acquisition, Registration, Redemption and Trade in Government Securities

Ordinance No. 5 of the BNB 1

ORDINANCE No. 5 of the Ministry of Finance and the BNB of 9 December 2025 on the terms and procedure for the acquisition, registration, redemption and trade in government securities (Published in the State Gazette, No. 109 of 16 December 2025, effective from 1 January 2026)

Chapter One GENERAL PROVISIONS

Art. 1. (1) This Ordinance determines the terms and conditions for the acquisition, registration, redemption and trade in dematerialized government securities, hereinafter referred to as "government securities" (GS), issued by the Minister of Finance for the domestic market. This Ordinance does not apply to the trade in GS on regulated markets and multilateral trading facilities. (2) This Ordinance also applies to the registration of transactions in GS concluded on a regulated market or multilateral trading facility (MTF). (3) Dematerialized government securities are GS that are not issued in physical form, but exist in the form of accounting and electronic records in software systems certifying ownership thereof.

Art. 2. (1) Government securities are issued by decision of the Minister of Finance. (2) Government securities may be:

1. short-term government securities – with a maturity of up to one year inclusive;
2. medium-term government securities – with a maturity of one to five years inclusive;
3. long-term government securities – with a maturity of more than five years. (3) Government securities may carry income in the form of discount from the nominal value and/or interest. (4) The Bulgarian National Bank (BNB):
4. organizes the activities for the realization of GS on behalf of and for the account of the State and publishes information about them; for this purpose, it builds and organizes a system for conducting auctions and subscriptions for the sale of GS (ADCTS);
5. after coordination with the Ministry of Finance, adopts a tariff for the fees and commissions for the processing of transactions in GS on the primary and secondary markets;
6. builds and organizes an electronic system for the registration and servicing of trades in GS (ESROTS);
7. builds and organizes a settlement system for GS (SDCTS). (5) All GS issued by the Minister of Finance are registered by the BNB in the systems under para. 4, items 3 and 4. (6) Government securities issued by the Minister of Finance for the domestic market, registered by the BNB in accordance with para. 5, may be transferred to central securities depositories established in Member States, under the conditions of direct participation of the respective central securities depository within the meaning of Art. 3, para. 1, item 5. (7) Participants in ESROTS and their clients may transfer and hold their owned GS in central securities depositories established in Member States, under the conditions of para. 6. In the cases under the first sentence, from the moment of registration of the GS owned by participants in ESROTS and their clients in accounts in a central securities depository established in a Member State, the legislation of the Member State applicable to the respective account of the respective central securities depository shall apply to all transactions and operations with them.

2 Ordinance No. 5 of the BNB (8) The Bulgarian National Bank organizes the activities under para. 4 and 5 in accordance with an agency agreement concluded with the Minister of Finance. (9) All transactions carried out in accordance with this Ordinance with movement in the TARGET2-Securities special monetary accounts in the Trans-European Automated Real-time Gross Settlement Express Payment System (TARGET) are carried out in compliance with the "delivery versus payment" (DVP) principle. (10) Government securities issued by the Minister of Finance for the domestic market, registered by the BNB in accordance with para. 5, may be eligible assets under the General Conditions of the BNB for the implementation of the Eurosystem monetary policy.

Art. 3. (1) Participants in ESROTS may be:

1. primary dealers of GS;
2. sub-depositories of GS;
3. investment intermediaries, other than the persons under item 1, whose license includes the services and activities under Art. 6, para. 2, items 1, 2 or 3 of the Markets in Financial Instruments Act, including those from Member States;
4. banks, other than the persons under items 1 and 2, whose license includes the services and activities under Art. 2, para. 2, item 9 of the Credit Institutions Act, including those from Member States;
5. central securities depositories from Member States;
6. the Bulgarian National Bank and other members of the European System of Central Banks;
7. the Ministry of Finance;
8. other persons approved by the Minister of Finance and the Governor of the BNB. (2) Primary dealers are persons approved by the Minister of Finance in accordance with Ordinance No. 15 of 2007 on the control over transactions in government securities (Ordinance No. 15 of 2007). (3) Sub-depositories of GS issued on the domestic market may be banks and branches of foreign banks operating on the territory of the Republic of Bulgaria, whose license includes the activities under Art. 2, para. 2, items 4 and 9 of the Credit Institutions Act, as well as institutions that have obtained permission in a respective Member State to carry out activities as a central securities depository. (4) Participants in ESROTS are also participants in SDCTS.

