Law on Markets in Financial Instruments

LAW on Markets in Financial Instruments Pub. - State Gazette, No. 15 of 16.02.2018, in force from 16.02.2018; corr., No. 16 of 20.02.2018; am. and sup., No. 24 of 16.03.2018, in force from 16.02.2018; am., No. 98 of 27.11.2018, in force from 07.01.2019; am., No. 17 of 26.02.2019; am. and sup., No. 83 of 22.10.2019, in force from 22.10.2019; am., No. 94 of 29.11.2019; am. and sup., No. 102 of 31.12.2019; sup., No. 26 of 22.03.2020; affected by the Law on Measures and Actions during the State of Emergency, No. 28 of 24.03.2020, in force from 13.03.2020; sup., No. 34 of 09.04.2020, in force from 09.04.2020; affected by the Supplementary Law to the Health Act, No. 44 of 13.05.2020, in force from 14.05.2020; am. and sup., No. 64 of 18.07.2020, in force from 21.08.2020; am. and sup., No. 12 of 12.02.2021, in force from 12.02.2021; am., No. 21 of 12.03.2021; am. and sup., No. 16 of 25.02.2022; am. and sup., No. 25 of 29.03.2022, as the amendments by the Supplementary Law to the LMFI enter into force from 29.03.2022, and the amendments by the LFI enter into force from 08.07.2022; am. and sup., No. 51 of 01.07.2022; am. and sup., No. 8 of 25.01.2023; am. and sup., No. 65 of 28.07.2023; am. and sup., No. 66 of 01.08.2023, in force from 05.08.2023; am. and sup., No. 84 of 06.10.2023, as the amendments by the LMC enter into force from 06.10.2023; am. and sup., No. 85 of 10.10.2023, in force from 10.10.2023; am., No. 70 of 20.08.2024, in force from the date determined in the Decision of the Council of the European Union on the adoption of the euro by the Republic of Bulgaria, adopted in accordance with Article 140(2) TFEU, and the Council Regulation on the adoption of the euro by the Republic of Bulgaria, adopted in accordance with Article 140(3) TFEU; am., No. 79 of 17.09.2024; am. and sup., No. 49 of 17.06.2025; am. and sup., No. 54 of 04.07.2025; am. and sup., No. 99 of 21.11.2025; am., No. 16 of 10.02.2026; am. and sup., No. 25 of 10.03.2026; am., No. 51 of 05.06.2026, in force from 05.06.2026.

PART ONE GENERAL PROVISIONS Chapter One GENERAL PROVISIONS Subject Matter Art. 1. (Am. and sup. - SG, No. 83 of 2019, in force from 22.10.2019; am., No. 25 of 2022, in force from 29.03.2022; am. and sup., No. 8 of 2023; am., No. 99 of 2025.) This Law regulates:

1. the licensing and activities of investment intermediaries and regulated markets for financial instruments;
2. the provision of investment services or activities by third-country companies through the establishment of a branch;
3. (am. - SG, No. 25 of 2022, in force from 29.03.2022) the licensing and activities of approved reporting mechanisms and approved publication mechanisms, which benefit from derogation in accordance with Article 2(3) of 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), hereinafter referred to as "Regulation (EU) No 600/2014";
4. (am. - SG, No. 99 of 2025) the requirements for persons who manage and control the persons referred to in items 1, 3 and 5, as well as for persons who hold a qualifying holding in the persons referred to in items 1 and 5;
5. (new - SG, No. 83 of 2019, in force from 22.10.2019) the activities of central securities depositories;
6. (new - SG, No. 83 of 2019, in force from 22.10.2019) requirements for central counterparties;
7. (new - SG, No. 8 of 2023) requirements for benchmark administrators within the meaning of Article 3(1)(6) of Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks for the purposes of financial instruments and financial contracts or for measuring the performance of investment funds, and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ, L 171/1 of 29 June 2016), hereinafter referred to as "Regulation (EU) 2016/1011", licensed or registered under this Law;
8. (previous item 5 - SG, No. 83 of 2019, in force from 22.10.2019; previous item 7, No. 8 of 2023) state supervision to ensure compliance with this Law.

