Ordinance No. 72 of 12.07.2022 on Information and Documents Proving Compliance with Requirements for Temporary and Extraordinary Managers of Investment Intermediaries and Conditions for Selecting Independent Valuers

ORDINANCE No. 72 of 12.07.2022 on the information and documents by which compliance with the requirements for the temporary and extraordinary manager of an investment intermediary is proven, as well as on the conditions and procedure for the selection of independent valuers

Pub. - State Gazette, No. 57 of 22.07.2022; amended, No. 20 of 11.03.2025, effective from the date of introduction of the euro in the Republic of Bulgaria

Adopted by Decision No. 240-N of 12.07.2022 of the Financial Supervision Commission

Chapter One GENERAL PROVISIONS

Art. 1. This Ordinance determines:

1. the information and documents by which compliance with the requirements for the appointment of a temporary and extraordinary manager of an investment intermediary under Art. 1, para. 1, item 2 of the Law on Recovery and Restructuring of Credit Institutions and Investment Intermediaries (LRCIIP) is proven when applying early intervention measures and restructuring under the same law;
2. the conditions and procedure for the selection of independent valuers for the purposes of Art. 55 and 106 of the LRCIIP by the Financial Supervision Commission (the Commission).

Chapter Two INFORMATION AND DOCUMENTS BY WHICH COMPLIANCE WITH THE REQUIREMENTS FOR THE TEMPORARY AND EXTRAORDINARY MANAGER OF AN INVESTMENT INTERMEDIARY IS PROVEN

Art. 2. The information and documents by which compliance with the requirements for a temporary manager under Art. 46, para. 2 of the LRCIIP is proven by the respective person are:

1. the name, unique civil registration number (UCRN), registered address, correspondence address, if different from the registered address, telephone number, and email address for contact, respectively, analogous data for foreign persons;
2. a declaration on the existence of a prior reputation assessment of the person in their capacity as a person acquiring or increasing a qualifying holding or participating in the management of an investment intermediary, credit institution, insurer, reinsurer, alternative investment fund manager, or management company; data on the competent authority that carried out the assessment and the result thereof; in cases where the person has a reasoned written decision of the competent authority that carried out the assessment, a copy of the decision is submitted instead of the declaration;
3. recommendations/references regarding the person's reputation and experience, including contact information for the reference persons;
4. information and documents certifying the person's qualifications and professional experience: a) a curriculum vitae indicating the respective education and professional training, professional experience, including the names of all organizations for which the person works or has worked, and the nature and duration of the functions exercised, in particular for all activities falling within the scope of the desired position; for positions held in the last 10 years, the description of the respective activities must detail all powers of the person and the area of operations under their control; b) data on the series and number of the higher education diploma held; for a higher education diploma issued in the Republic of Bulgaria before 1.01.2012, a notarized copy must be presented; for a diploma not issued by a higher education institution in the Republic of Bulgaria, the number of the certificate of recognition of the acquired higher education, entered in the register for academic recognition kept by the National Centre for Information and Documentation, must be indicated, or a certified copy of the certificate must be submitted; c) certified copies of the employment record book, job descriptions, and other documents certifying the qualifications and professional experience necessary for the management of the investment intermediary's activities in accordance with the specifics of the activities carried out by the investment intermediary, the main risks to which it is exposed or may be exposed, and the requirements of Art. 13, para. 3 of the Law on Markets in Financial Instruments (LMFI);
5. a certificate of no criminal record or another analogous document - for persons who are not Bulgarian citizens, while for Bulgarian citizens, the absence of a conviction is established ex officio;
6. a completed questionnaire-declaration on reliability and suitability according to the appendix to this Ordinance;
7. a declaration by the person that they have not been a member of a management or supervisory body or an unlimited liability partner in a company for which insolvency proceedings have been opened, or in a company terminated due to insolvency if creditors remain unsatisfied;
8. a declaration by the person that they have not been declared insolvent and are not undergoing proceedings for a declaration of insolvency;
9. a declaration by the person that they are not deprived of the right to hold a position of material responsibility or to carry out professional activity;
10. a declaration by the person whether they are a member of a management or supervisory body, or otherwise participate in the management of or have a qualifying holding in another investment intermediary, management company, alternative investment fund manager, credit institution, insurer, or reinsurer from a Member State, as well as data on such participation and the regulatory authority exercising supervision;
11. a declaration by the person that they have not, in the last 2 years prior to the act of the respective competent authority, been a member of a management or supervisory body of a company whose license to carry out activities subject to licensing by the Commission or the Bulgarian National Bank, or by a respective authority of another country, was withdrawn, except in cases where the license was withdrawn at the request of the company, or when the act withdrawing the issued license was annulled in due course, or when more than 5 years have passed since the entry into force of the act withdrawing the license, with the existence of such cases being declared;
12. a declaration by the person that no final administrative penalties have been imposed on them in the last 5 years for a gross or systematic violation of the LMFI, the Law on Public Offering of Securities (LPOS), the repealed Law on Companies with Special Investment Purpose (LSIP), the Law on Companies with Special Investment Purpose and Securitization Companies (LSIPSC), the Law on the Activity of Collective Investment Schemes and Other Collective Investment Undertakings (LACISOCIU), LRCIIP, the Law on Implementing Measures Against Market Abuse with Financial Instruments (LIMAMFI), the Law on Credit Institutions (LCI), the Insurance Code (IC), the Social Security Code (SSC), Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ, L 173/1 of 12 June 2014), Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on prudential requirements for investment intermediaries and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No 600/2014 and (EU) No 806/2014 (OJ, L 314/1 of 5 December 2019), Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012 (OJ, L 176/1 of 27 June 2013), Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ, L 173/84 of 12 June 2014) or the implementing acts thereof, or the respective legislation of another country;
13. a declaration by the person that they have not been dismissed from a management or supervisory body of a company under the LMFI, LPOS, LACISOCIU, LCI, IC, SSC, the repealed LSIP, LSIPSC, or the respective legislation of another country based on an applied compulsory administrative measure, except in cases where the act was annulled in due course, with the person declaring the existence of this circumstance;
14. a declaration by the person that there are no relationships that give rise to reasonable doubts about the impartiality of the person, including: a) no commercial, financial, business, or other private interests in the investment intermediary in which they are appointed, in persons connected with it or its debtors, as well as in other subsidiary companies of the parent undertaking of the investment intermediary in which they are appointed, if it is part of a group; b) they do not hold a position with managerial functions in the investment intermediary in which they are appointed, or in persons connected with it;
15. a declaration by the person that they are ready to assume the functions of a temporary manager in a timely manner and can dedicate sufficient time to the performance of their duties in the management of the investment intermediary in which they are appointed.

