Ordinance No. 9 of 19.11.2003 on Valuing Pension Insurance Assets and Liabilities, Calculating Net Asset Value and Share Value, and Maintaining Individual and PEPP Accounts

Ordinance No. 9 of 19.11.2003 on the valuation of assets and liabilities of the pension insurance company and of the funds managed by it, on calculating the value of net assets, of a single share and of the return on investments, and on maintaining individual accounts, accounts for the Pan-European Personal Pension Product (PEPP) and analytical accounts in a deferred payment fund (Title amended - State Gazette, No. 94 of 2018, effective 19.11.2018; amended, No. 59 of 2021; amended, No. 70 of 2024) Published - State Gazette, No. 109 of 16.12.2003; effective from 01.07.2004; amended and supplemented, No. 34 of 27.04.2004; No. 57 of 12.07.2005; No. 32 of 18.04.2006; No. 86 of 24.10.2006; amended and supplemented, No. 39 of 15.05.2007, effective from 19.05.2007; amended and supplemented, No. 28 of 14.04.2009; amended and supplemented, No. 74 of 15.09.2009, effective from 19.09.2009; amended, No. 107 of 13.12.2013, effective from 01.01.2014; amended and supplemented, No. 94 of 13.11.2018, effective from 19.11.2018; amended and supplemented, No. 59 of 16.07.2021; amended and supplemented, No. 70 of 20.08.2024; amended, No. 20 of 11.03.2025, effective from the date of introduction of the euro in the Republic of Bulgaria Issued by the Financial Supervision Commission

Chapter I General Provisions Art. 1. (Supplemented - State Gazette, No. 94 of 2018, effective 19.11.2018; amended and supplemented, No. 59 of 2021; amended and supplemented, No. 70 of 2024.) This Ordinance regulates:

1. (amended - State Gazette, No. 59 of 2021; amended, No. 70 of 2024) the method and procedure for valuing the assets and liabilities of a supplementary pension fund and a payment fund, as well as determining the net asset value of the respective fund and the net asset value of assets in sub-funds of a voluntary pension fund for PEPP;
2. the method and procedure for valuing the assets and liabilities of a pension insurance company;
3. (amended - State Gazette, No. 59 of 2021) the obligations of a pension insurance company regarding the valuation of assets and liabilities of managed funds and its own assets and liabilities;
4. (supplemented - State Gazette, No. 70 of 2024) the calculation and publication of the value of a single share of a supplementary mandatory pension fund, a supplementary voluntary pension fund, and a supplementary voluntary pension fund under occupational schemes;
5. (new - State Gazette, No. 70 of 2024) the calculation and publication of the value of a single share in sub-funds of a voluntary pension fund for PEPP;
6. (previous item 5, amended - State Gazette, No. 70 of 2024) the requirements for maintaining individual accounts of insured persons in a supplementary mandatory pension fund, a supplementary voluntary pension fund, and a supplementary voluntary pension fund under occupational schemes;
7. (new - State Gazette, No. 70 of 2024) the requirements for maintaining PEPP accounts in a voluntary pension fund for PEPP;
8. (new - State Gazette, No. 59 of 2021; previous item 6, No. 70 of 2024) the requirements for maintaining analytical accounts of persons in a deferred payment fund;
9. (new - State Gazette, No. 94 of 2018, effective 19.11.2018; previous item 6, No. 59 of 2021; previous item 7, amended, No. 70 of 2024) the method and procedure for calculating and comparing the return on investments with the return from fund management under item 4, respectively sub-fund under item 5, in accordance with Art. 180v of the Social Insurance Code.

Chapter II Valuation of Assets and Liabilities of a Supplementary Pension Fund and a Payment Fund. Determination of Net Asset Value of Funds and Net Asset Value of Assets in Sub-funds of the Voluntary Pension Fund for PEPP (Title amended - State Gazette, No. 59 of 2021; amended, No. 70 of 2024) Art. 2. (Amended and supplemented - State Gazette, No. 59 of 2021; supplemented, No. 70 of 2024.) (1) (Previous text of Art. 2 - State Gazette, No. 59 of 2021.) The valuation of assets and liabilities of a supplementary pension fund is carried out every working day by the pension insurance company managing it, based on:

1. (supplemented - State Gazette, No. 70 of 2024) information from the custodian bank, respectively the depositary under Art. 214a, para. 4 of the Social Insurance Code, on all completed transactions with the fund's assets for the previous working day;
2. accounting of the fund's liabilities and transactions with its assets for the previous working day;
3. (amended - State Gazette, No. 32 of 2006) information on market prices of the fund's assets for the previous working day;
4. determination of the fair value of assets without market prices by applying relevant applicable methods. (2) (New - State Gazette, No. 59 of 2021.) The valuation of assets and liabilities of a payment fund is carried out by the pension insurance company managing it at the end of each month on the first working day of the following month, except for the valuation at the end of December, which is carried out by the fifth working day of the following month, based on:
5. information from the custodian bank on all completed transactions with the fund's assets for the last working day of the previous month;
6. accounting of the fund's liabilities and transactions with its assets for the last working day of the previous month;
7. information on market prices of the fund's assets for the last working day of the previous month;
8. determination of the fair value of assets for which market prices do not apply, by using relevant applicable methods.

Art. 3. (Amended and supplemented - State Gazette, No. 39 of 2007, effective 19.05.2007; amended and supplemented, No. 94 of 2018, effective 19.11.2018; amended and supplemented, No. 59 of 2021.) (1) (Previous text of Art. 3, amended and supplemented - State Gazette, No. 39 of 2007, effective 19.05.2007; amended, No. 59 of 2021.) The valuation of financial assets of a fund under Art. 1, item 1 is carried out:

1. (amended - State Gazette, No. 39 of 2007, effective 01.01.2008) upon initial acquisition (recognition) - at acquisition price;
2. (amended - State Gazette, No. 57 of 2005) upon subsequent valuation - according to the respective procedure and method defined in this Ordinance.
3. (new - State Gazette, No. 39 of 2007, effective 19.05.2007; amended, No. 94 of 2018, effective 19.11.2018) if the procedure and methods for valuation under this Ordinance cannot be applied, subsequent valuation may be carried out in compliance with the principle of prudence using properly and thoroughly motivated and documented methods that are generally recognized on financial markets.
4. (new - State Gazette, No. 39 of 2007, effective 19.05.2007) As an exception, when the valuation obtained under this Ordinance clearly contradicts the principle of prudence, the pension insurance company may use the price determined for the previous working day according to this Ordinance. (2) (New - State Gazette, No. 94 of 2018, effective 19.11.2018; amended, No. 59 of 2021.) When a financial asset of a pension insurance company or a fund under Art. 1, item 1 is admitted to trading on more than one regulated market, respectively an official stock exchange market or another organized market in a third country, on the day of acquisition of the respective asset, the company designates one of these markets as the primary market in accordance with International Financial Reporting Standards requirements and reviews it annually, as well as when a change is necessary. When carrying out subsequent valuation under Art. 5b, para. 1 and 2, Art. 6, para. 1, 2 and 5, Art. 7, para. 3 and 6, Art. 10a, para. 1 and 2, the pension insurance company uses data exclusively from that market. (3) (New - State Gazette, No. 39 of 2007, effective 19.05.2007; previous para. 2, amended, No. 94 of 2018, effective 19.11.2018; supplemented, No. 59 of 2021.) In the cases under para. 1, items 3 and 4, the pension insurance company informs the Financial Supervision Commission, hereinafter referred to as "the Commission", within the period under Art. 23, para. 1, respectively Art. 23, para. 2, of the reasons and the procedure and method of carrying out the valuation.

Art. 4. (Amended and supplemented - State Gazette, No. 57 of 2005; amended, No. 94 of 2018, effective 19.11.2018; amended, No. 59 of 2021; amended and supplemented, No. 70 of 2024.) (1) (Previous text of Art. 4 - State Gazette, No. 70 of 2024.) The valuation under Art. 3, para. 1, item 2 of financial assets of a fund under Art. 1, item 1, hereinafter referred to as "subsequent valuation", is carried out for each financial instrument, including those initially recognized as of the valuation date. (2) (New - State Gazette, No. 70 of 2024.) When the same asset is present in several or all sub-funds of a voluntary pension fund for PEPP, the pension insurance company determines the same valuation of that asset for calculating the asset value in each sub-fund for the respective working day according to this Chapter.