Objective Art. 2. The objective of this Law is:

1. to ensure protection of investors in financial instruments, including by creating conditions for increasing their awareness of the financial instruments market;
2. to create conditions for the development of a fair, open and efficient financial instruments market;
3. to maintain stability and public trust in the financial instruments market.

Regulation and Supervision Art. 3. (Sup. - SG, No. 24 of 2018, in force from 16.02.2018; sup., No. 83 of 2019, in force from 22.10.2019; am. and sup., No. 25 of 2022, in force from 29.03.2022; sup., No. 54 of 2025; am. and sup., No. 99 of 2025; am. and sup., No. 25 of 2026.) (1) Regulation and supervision over the activities and persons referred to in Art. 1 are carried out by the Commission for Financial Supervision ("the Commission") and by the Vice-Chairman of the Commission, heading the "Investment Activity Supervision" Directorate ("the Vice-Chairman"). (2) (New - SG, No. 25 of 2022, in force from 29.03.2022) The Commission for Financial Supervision exercises the powers of the competent authority under Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on prudential requirements for investment firms 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), hereinafter referred to as "Regulation (EU) 2019/2033", with regard to investment intermediaries under Art. 9a(1) or entities subject to supervision under Chapter Twenty-Two, with the exception of the powers under Article 50(b) of Regulation (EU) 2019/2033, which are exercised by the Vice-Chairman with regard to investment intermediaries under Art. 9a(1). (3) (Previous para. 2, am. - SG, No. 25 of 2022, in force from 29.03.2022) The Commission for Financial Supervision exercises the powers of the competent authority under Art. 6(4), Art. 7(1)-(3), Art. 8(1), (2) and (4), Art. 9, Art. 11(3) and (5), Art. 14(3), Art. 15, Art. 18(2), (3), (5) and (6), Art. 19(2), Art. 20, Art. 21, Art. 24(2), Art. 26(2) and (3), Art. 27(1), Art. 31, Art. 36(1)(j), Art. 41(1)(b), Art. 49(1) and (3), Art. 52(1)(k), Art. 56(b), Art. 66(b), Art. 73, Art. 76, Art. 77, Art. 79, Art. 80, Art. 83(1)(2), Art. 84(5), Art. 89(3), Art. 93(6), Art. 94(3), Art. 95(2)(3), Art. 97(2) and (3), Art. 99(6) and (7), Art. 100, first sentence, Art. 101(1)-(3), Art. 107(4), Art. 113(6) and (7), Art. 124(2), Art. 143-151, Art. 152(2), Art. 154(4), Art. 157, Art. 161(2) and (3), Art. 162(2)(z) and (i), Art. 163(3), Art. 164(2) and Art. 166(8)(d), Art. 170(4)(v), Art. 175(5), Art. 178(2)(g), Art. 179, Art. 180(1) and (2), Art. 181(2)(v), Art. 182(3), Art. 183(1)(v), Art. 199(6), Art. 201(2), Art. 221, Art. 225, Art. 243(6), Art. 244(6), Art. 259(1)(b), (v), (d), (3), (5)(b), Art. 262(2) and (3), Art. 263(2), Art. 264(4), Art. 282(6), Art. 283(1)-(3), (5) and Art. 284(9) and (11), Art. 285(1)(v) and (3), Art. 286(3), Art. 289(2) and (5), Art. 292(3) and (5), Art. 293(2), Art. 294(2) and (3), Art. 295(v), Art. 311-314, Art. 315(3), Art. 317(4)(2), Art. 323(1), Art. 325(2), Art. 327, Art. 331(1), Art. 336(4)(a), third sub-item, Art. 337(2)(2) and (3), Art. 354(6), Art. 363, Art. 365(2), Art. 366(4) and (5), Art. 367(1)(b), Art. 373(2), Art. 376(5), Art. 377(1), (4) and (5), Art. 380, Art. 383(4)(b), Art. 383(4)(1) and (5)(v), Art. 385, Art. 395(1)(3), Art. 