Art. 4. (1) Participants in ESROTS must meet the following requirements:

1. persons, with the exception of those under Art. 3, para. 1, items 6, 7 and 8, must hold a license from the respective competent authority;
2. have an open TARGET2-Securities special monetary account in TARGET or designate a TARGET2-Securities special monetary account in TARGET of a bank that they will use for the purposes of monetary settlement of their operations with GS based on a contract concluded with the bank;
3. have technical communication means by which to send requests and notifications for transactions in GS on the secondary market, as well as to receive notifications and confirmations from the BNB. (2) Technical communication means that may be used are: SWIFT and the web-based interface of ESROTS when using a qualified electronic signature (QES) that meets the requirements of Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC (OJ, L 257 of 28 August 2014). (3) Other technical means may be used after the Ministry of Finance and the BNB notify participants that they are ready for their implementation. (4) To facilitate direct participation in ESROTS, participants under Art. 3, para. 1, item 5 may designate a local sub-depository of GS to perform the function of technical operator of their connection to ESROTS on behalf of and for the account of the respective participant under Art. 3, para. 1, item 5, by carrying out all communication with ESROTS based on an agreement concluded between them.

Ordinance No. 5 of the BNB 3 Art. 5. (1) Admission to participation in ESROTS is carried out by a commission determined by the Deputy Governor of the BNB heading the "Banking" Directorate, which includes three permanent and three reserve members. (2) Candidates for participation in ESROTS submit an application on paper using the form (Appendix No. 1) to the "Fiscal Services" Directorate at the BNB, signed by the persons authorized to represent the institution. The following documents are attached to the application:

1. a unique identification code or an extract from the commercial register issued no more than one month prior to the date of submission of the application; a candidate for participation in ESROTS established in a Member State or a third country applies a corresponding document equivalent to an extract from the commercial register issued by a judicial or administrative authority of the country in which it is established; in case the relevant national legislation of the candidate does not provide for such a document, it applies another document establishing its status; participants under Art. 3, para. 1, items 6 and 7 do not submit such an extract;
2. notarized specimens of the signatures of the persons authorized to represent the institution;
3. a copy of the relevant license for a bank, investment intermediary and central securities depository;
4. a request for opening accounts for the settlement of GS (Appendix No. 1 to Art. 9 of Ordinance No. 31 of 2007 on the settlement of government securities);
5. the Business Identification Code (BIC) of the participant to be used for communication with ESROTS, and data for the QES certificates of users (issuer, holder, serial number, type and validity) authorized by the participant to establish connection via the web-based interface of ESROTS;
6. a list of persons authorized to establish contacts in case of problems arising in connection with operations with GS of the participant. (3) For the purposes of monetary settlement of operations with GS on the primary and secondary markets:
7. participant banks designate the number of the TARGET2-Securities special monetary account in TARGET-BNB or in another systemic component of TARGET;
8. participants who do not have a TARGET2-Securities special monetary account in TARGET apply a declaration using the form (Appendix No. 2) for the existence of a concluded contract with a chosen bank for settlement to carry out payments for their operations with GS through the TARGET2-Securities special monetary account of the bank in a systemic component of TARGET;
9. for the purposes of monetary settlement, each settlement bank, a participant in the TARGET-BNB systemic component or in another systemic component of TARGET, submits a request to the BNB or another central bank to connect its TARGET2-Securities special monetary account in TARGET with one or more accounts for the settlement of GS. (4) The operator of ESROTS officially certifies/obligates the TARGET2-Securities special monetary accounts in TARGET used by participants in their transactions with GS. (5) Participants in ESROTS under Art. 3, para. 1, items 1, 3 and 4, who are not sub-depositories of GS, apply a declaration from a chosen sub-depository bank (Appendix No. 3) based on a concluded contract with it, in which they will deposit GS that they have transferred to clients. (6) The commission under para. 1 considers the application of the candidate for participation and the documents attached to it, and the BNB gives a response to the candidate within a period of up to one month from the receipt of all necessary documents. (7) In case of an application for participation from a candidate under Art. 3, para. 1, item 5 for the purpose of establishing a connection between ESROTS and the applying central securities depository, the commission under para. 1 considers the application of the candidate and the documents attached to it, and the Bulgarian National Bank gives a response to the candidate within a period of up to three months from the receipt of all necessary documents.