Art. 3. The information and documents by which compliance with the requirements for an extraordinary manager under Art. 54, para. 2 of the LRCIIP is proven by the respective person are:

1. the information and documents under Art. 2;
2. a declaration by the person that they are not a spouse, relative by blood or affinity up to the sixth degree or by affinity up to the third degree of a member of the management body of the investment intermediary in which they will be appointed.

Art. 4. An interview may be conducted with a person who has expressed interest in being appointed as a temporary or extraordinary manager and/or additional documents, including recommendations, may be requested, in case the documents submitted do not provide a full picture of the person's qualifications, abilities, and knowledge or of their reliability and suitability.

Art. 5. (1) A person who meets the requirements under Art. 46, para. 2 of the LRCIIP, respectively under Art. 54, para. 2 of the LRCIIP, may submit an application of interest to the Commission to be appointed as a temporary manager, respectively extraordinary manager, to which they attach the information and documents under Art. 2, items 1 - 13, respectively Art. 3, item 1 in conjunction with Art. 2, items 1 - 13. (2) The Commission, upon the proposal of the Commission member under Art. 3, item 5 of the Law on the Financial Supervision Commission (LFSC), approves the form of the application under para. 1. (3) The Commission keeps a register of the persons under para. 1, which is not public. The persons under the first sentence notify the Commission in cases where the interest declared by them has ceased. (4) The Commission refuses to enter a person in the register under para. 3 or deletes them ex officio when it establishes that the person does not meet the applicable requirements.

Art. 6. (1) The Commission, upon the proposal of the Commission member under Art. 3, item 5 of the LFSC, may appoint one or several persons as a temporary manager, respectively extraordinary manager. (2) Before taking a decision to appoint a person as a temporary or extraordinary manager, the Commission requires the person to submit current documents and information proving compliance with the respective requirements. (3) The requirement under para. 2 also applies when a temporary manager appointed under the conditions of Art. 46, para. 1 of the LRCIIP, respectively a curator appointed under the conditions of Art. 286, para. 2 of the LMFI, is appointed as an extraordinary manager in the same investment intermediary in which they have so far been appointed as a temporary manager, respectively curator.