396(1), Art. 400(2) and (3), Art. 412(5), Art. 414, Art. 415(5) and (6), Art. 420(2)(3), Art. 422(4)(2), (8) and (9), Art. 425(4) and (5), Art. 430(1)(3), Art. 458(1) and (2)(d), Art. 465(2), Art. 471(1), Art. 478(3), Art. 486(6), Art. 493(3)(i), Art. 495(1)(1) and (5) of 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), hereinafter referred to as "Regulation (EU) No 575/2013", with regard to investment intermediaries under Art. 9a(2) or entities subject to supervision under Chapter Twenty-Two 'a'. (4) (Previous para. 3, sup. - SG, No. 25 of 2022, in force from 29.03.2022) The Vice-Chairman exercises the powers of the competent authority under Art. 99(1), Art. 105(5), Art. 129(7), Art. 178(1)(b) and (2)(g), Art. 194(1), (8) and (9), Art. 213(2), Art. 215(2)(b), Art. 223, Art. 227, Art. 237, Art. 243(2) and (4), Art. 244(2) and (4), Art. 246, Art. 248, Art. 256(7), Art. 296(1), (2)(1)(b) and (2), Art. 298(4), Art. 322(3)(b) and (6)(v) and (g), Art. 329(1), Art. 344(3), Art. 345(2), Art. 352(1)(2) and (2), Art. 356(2), Art. 358(3), Art. 361, Art. 382(2), Art. 386(1), Art. 394(1) and (2), Art. 395(5)(2), Art. 398(2), Art. 399(4), Art. 401(2)(1) and (2), Art. 406(1), Art. 407, Art. 415(1)-(4), Art. 416(6), Art. 417(b), Art. 418(4), Art. 420(2)(2), Art. 423(2), Art. 427(1), Art. 428(1), Art. 430(1)(1) and (2), Art. 438(b), Art. 450(1)(y) of Regulation (EU) No 575/2013 with regard to investment intermediaries under Art. 9a(2). (5) (Previous para. 4, am. - SG, No. 25 of 2022, in force from 29.03.2022; am., No. 99 of 2025; am. and sup., No. 25 of 2026) The Commission for Financial Supervision exercises the powers of the competent authority under Art. 4, 5, 7, 9, 11, 11a, Art. 14(6), Art. 21, 21a, 22, 24, 27a, 32a, Art. 35(4) and (5), Art. 36, Art. 39(3) and Art. 42 of Regulation (EU) No 600/2014, with the exception of Art. 39(3) and Art. 42 of the same Regulation with regard to structured deposits, which powers are exercised by the Bulgarian National Bank. In the cases referred to in the first sentence, the Commission takes the relevant decisions upon the proposal of the Vice-Chairman. (6) (Previous para. 5 - SG, No. 25 of 2022, in force from 29.03.2022; sup., No. 99 of 2025) The Vice-Chairman exercises the powers of the competent authority under Art. 16, 22v, 23 and 25 of Regulation (EU) No 600/2014. (7) (Sup. - SG, No. 24 of 2018, in force from 16.02.2018; previous para. 6, sup., No. 25 of 2022, in force from 29.03.2022; am., No. 99 of 2025) Notifications and reports under Regulation (EU) No 600/2014 and Regulation (EU) 2019/2033 are submitted to the Commission. (8) (New - SG, No. 83 of 2019, in force from 22.10.2019; previous para. 7, No. 25 of 2022, in force from 29.03.2022; repealed, No. 25 of 2026) . (9) (New - SG, No. 54 of 2025) The Vice-Chairman exercises the powers of the competent authority under Regulation (EU) 2022/2554 of the European Parliament and of the Council of 14 December 2022 on digital operational resilience for the financial sector and amending Regulations (EC) No 1060/2009, (EU) No 648/2012, (EU) No 600/2014, (EU) No 909/2014 and (EU) 2016/1011 (OJ, L 333/1 of 27 December 2022), hereinafter referred to as "Regulation (EU) 2022/2554", with regard to the persons referred to in Art. 46(b), (d)-(f) and (o) of the same Regulation.