4 Ordinance No. 5 of the BNB (8) After submission of the necessary documents and the conduct of successful tests to establish the technical readiness of the participant for communication with ESROTS via SWIFT and/or the web-based interface of ESROTS using QES, an agreement for participation in ESROTS is signed between the BNB and the participant in a form approved by the BNB. If necessary, participants in ESROTS under Art. 3, para. 1, items 5, 6, 7 and 8 sign specific participation agreements depending on the nature of the services used. (9) The Bulgarian National Bank refuses access to a candidate for participation in ESROTS only by providing written motivation and based on a comprehensive risk assessment. (10) The Bulgarian National Bank maintains an up-to-date list of participants in ESROTS on its official internet page. (11) Documents under this Ordinance issued in a foreign language are submitted in the original and accompanied by a certified translation into Bulgarian, and the provided official documents must also be legalized in accordance with the requirements of the current legislation. (12) Participants notify the BNB of changes in the circumstances under this article on the day the respective change occurs.

Art. 6. (1) Participation in ESROTS is terminated unilaterally by the BNB in cases when:

1. the license of a participant in ESROTS is revoked or insolvency proceedings are opened;
2. a decision is taken by the competent authority of the participant for its termination;
3. the participant in ESROTS is transformed through merger or absorption with another participant in the system;
4. measures restricting the provision of investment services and activities are imposed on a participant in cases provided by law. (2) The Bulgarian National Bank may temporarily restrict access to ESROTS or terminate it entirely when it establishes that a participant has ceased to meet the requirements for participation in the system, does not fulfill its obligations, or in cases provided by law, measures restricting its activities entirely or partially are imposed on it. (3) In the cases under para. 1, the GS owned by the participant and in total by its clients, including those with encumbrances, are transferred ex officio to another participant – a sub-depository of GS determined by the Ministry of Finance in coordination with the BNB. (4) In the cases under para. 1, for GS owned by a participant under Art. 3, para. 1, items 1, 2, 3, 4 and 8 and in total by its clients, registered in central securities depositories of Member States, the rules and procedures in case of non-performance by a participant of the respective central securities depository shall apply. (5) In the cases under para. 2, at the discretion of the BNB, coordinated with the Ministry of Finance, the GS owned by the participant and/or in total by its clients, including those with encumbrances, may be transferred ex officio to another participant – a sub-depository of GS determined by the Ministry of Finance in coordination with the BNB. (6) Participation in ESROTS may be terminated at the request of the participant with one month's notice. During the notice period, the participant is obliged to transfer the management of the GS owned by it and its clients to another participant in ESROTS. Pre-agreed transactions whose value date coincides with or is after the date on which its participation is terminated are not registered by ESROTS. (7) The taking of measures to prevent or crisis management measures within the meaning of the Act on the Recovery and Restructuring of Credit Institutions and Investment Intermediaries with regard to a participant in ESROTS is not an independent ground to accept that the participant does not meet the requirements for participation in the system or does not fulfill its obligations under the participation agreement in ESROTS, and in this respect this circumstance does not constitute a reason for temporary or complete termination of participation in ESROTS.