Chapter Three CONDITIONS AND PROCEDURE FOR THE SELECTION OF INDEPENDENT VALUERS

Art. 7. For the purpose of carrying out an assessment under Art. 55, para. 1 or Art. 106, para. 1 of the LRCIIP, a person is selected who meets at least the following requirements:

1. the person is an independent valuer within the meaning of Art. 5 of the Law on Independent Valuers (LIV) and possesses the corresponding legal capacity according to the LIV;
2. the person meets the requirements of Chapter IV of Commission Delegated Regulation (EU) 2016/1075 of 23 March 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regulatory technical standards for determining the content of recovery plans, resolution plans, and group resolution plans, the minimum criteria on which the competent authority must assess resolution plans and group resolution plans, conditions for intra-group financial support, requirements for independent valuers, contractual recognition of write-down and conversion powers, requirements for notification procedures and the content of notifications and the stop-loss notice, as well as the operational functioning of resolution colleges (OJ, L 184/1 of 8 July 2016).

Art. 8. (1) The Commission, upon the proposal of the Commission member under Art. 3, item 5 of the LFSC, takes a decision on the selection of an independent valuer to carry out an assessment under Art. 55, para. 1 or Art. 106, para. 1 of the LRCIIP and publishes a notice on the selection of an independent valuer on its website. (2) The notice under para. 1 contains:

1. information on the assessment to be carried out by the independent valuer;
2. the requirements for candidates for independent valuer and the indication of the information and documents by which compliance with the requirements is proven;
3. rules for conducting the selection of an independent valuer, including criteria for its selection;
4. deadline for submission of proposals by candidates and deadline for their consideration;
5. other information at the Commission's discretion. (3) The Commission member under Art. 3, item 5 of the LFSC, assisted by the unit under Art. 3, para. 2 of the LRCIIP, considers the proposals received and proposes to the Commission to take the respective decision in accordance with the rules for conducting the selection of an independent valuer. (4) The Commission's decision under para. 3 is not subject to appeal. (5) The carrying out of the assessment is entrusted to the independent valuer by a contract, which for the Commission is signed by the Chairman of the Commission or a person authorized by him and by the independent valuer - directly as a natural person or through a company of independent valuers. (6) The assessment is carried out at the expense of the investment intermediary under Art. 1, para. 1, item 2, respectively the company under Art. 1, para. 1, items 3 - 5 of the LRCIIP. (7) The Commission may at any time take a decision to terminate the contract with the independent valuer, such decision not being subject to appeal. With the decision under the first sentence, the Commission initiates a new selection of an independent valuer, with paras. 1 - 6 applying mutatis mutandis.

ADDITIONAL PROVISIONS

§ 1. For the purposes of this Ordinance:

1. "Group" is a concept within the meaning of § 1, para. 1, item 26 of the Additional Provisions of the LMFI.
2. "Positions with managerial functions" are members of the management and supervisory bodies of a legal entity and "senior management," which is a concept within the meaning of § 1, para. 1, item 28 of the Additional Provisions of the LMFI.
3. "Connected person" is a concept within the meaning of § 1, para. 1, item 27 of the Additional Provisions of the LMFI.

§ 2. Applications and notifications under this Ordinance are submitted in Bulgarian.

§ 3. All documents in a language other than Bulgarian submitted in accordance with this Ordinance must be accompanied by a translation into Bulgarian, carried out by an agency authorized by the Ministry of Foreign Affairs of the Republic of Bulgaria or by a consular or diplomatic officer in the country of origin of the document, and the submitted official documents must also be legalized, where applicable. Separate private documents of essential importance for the assessment regarding compliance with the requirements of this Ordinance may be required with a notarized certification of the signatures of the persons who issued them.

FINAL PROVISION

§ 4. This Ordinance is issued on the basis of Art. 46, para. 3, Art. 54, para. 2, and Art. 55a of the Law on Recovery and Restructuring of Credit Institutions and Investment Intermediaries and is adopted by Decision No. 240-N of 12.07.2022 of the Financial Supervision Commission.

Chairman: Boyko Atanasov

Appendix to Art. 2, item 6 (Amended - State Gazette, No. 20 of 2025, effective from the date of introduction of the euro in the Republic of Bulgaria)

QUESTIONNAIRE-DECLARATION on the reliability and suitability of the temporary and extraordinary manager

1. Personal Data 1.1. Full Name __________________________________ 1.2. UCRN/LNCH __________________________________ 1.3. Nationality __________________________________ 1.4. Date of Birth __________________________________ (dd/mm/yyyy): 1.5. Place of Birth __________________________________ 1.6. Permanent Address __________________________________ 1.7. Current Address __________________________________ 1.8. Telephone Number __________________________________ 1.9. E-mail __________________________________ 1.10. Has your name been changed? __________________________________ Yes No

(If "Yes" - complete information in items 1.10.1 - 1.10.3.) 1.10.1. Previous Name __________________________________ 1.10.2. Date of Change (dd/mm/yyyy) __________________________________ 1.10.3. Reason for the Change __________________________________

2. Education and Professional Qualification 2.1. Education Educational Institution Acquired Educational and Qualification Degree and Specialization Period of Study (from - to) (If necessary, add additional fields.)