Data Collection Body Art. 3a. (New - SG, No. 25 of 2026) The Commission is a data collection body within the meaning of Art. 2(2) of Regulation (EU) 2023/2859 of the European Parliament and of the Council of 13 December 2023 establishing a European Single Access Point providing centralised access to publicly available information relevant to financial services, capital markets and sustainability (OJ, L 2023/2859 of 20 December 2023), hereinafter referred to as "Regulation (EU) 2023/2859", for the purposes of ensuring access through the European Single Access Point to the information:

1. referred to in Art. 227c(1)-(3);
2. disclosed in accordance with Art. 36(1), Art. 37(2), Art. 75a(7), Art. 85(5), Art. 120(3), Art. 123(5), Art. 157(2), Art. 181(7) and Art. 298;
3. disclosed or published in accordance with: a) Article 6(1) of 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 (OJ, L 86/1 of 24 March 2012), hereinafter referred to as "Regulation (EU) 236/2012"; b) Article 5 of Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) (OJ, L 352/1 of 9 December 2014), hereinafter referred to as "Regulation (EU) No 1286/2014"; c) Article 3(1) and (2), Art. 4(1), (3)-(5), Art. 5(1) and Art. 10(1) of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (OJ, L 317/1 of 9 December 2019), hereinafter referred to as "Regulation (EU) 2019/2088"; d) Article 26(1) of Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on a pan-European personal pension product (PEPP) (OJ, L 198/1 of 25 July 2019), hereinafter referred to as "Regulation (EU) 2019/1238".

Financial Instruments Art. 4. (Sup. - SG, No. 65 of 2023) The subject matter of this Law includes the following financial instruments, including when issued through distributed ledger technology:

1. transferable securities;
2. money market instruments;
3. units in collective investment undertakings;
4. options, futures, swaps, forward interest rate agreements and any other derivative contracts relating to securities, currencies (excluding those defined in accordance with Art. 10 of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and conditions for the conduct of business of investment firms and for the definition of certain terms for the purposes of the said Directive (Delegated Regulation (EU) 2017/565) (OJ, L 87/1 of 31 March 2017)), interest rates or yields, emission quotas or other derivative financial instruments, financial indices or financial measures, for which settlement may be effected by physical delivery or cash settlement;
5. options, futures, swaps, forward contracts and any other derivative contracts relating to commodities, for which cash settlement must be effected or for which cash settlement may be effected at the request of one of the parties (excluding cases of default or other grounds for termination of the contract);
6. options, futures, swaps and any other derivative contract relating to commodities, for which settlement may be effected by physical delivery, when they are traded on a regulated market, a multilateral trading facility (MTF) or an organised trading facility (OTF), with the exception of wholesale energy products traded on an OTF, for which settlement must be effected by physical delivery, defined in accordance with Art. 5 of Delegated Regulation (EU) 2017/565;
7. options, futures, swaps, forward contracts and any other derivative contracts relating to commodities, for which settlement may be effected by physical delivery, other than those referred to in item 6, which are not for trading purposes and have the characteristics of other derivative financial instruments in accordance with Art. 7(1), (2) and (4) of Delegated Regulation (EU) 2017/565;
8. derivative financial instruments for the transfer of credit risk;
9. contracts for differences;
10. options, futures, swaps, forward interest rate agreements, as well as any other derivative contracts relating to changes in climate, exchange rates or inflation rates or other official economic statistical indicators, for which cash settlement must be effected or for which cash settlement may be effected at the request of one of the parties (excluding cases of default or other grounds for termination of the contract), as well as any other derivative contracts relating to assets, rights, obligations, indices and measures, other than those referred to in this Article, which have the characteristics of other derivative financial instruments depending on whether they are traded on a regulated market, MTF or OTF, defined in accordance with Art. 7(3) and Art. 8 of Delegated Regulation (EU) No 2017/565;
11. emission quotas consisting of any units recognised as complying with the requirements of Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Directive 96/61/EC (emissions trading scheme) (Directive 2003/87/EC).