Chapter Two ACQUISITION OF GOVERNMENT SECURITIES ON THE PRIMARY MARKET

Art. 7. (1) On the primary market, GS are acquired through auctions organized and conducted by the BNB through ADCTS. (2) Participants in ADCTS may be the primary dealers of GS chosen by the Ministry of Finance in accordance with Ordinance No. 15 of 2007, who have technical communication means for sending orders for participation in auctions and receiving notifications from the BNB. Technical communication means that may be used are: SWIFT and the web-based interface of ADCTS when using QES. Other technical means may be used only after the MoF and BNB notify participants that they are ready for their implementation. (3) Primary dealers are admitted to participation in ADCTS by a commission determined by the Deputy Governor of the BNB heading the "Banking" Directorate, which includes three permanent and three reserve members. (4) Based on the officially published list of selected primary dealers by the Ministry of Finance, the commission under para. 3 organizes the conduct of tests with each primary dealer to establish their technical readiness for submitting orders in accordance with the rules of the system and admits the respective primary dealer to participation in ADCTS after successful conduct of the tests, ensuring access for persons authorized by them to submit orders. For primary dealers who have been participants in ADCTS, new tests may not be conducted. (5) If necessary, participants in ADCTS participate in tests related to the development and improvement of the system, for which the MoF and BNB notify them in advance. (6) Participation in ADCTS is terminated unilaterally by the BNB in cases when:

1. by decision of the Minister of Finance, the participant in ADCTS is excluded from the list of primary dealers – as of the date indicated in the decision;
2. participation in ESROTS is terminated in accordance with Art. 6;
3. the tests under para. 5 are not successfully conducted. (7) The Bulgarian National Bank maintains an up-to-date list of participants in ADCTS on its official internet page.

Art. 8. (1) The Bulgarian National Bank conducts auctions for GS on Mondays. By decision of the Minister of Finance, the BNB may conduct auctions on other days of the week. (2) When the day determined under para. 1 is not a working day, the auction is conducted on the next working day. (3) By decision of the Minister of Finance, the BNB may organize extraordinary auctions, in which only primary dealers specified in the decision may participate. After receiving the message from the Ministry of Finance, the BNB notifies primary dealers of the conditions of the extraordinary auction. (4) On the primary market, GS may also be acquired in other ways determined by the Minister of Finance in accordance with current legislation.

Art. 9. (1) Only primary dealers – participants in ADCTS may participate in auctions. (2) Primary dealers may participate in auctions with competitive orders, using forms in accordance with the respective appendices to the Ordinance. (3) Primary dealers may participate with competitive orders both in their own name and for their own account, as well as in their own name but for the account of their clients. (4) By decision of the Ministry of Finance, primary dealers may also participate with non-competitive orders both in their own name and for their own account, as well as in their own name but for the account of their clients who are not banks or investment intermediaries, including those established in a Member State or a third country. (5) Auctions are conducted by the commission under Art. 7, para. 3 at the BNB.

Art. 10. (1) In the auctions under Art. 8, primary dealers may also participate with orders for the replacement of GS owned by them, bought back without a fixed term in accordance with Art. 41, para. 1. (2) Orders for participation are competitive and are made in accordance with Art. 12, para. 1 and 2. (3) The aggregate nominal value of each submitted order should be equal to the aggregate nominal value of the order submitted for buyback through replacement in accordance with Art. 41, para. 1.

