Law on the Application of Measures Against Market Abuse with Financial Instruments

LAW on the Application of Measures Against Market Abuse with Financial Instruments Publ. - State Gazette, No. 76 of 30.09.2016, effective from 30.09.2016; amended, No. 105 of 30.12.2016, effective from 30.12.2016; amended and supplemented, No. 95 of 28.11.2017, effective from 01.01.2018; amended and supplemented, No. 15 of 16.02.2018, effective from 16.02.2018; supplemented, No. 77 of 18.09.2018, effective from 01.01.2019; amended, No. 17 of 26.02.2019; amended, No. 83 of 22.10.2019, effective from 22.10.2019; amended, No. 94 of 29.11.2019; amended, No. 51 of 01.07.2022; supplemented, No. 25 of 10.03.2026

Chapter One GENERAL PROVISIONS

Art. 1. (1) This Law regulates the measures for the implementation of 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), hereinafter referred to as "Regulation (EU) No 596/2014", and its implementing acts. (2) Market abuse refers to insider dealing, unlawful disclosure of inside information, and market manipulation with financial instruments.

Art. 2. The purpose of this Law is the prevention and detection of market abuse with financial instruments.

Art. 3. (Amended and supplemented - State Gazette, No. 15 of 2018, effective from 16.02.2018.) (1) (Previous text of Art. 3 - State Gazette, No. 15 of 2018, effective from 16.02.2018.) With regard to market abuse with financial instruments, Regulation (EU) No 596/2014 and its implementing acts apply in addition to this Law. (2) (New - State Gazette, No. 15 of 2018, effective from 16.02.2018.) The Financial Supervision Commission adopts a regulation on the factors that persons receiving market research must take into account when information is disclosed to them within the framework of market research, to assess whether the information constitutes inside information, on the measures that these persons must take into account if inside information is disclosed to them, to comply with Art. 8 and 10 of Regulation (EU) No 596/2014, and on the registers that these persons must maintain in connection with the implementation of Art. 8 and 10 of Regulation (EU) No 596/2014.

Art. 4. (Amended - State Gazette, No. 95 of 2017, effective from 01.01.2018; amended, No. 15 of 2018, effective from 16.02.2018.) (1) The Financial Supervision Commission, hereinafter referred to as "the Commission", and the Deputy Chairman of the Commission, heading the "Supervision of Investment Activity" Directorate, hereinafter referred to as "the Deputy Chairman", exercise supervision over compliance with this Law, Regulation (EU) No 596/2014, and its implementing acts, and are competent authorities within the meaning of Art. 22 of Regulation (EU) No 596/2014. (2) (Amended - State Gazette, No. 95 of 2017, effective from 01.01.2018; amended, No. 15 of 2018, effective from 16.02.2018.) The Commission exercises the powers of a competent authority under Art. 13, Art. 19(9), Art. 24-26, Art. 29, Art. 30(2), letters "g", "d" and "e", Art. 33 and 34 of Regulation (EU) No 596/2014 upon the proposal of the Deputy Chairman. (3) The Deputy Chairman exercises all powers of a competent authority under Regulation (EU) No 596/2014, except for those explicitly conferred on the Commission. (4) All notifications and provision of information to the competent authority provided for in Regulation (EU) No 596/2014 are carried out to the Deputy Chairman.

Art. 4a. (New - State Gazette, No. 25 of 2026.) The Commission is a data collection body within the meaning of Art. 2, point 2 of Regulation (EU) 2023/2859 of the European Parliament and of the Council of 13 December 2023 on the creation of a European Single Access Point providing centralized access to publicly available information relevant for financial services, capital markets and sustainable development (OJ, L 2023/2859 of 20 December 2023), for the purpose of ensuring access via the European Single Access Point to the information under Art. 21a(1), (4) and (5) of Regulation (EU) No 596/2014.

Art. 5. The conclusion of transactions in contradiction with the prohibitions under Art. 14 and 15 of Regulation (EU) No 596/2014 does not lead to their invalidity.

Chapter Two REPORTING OF VIOLATIONS OF THIS LAW AND OF REGULATION (EU) NO 596/2014 AND ITS IMPLEMENTING ACTS

Section I Provision of Information to Persons Reporting Violations

Art. 6. The Chairman of the Commission determines by order officials from the "Supervision of Investment Activity" Directorate who are responsible for:

1. providing any interested person with information regarding the procedures for reporting violations of this Law, Regulation (EU) No 596/2014, and its implementing acts, and taking measures in relation to them;
2. receiving reports of violations and taking follow-up measures;
3. maintaining contact with the person who submitted the report, when they have revealed their identity.

Art. 7. (1) The Commission publishes on its website in a separate, easily recognizable, and accessible section information on the procedure for receiving reports of violations. (2) The information under para. 1 includes:

1. communication channels for receiving reports of violations and for contacting the officials under Art. 6, including data on: a) contact telephone numbers, explicitly stating whether calls are recorded; b) electronic and postal addresses that are secure and guarantee confidentiality for contact with the officials under Art. 6;
2. the procedures under Art. 15 and the confidentiality regime applicable to reports of violations in accordance with Art. 10;
3. procedures for protecting persons who submitted reports of violations and who are employed under an employment contract;
4. an explanation of the protection of persons within the meaning of Art. 9(1).

Art. 8. Any person has the right to submit a report of a violation of this Law, Regulation (EU) No 596/2014, and its implementing acts, both in the presence of a committed violation and in the presence of reasonable suspicions of a committed or impending violation.