Application of Guidelines and Recommendations of the European Supervisory Authorities Art. 4a. (New - SG, No. 83 of 2019, in force from 22.10.2019; sup., No. 25 of 2022, in force from 29.03.2022.) (1) The Commission for Financial Supervision takes decisions on the application in its supervisory practice of recommendations and guidelines of the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) in accordance with Art. 13(1)(26) of the Law on the Commission for Financial Supervision, which are published on the Commission's website in Bulgarian. (2) (Sup. - SG, No. 25 of 2022, in force from 29.03.2022) The Commission for Financial Supervision adopts regulations for the implementation of this Law and issues instructions or other acts for the introduction of requirements, criteria and conditions arising from the recommendations and guidelines under para. 1, applicable to the persons referred to in Art. 1.

Exemptions Art. 5. (Am. - SG, No. 83 of 2019, in force from 22.10.2019; sup., No. 16 of 2022; am., No. 25 of 2022, in force from 29.03.2022; am. and sup., No. 51 of 2022; am., No. 54 of 2025; am., No. 99 of 2025.) (1) This Law does not apply to the following persons, unless otherwise provided in it:

1. insurers or reinsurers within the meaning of the Insurance Code and Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ, L 335/1 of 17 December 2009), hereinafter referred to as "Directive 2009/138/EC", when carrying out the activities under the Insurance Code and Directive 2009/138/EC;
2. persons who provide investment services solely for their parent undertakings, their subsidiary undertakings or for other subsidiary undertakings of their parent undertakings;
3. persons who provide an investment service incidentally within the meaning of Art. 4 of Delegated Regulation (EU) 2017/565 in the course of carrying out their professional activity and this professional activity is regulated by legislative or regulatory provisions or a professional code of ethics which do not prohibit the provision of that service;
4. persons who trade for their own account with financial instruments other than commodity derivatives or emission quotas or their derivatives, and do not provide any other investment services or carry out any other investment activities with financial instruments other than commodity derivatives or emission quotas or their derivatives, provided that this exemption does not apply when the said persons: a) are market makers; b) (am. - SG, No. 99 of 2025) are members or participants in a regulated market or MTF, excluding non-financial entities that execute trades on an trading venue, when those trades are part of the liquidity management or objectively reduce risks directly linked to the commercial activity or financial management of those non-financial entities or their groups; c) employ high-frequency algorithmic trading methods; or d) carry out trading for their own account when executing client orders;
5. operators required to comply with the requirements of Directive 2003/87/EC, who, when trading in emission quotas, do not execute client orders and do not provide investment services or carry out investment activities other than trading for their own account, provided that these persons do not employ high-frequency algorithmic trading methods;
6. persons who provide investment services consisting exclusively of the administration of employee participation schemes;
7. persons who provide investment services which include only the administration of employee participation schemes and the provision of investment services solely for their parent undertakings, their subsidiary undertakings or for other subsidiary undertakings of their parent undertakings;
8. members of the European System of Central Banks (ESCB) or other national authorities performing similar functions in the Union, other state authorities responsible for or participating in the management of public debt in the Union, as well as international financial institutions established by two or more Member States with the aim of mobilising funds and providing financial assistance to their members which are experiencing or threatened by serious financial problems;
9. collective investment undertakings and pension funds, regardless of whether they are coordinated at European Union level, as well as depositaries and persons managing these undertakings;
10. (am. - SG, No. 83 of 2019, in force from 22.10.2019; am., No. 51 of 2022) persons who carry out trading for their own account, including market makers, with commodity derivatives or emission quotas or their derivatives, excluding persons who carry out trading for their own account when executing client orders, as well as persons who provide investment services other than trading for their own account, relating to commodity derivatives or emission quotas or their derivatives, to clients or suppliers within the scope of their main business activity, provided that: a) (am. - SG, No. 25 of 2022, in force from 29.03.2022; am., No. 51 of 2022; am., No. 99 of 2025) in each of these cases, individually and collectively, this constitutes an ancillary activity according to criteria defined by Commission Delegated Regulation (EU) 2021/1833 of 14 July 2021 supplementing Directive 2014/65/EU of the European Parliament and of the Council by defining the criteria for when an activity should be considered ancillary to the main business activity at group level (OJ, L 372/1 of 20 October 2021), hereinafter referred to as "Delegated Regulation (EU) 2021/1833";