Art. 11. (1) No later than three working days before the conduct of each auction, the BNB notifies participants in ADCTS of the information received from the Ministry of Finance regarding: the issue number of GS (ISIN); the offered quantity; the currency of issuance; the interest rate for the respective period, if they are interest-bearing; the dates for the payment of interest and the nominal value; the change, if any, in the ratio of GS offered for competitive and non-competitive orders; the change, if any, in the maximum quantity of GS that one participant with competitive orders may acquire (including when participating in their own name but for the account of their clients), as well as the deadlines for the payment of GS, if they are different from those under Art. 14, para. 3. (2) When primary dealers participate in the auction with non-competitive orders on the basis of Art. 9, para. 4, the ratio of GS offered for competitive and non-competitive orders is 80 percent to 20 percent of the total offered quantity. (3) The maximum quantity of GS that one participant may acquire (including when participating in their own name but for the account of their clients) with competitive orders is:

1. for short-term GS – 15 percent of the quantity intended for sale through competitive orders;
2. for medium-term GS – 35 percent of the quantity intended for sale through competitive orders;
3. for long-term GS – 50 percent of the quantity intended for sale through competitive orders. (4) When submitting the information under para. 1, the Minister of Finance may determine other ratios different from those indicated in para. 2 and 3.

Art. 12. (1) Primary dealers submit their orders for participation in an auction for GS within a period until 10:00 on the day of the auction. Orders are sent to the BNB, "Fiscal Services" Directorate. Received orders are immediately subjected to incoming verification, including verification of their format according to the appendices to the Ordinance, verification of keywords identifying the respective requisites, and verification of the date and time of receipt. In case an error is found, a message is sent to the primary dealer. Submitted orders may be changed by primary dealers until the deadline for their receipt expires, after which they are irrevocable. The last message is considered valid. (2) The order for participation is prepared using the form according to Appendices No. 4, 5, 6, 7, 8 and 9 and must contain:

1. the number of the TARGET2-Securities special monetary account of the participant in TARGET;
2. the issue number of the GS for which the order is made, and in the cases under Art. 10, para. 1 – also the issue number of the GS that are bought back through replacement in accordance with Art. 41, para. 1;
3. the nominal value of the order (in figures);
4. the price/yield at which the participant wishes to acquire GS, expressed as a percentage of 100 units of nominal value with two decimal places (in figures). (3) In case the order is submitted for the account of a client of the primary dealer, in addition to the requisites under para. 2, it must contain data on the client for whose account the order is submitted: for natural persons – the three names and EGN; for legal entities and sole traders – the company name, identification code by the BULSTAT register. (4) In case the order is submitted for the account of a foreign person, when filling out the documents indicated in the appendices to the Ordinance, the following data are indicated:
5. for a foreign citizen – the names according to the identity document, type, series and number of the identity document, as well as in which country it was issued;
6. for a legal entity registered abroad – the company name, seat, number and date of registration, the register in which they are entered, etc. (5) Non-competitive orders do not indicate a price or yield. They are determined in accordance with Art. 14, para. 5, item 2. The aggregate nominal value of one non-competitive order must be at least 50 euros and be a multiple of 1 euro for GS. The total size of non-competitive orders submitted by one primary dealer may not exceed the determined quantity according to Art. 11. In case the condition is not observed, the orders of the respective primary dealer are not admitted to the ranking of the auction. (6) In one auction, each participant may submit up to 30 competitive orders, including orders in their own name but for the account of their clients. The aggregate nominal value of one competitive order must be at least 1000 euros and be a multiple of 1 euro. (7) Received orders under para. 1 are stored in a manner that ensures the preservation of the confidentiality of the proposals made until the conduct of the auction.

Art. 13. (1) On the day of the auction, the commission under Art. 7, para. 3 conducts verification and does not admit to participation in the auction orders that do not meet the requirements of this Ordinance. (2) The commission under Art. 7, para. 3 ranks the admitted competitive orders for participation in the auction in descending order according to the price proposed by the participants or in ascending order according to the yield proposed by the participants within the maximum quantity of GS that one participant may acquire according to Art. 11. For orders with the same price, accepted as the minimum by the Ministry of Finance, or with the same yield, accepted as the maximum by the Ministry of Finance, the distribution is carried out on a proportional basis through a coefficient