Art. 5. (Amended - State Gazette, No. 57 of 2005; amended, No. 39 of 2007, effective 19.05.2007; entirely amended, No. 94 of 2018, effective 19.11.2018; amended and supplemented, No. 59 of 2021.) (1) (Amended and supplemented - State Gazette, No. 59 of 2021.) Subsequent valuation of government securities owned by a supplementary pension fund, issued and admitted to trading on a regulated market in the country, is carried out at the last price of a transaction concluded with them for the previous working day (day "T"), published in the stock exchange bulletin, to which the accrued coupon interest for the day to which the valuation refers, published in the bulletin on day "T-2", is added. (2) If a price cannot be determined under para. 1, subsequent valuation is carried out at the last "bid" price for the previous working day (day "T"), published in the stock exchange bulletin, to which the accrued coupon interest for the day to which the valuation refers, published in the bulletin on day "T-2", is added. (3) If the valuation methods under para. 1 and 2 cannot be applied, subsequent valuation is carried out at the average price of each issue for the previous working day on the secondary interbank market. The average price of an issue is formed as the arithmetic mean of the "bid" and "ask" prices published by no fewer than three primary dealers in government securities, determined in the manner specified in the rules under Art. 17. (4) If the valuation methods under para. 1, 2 and 3 cannot be applied, the comparable prices method for securities with similar payment terms, maturity and rating, or other generally accepted methods defined in the rules under Art. 17, is used.

Art. 5a. (New - State Gazette, No. 94 of 2018, effective 19.11.2018; supplemented, No. 59 of 2021.) Subsequent valuation of government securities owned by a supplementary pension fund, issued in the country but not admitted to trading on a regulated market, is carried out according to Art. 5, para. 3 and 4.

Art. 5b. (New - State Gazette, No. 94 of 2018, effective 19.11.2018; supplemented, No. 59 of 2021.) (1) (Supplemented - State Gazette, No. 59 of 2021.) Subsequent valuation of debt securities owned by a supplementary pension fund, admitted to trading on a regulated market, is carried out at the last price of a transaction concluded with them for the previous working day, published in a stock exchange bulletin or electronic system for financial instrument price information. When a net price is published, subsequent valuation is carried out by adding the accrued coupon interest to the date to which the valuation refers. (2) If a price cannot be determined under para. 1, subsequent valuation is carried out at the last "bid" price for the previous working day, published in a stock exchange bulletin or electronic system for financial instrument price information. When a net price is published, subsequent valuation is carried out by adding the accrued coupon interest to the date to which the valuation refers. (3) If the valuation methods under para. 1 and 2 cannot be applied, the comparable prices method for securities with similar payment terms, maturity and rating, or other generally accepted methods defined in the rules under Art. 17, is used.

Art. 5v. (New - State Gazette, No. 94 of 2018, effective 19.11.2018; supplemented, No. 59 of 2021.) Except for securities under Art. 5a, subsequent valuation of debt securities owned by a supplementary pension fund, not admitted to trading on a regulated market, is carried out using the discounted cash flow method or another suitable method specified in the rules under Art. 17.

Art. 5v1. (New - State Gazette, No. 59 of 2021.) (1) Subsequent valuation of debt securities under Art. 176, para. 1, item 1 of the Social Insurance Code owned by a payment fund is carried out at fair value respectively according to Art. 5 - 5v. When the debt securities in the first sentence are held to maturity, subsequent valuation may also be carried out at amortized cost in accordance with applicable International Financial Reporting Standards requirements. (2) Subsequent valuation of debt securities owned by a payment fund, outside those specified in para. 1, is carried out according to Art. 5b and 5v.

Art. 5g. (New - State Gazette, No. 94 of 2018, effective 19.11.2018; amended, No. 59 of 2021.) (1) (Amended - State Gazette, No. 59 of 2021.) In cases of valuing debt securities by a method under Art. 5b, para. 3 or Art. 5v, the pension insurance company submits to the Commission together with the valuation information under Art. 2, para. 1, respectively Art. 2, para. 2:

1. justification for the choice of the respective method, including relevant data, characteristics of the security and other material circumstances for the company's assessment;
2. information on the application of the method chosen by the pension insurance company, as follows: a) a report according to the template in Annex No. 1 when valuing by the discounted cash flow method; b) the calculations and assumptions made when valuing by a method other than that in letter "a". (2) Information under para. 1, item 1 is not submitted when there is no change in the justification. (3) Information under para. 1, item 2 is not submitted when there is no change in the value of risk premium components in the report under para. 1, item 2, letter "a", respectively in the assumptions under para. 1, item 2, letter "b".