2.2. Professional Qualification Organization Issuing the Qualification Certificate Acquired Qualification Period of Study (from - to) (If necessary, add additional fields.)

2.3. Foreign Language Proficiency Language Level of Proficiency (If proficient in more than 2 foreign languages, add additional fields.)

• Level of foreign language proficiency according to the Common European Framework of Reference for Languages.

3. Professional Experience Place of Work Position Held Period Address

Tel. number/e-mail for references Previous Place of Work Position Held Period Tel. number/e-mail for references Previous Place of Work Position Held Period Tel. number/e-mail for references

4. Information on Companies in Which the Person under Item 1.1 Owns or Has Owned a Qualifying Shareholding in the Capital in the Last 5 Years 4.1. Name and EIK of the Company/Companies, registered office, and management address:

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4.2. Percentage of shareholding in the capital, number of shares/shares, and total nominal value in euros: Share (%) Number of Shares/Shares Total Nominal Value (euros)

4.3. Date of Acquisition of the Shareholding (dd/mm/yyyy):

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4.4. Date of Change (dd/mm/yyyy):

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4.5. Is compulsory execution being conducted/has it been conducted against the Company/Companies at the moment? Yes No (If "Yes" is selected, specify which company; the type and amount of the debt; the reasons leading to compulsory execution, and how the compulsory execution ended.)

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4.6. Have seizures, attachments, or other enforcement measures been imposed/have they been imposed on the Company/Companies at the moment? Yes No (If "Yes" is selected, specify which company, what measures were imposed, and for what debts.)

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4.7. Was the Company terminated due to insolvency or is it currently undergoing insolvency proceedings? Yes No (If "Yes" is selected, specify which company, the number and date of the decision to close the insolvency proceedings and delete the company, respectively the number and date of the decision with which the insolvency proceedings were initiated.)

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(For additional information, continue the list.)

5. Information on Companies Over Which the Person under Item 1.1 Exercises or Has Exercised Control in the Last 5 Years 5.1. Name and EIK of the Company/Companies, registered office, and management address:

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5.2. Method of exercising control over the Company/Companies:

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5.3. Start Date from which control is exercised (dd/mm/yyyy):

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5.4. Date of Change (dd/mm/yyyy):

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5.5. Is compulsory execution being conducted/has it been conducted against the Company/Companies at the moment? Yes No (If "Yes" is selected, specify which company; the type and amount of the debt; the reasons leading to compulsory execution, and how the compulsory execution ended.)

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5.6. Have seizures, attachments, or other enforcement measures been imposed/have they been imposed on the Company/Companies at the moment? Yes No (If "Yes" is selected, specify which company, what measures were imposed, and for what debts.)

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5.7. Was the Company terminated due to insolvency or is it currently undergoing insolvency proceedings? Yes No (If "Yes" is selected, specify which company, the number and date of the decision to close the insolvency proceedings and delete the company, respectively the number and date of the decision with which the insolvency proceedings were initiated.)

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(For additional information, continue the list.)

6. Relationships with Competent Authorities 6.1. Have administrative penalties or compulsory administrative measures been imposed for violation of legislative and sub-legislative normative acts applicable to the activities of enterprises in the financial sector, on you or on a company: a) in which you held a position with managerial functions; b) over which you exercise or have exercised control; c) in which you own or have owned a qualifying shareholding, since the activities of such a company contradict the law or it pursues goals prohibited by law? Yes No (If "Yes" is selected, specify the name and EIK of the company; the position held, respectively the method of exercising control, percentage of qualifying shareholding owned; the legal provisions that were violated, the date and number of the act imposing the penalty or measure, and the authority that issued it.)

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6.2. Are you aware of pending proceedings for the imposition of administrative penalties or compulsory administrative measures under item 6.1? Yes No (If "Yes" is selected, specify the name and EIK of the company; the position held, respectively the method of exercising control, percentage of qualifying shareholding owned; the legal provisions that were violated, the date of initiation of the proceedings; the authority that initiated it.)

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6.3. Has a company been terminated by court decision: a) in which you held a position with managerial functions; b) over which you exercise or have exercised control; c) in which you own or have owned a qualifying shareholding, since the activities of such a company contradict the law or it pursues goals prohibited by law? Yes No (If "Yes" is selected, specify the name and EIK of the company; the position held, respectively the method of exercising control, percentage of qualifying shareholding owned; the number and date of the decision)