Art. 6. (Amended and supplemented - State Gazette, No. 34 of 2004, No. 57 of 2005, amended, No. 32 of 2006; amended and supplemented, No. 28 of 2009; amended, No. 74 of 2009, effective 19.09.2009; amended, No. 107 of 2013, effective 01.01.2014; amended and supplemented, No. 94 of 2018, effective 19.11.2018.) (1) (Amended - State Gazette, No. 28 of 2009; amended, No. 107 of 2013, effective 01.01.2014; amended, No. 94 of 2018, effective 19.11.2018.) Subsequent valuation of shares traded on a regulated market in a Member State, respectively an official stock exchange market or another organized market in a third country, which are included in the primary index of the respective market according to Annex No. 2, is carried out at: a) closing price of that market for the previous working day, published in a stock exchange bulletin or electronic system for financial instrument price information; b) last "bid" price for the previous working day, published in a stock exchange bulletin or electronic system for financial instrument price information, if a price cannot be determined under letter "a". (2) (Amended - State Gazette, No. 74 of 2009, effective 19.09.2009; amended, No. 107 of 2013, effective 01.01.2014; amended, No. 94 of 2018, effective 19.11.2018.) Subsequent valuation of shares traded on a regulated market in a Member State, respectively an official stock exchange market or another organized market in a third country, outside those specified in para. 1, is carried out at the lower price of: a) the published closing price on that market for the previous working day, if continuous price information is provided showing executed transactions with sufficient frequency and volume for the last three consecutive months prior to the current month; b) last "bid" price for the previous working day, published in a stock exchange bulletin or electronic system for price information, if continuous price information is provided showing executed transactions with sufficient frequency and volume for the last three consecutive months prior to the current month. (3) (Amended - State Gazette, No. 74 of 2009, effective 19.09.2009; amended, No. 107 of 2013, effective 01.01.2014; repealed, No. 94 of 2018, effective 19.11.2018.) (4) (Amended, entirely - State Gazette, No. 74 of 2009, effective 01.01.2010; amended, No. 94 of 2018, effective 19.11.2018.) If the valuation method under para. 1, respectively para. 2, cannot be applied, subsequent valuation of shares is carried out using one of the following methods and models described in the rules under Art. 17:

1. market multiples method of comparable companies using the comparable company multiples model;
2. net asset book value method using the net asset book value model;
3. discounted cash flow method using: a) equity discounted cash flow model; b) enterprise discounted cash flow model; or c) dividend discount model. (5) (Amended - State Gazette, No. 94 of 2018, effective 19.11.2018.) Subsequent valuation of rights or warrants on shares traded on a regulated market in a Member State, respectively an official stock exchange market or another organized market in a third country, is carried out at the lower price of the closing price and the last "bid" price for the previous working day, published in a stock exchange bulletin or electronic system for price information. (6) (Amended, entirely - State Gazette, No. 28 of 2009; amended, No. 74 of 2009, effective 19.09.2009; amended, No. 94 of 2018, effective 19.11.2018.) If para. 5 cannot be applied, subsequent valuation of rights and warrants is carried out at fair value determined by a suitable model specified in the rules under Art. 17. (7) (Amended - State Gazette, No. 74 of 2009, effective 19.09.2009; amended, No. 94 of 2018, effective 19.11.2018.) Subsequent valuation of shares acquired under initial public offering conditions, from their registration date at the depository institution until their admission to trading on the respective trading venue, is determined at the acquisition price from the initial public offering. (8) (Amended, entirely - State Gazette, No. 28 of 2009; amended, No. 74 of 2009, effective 19.09.2009; repealed, No. 94 of 2018, effective 19.11.2018.)

Art. 6a. (New - State Gazette, No. 74 of 2009, effective 01.01.2010; amended and supplemented, No. 94 of 2018, effective 19.11.2018; amended and supplemented, No. 59 of 2021.) (1) (New - State Gazette, No. 94 of 2018, effective 19.11.2018; amended, No. 59 of 2021.) When carrying out subsequent valuation according to Art. 6, para. 2, the pension insurance company submits to the Commission within the period under Art. 23, para. 1, respectively Art. 23, para. 2, a justification containing data proving compliance with the criteria under Art. 17, para. 3, item 7. The justification is not submitted when there is no change in the information. (2) (Previous para. 1, amended - State Gazette, No. 94 of 2018, effective 19.11.2018; supplemented, No. 59 of 2021.) When carrying out subsequent valuation according to Art. 6, para. 4, the choice of the respective method and model, as well as the non-use of other methods and models, is justified in writing and the justification with attached valuation calculations is sent to the Commission within the period under Art. 23, para. 1, respectively Art. 23, para. 2. (3) (Previous para. 2, amended - State Gazette, No. 94 of 2018, effective 19.11.2018.) The justification under para. 2 shall contain:

1. a brief description of the company being valued, namely: a) activity data, including market share and offered products or services; b) total value of assets and liabilities according to the last published accounting balance sheet; c) other material circumstances at the company's discretion;
2. a brief description under item 1 for a comparable company and a comparative analysis with the company being valued when choosing the method under Art. 6, para. 4, item 1. (4) (New - State Gazette, No. 94 of 2018, effective 19.11.2018.) The justification under para. 2 is not submitted when there is no change in the information. (5) (New - State Gazette, No. 94 of 2018, effective 19.11.2018; amended, No. 59 of 2021.) When carrying out subsequent valuation according to Art. 6, para. 6, the pension insurance company submits to the Commission within the period under Art. 23, para. 1, respectively Art. 23, para. 2, the calculations made for valuing rights and warrants. Information is not submitted when there is no change in the presented data.

Art. 7. (Amended and supplemented - State Gazette, No. 57 of 2005; amended and supplemented, No. 39 of 2007, effective 19.05.2007; amended and supplemented, No. 28 of 2009; amended, No. 74 of 2009, effective 19.09.2009; entirely amended, No. 94 of 2018, effective 19.11.2018.) (1) Subsequent valuation of shares or units of collective investment undertakings established in the country is carried out at the last determined and published repurchase price up to 12:00 on the valuation day. (2) In cases where the legally determined minimum net asset value of the collective investment undertaking has not been reached, subsequent valuation of its issued units is carried out at the last determined and published up to 12:00 on the valuation day issue price of a single unit, reduced by the amount of planned expenses in the fund's rules for issuance and repurchase of a single unit. (3) If a price cannot be determined under para. 1 and 2, subsequent valuation is carried out at the published closing price on the respective market for the previous working day, if continuous price information is provided showing executed transactions with sufficient frequency and volume for the last three consecutive months prior to the current month. (4) In cases where para. 1 - 3 cannot be applied, subsequent valuation of shares, respectively units under para. 1, is carried out either at the last determined and published repurchase price, or at the fair value of a single share, respectively unit, determined by the net asset book value method according to the last balance sheet registered in the Commission's public register of the respective collective investment undertaking - whichever of the two amounts is calculated using the most up-to-date net asset data of the undertaking. (5) Subsequent valuation of shares, respectively units of collective investment undertakings established outside the country, is carried out at the last determined and published repurchase price up to 12:00 Bulgarian time on the valuation day. (6) If a price cannot be determined under para. 5, subsequent valuation is carried out at the published closing price on the respective market for the previous working day, if continuous price information is provided showing executed transactions with sufficient frequency and volume for the last three consecutive months prior to the current month. (7) In cases where para. 5 and 6 cannot be applied, subsequent valuation of shares, respectively units under para. 5, is carried out either at the last determined and published repurchase price, or at fair value determined by the net asset book value method according to the last published accounting balance sheet of the respective collective investment undertaking - whichever of the two amounts is calculated using the most up-to-date net asset data of the undertaking. Outside these cases, when the rules of the collective investment undertaking provide for certain conditions under which repurchase of shares, respectively units, is not carried out, their subsequent valuation is carried out at the last determined and published net asset value of a single share, respectively unit. (8) Outside the cases under para. 7, when the rules of the collective investment undertaking provide for certain conditions under which repurchase is not carried out...