Art. 9. (1) A person who submits a report or other information about a violation of this Law, Regulation (EU) No 596/2014, and its implementing acts, in violation of restrictions on disclosure of information arising from legislative, sub-legislative, or administrative provisions or from a contract, bears no liability of any kind in connection with the information provided under this Chapter. (2) Persons conducting activities in the field of financial services must regulate by rules adopted by their governing bodies appropriate procedures for reporting violations of this Law, Regulation (EU) No 596/2014, and its implementing acts by their employees.

Section II Receiving Reports

Art. 10. (Amended - State Gazette, No. 95 of 2017, effective from 01.01.2018.) (1) The receiving of reports of violations and taking follow-up measures is carried out through special communication channels that meet the following requirements:

1. they are separated from the Commission's general communication channels, including those the Commission usually uses for internal communication and communication with third parties;
2. they are designed, created, and managed in a manner that guarantees the completeness, integrity, and confidentiality of the information and prevents access by unauthorized officials and employees of the Commission's administration to this information;
3. they allow for the storage of recorded information on a durable medium for the purpose of conducting further investigations;
4. they provide opportunities for: a) written reports of violations in electronic format or on paper; b) oral reports of violations via telephone lines, whether they are recorded or not; c) holding meetings with the officials under Art. 6. (2) (Amended - State Gazette, No. 95 of 2017, effective from 01.01.2018.) The Commission ensures the provision of the information under Art. 7(2) to the person before the report they intend to submit is received, or at the latest at the moment of its receipt. When the report of violation is submitted via email or post, it is deemed that the obligation under the first sentence is fulfilled with the publication of the information according to Art. 7 on the Commission's website.

Art. 11. (1) Every received report of a violation is entered into a register kept by the officials under Art. 6. (2) The Deputy Chairman immediately sends confirmation of receipt of a written report of a violation to the postal or electronic address specified by the person who submitted the report, unless the person explicitly requested otherwise or if the Deputy Chairman has grounds to believe that such confirmation could lead to the risk of revealing the identity of the person who submitted the report.

Art. 12. (1) When a telephone line is used for reporting a violation, and the conversations on which are recorded, the orally submitted report is documented in one of the following ways:

1. an audio recording of the conversation on a durable and retrievable medium;
2. a full and accurate transcript of the conversation prepared by an official under Art. 6. (2) In the cases under para. 1, point 2, when the person who submitted the report has revealed their identity, the official under Art. 6 ensures the opportunity for the person to verify, correct, and agree with the transcript of the conversation by signing it.

Art. 13. When a telephone line is used for reporting a violation, and the conversations on which are not recorded, the orally submitted report is documented with a full and accurate transcript of the conversation prepared by an official under Art. 6. In cases where a person who submitted a report has revealed their identity, the official under Art. 6 ensures the opportunity for the person to verify, correct, and agree with the transcript of the conversation by signing it.

Art. 14. (1) When a person requests a personal meeting with an official under Art. 6 to report a violation, a full and accurate transcript of the meeting is prepared, which is stored on a durable and retrievable medium. The meeting held may also be documented by an audio recording of the conversation on a durable and retrievable medium. (2) In the cases under para. 1, when the person who submitted the report has revealed their identity, the official under Art. 6 ensures the opportunity for the person to verify, correct, and agree with the transcript of the meeting by signing it.

Art. 15. The Commission's statute under Art. 13(1), point 1 of the Law on the Financial Supervision Commission determines procedures for working with reports of violations, which include:

1. the possibility of anonymous submission of reports of violations;
2. the procedure for considering reports of violations;
3. the type, content, and deadlines for providing feedback on the results of the report of violation, which a person who submitted the report may expect after reporting;
4. the confidentiality regime applicable to reports of violations, including a detailed description of the circumstances under which the confidential data of a person who submitted a report may be disclosed in accordance with Art. 27, 28, and 29 of Regulation (EU) No 596/2014.

Section III Additional Protection Measures

Art. 16. (1) The Commission takes the necessary measures to ensure that any report of a violation received through means other than the communication channels under Art. 10 is forwarded without alteration to the officials under Art. 6 via the communication channels under Art. 10. (2) The Commission takes appropriate measures to protect information related to submitted reports of violations and to protect the identity of persons who submitted reports of violations, by ensuring access to the information only to employees for whom access to this data is necessary to perform their official duties. (3) The information entered in the register under Art. 11 is stored in a manner that guarantees its confidentiality and security.

Art. 17. (Amended - State Gazette, No. 105 of 2016, effective from 30.12.2016; supplemented, No. 15 of 2018, effective from 16.02.2018; amended, No. 83 of 2019, effective from 22.10.2019; amended, No. 51 of 2022.) (1) (Supplemented - State Gazette, No. 15 of 2018, effective from 16.02.2018; amended, No. 51 of 2022.) Persons employed under an employment contract who have submitted a report of a violation or against whom a report of a violation has been submitted have the right to protection against disciplinary punishment under Art. 187(2) of the Labour Code. (2) (Amended - State Gazette, No. 83 of 2019, effective from 22.10.2019.) The procedures for the exchange of information and cooperation between state bodies participating in the protection of persons under para. 1 are determined by a regulation adopted by the Council of Ministers.

Art. 18. (1) The transmission of data related to a report of a violation, within or outside the Commission, cannot directly or indirectly reveal the identity of a person who submitted a report and/or a person against whom a report was submitted, or other references to circumstances that would allow the identity of the person who submitted the report and/or the person against whom the report was submitted to be presumed, unless such transmission is in accordance with the confidentiality regime specified in Art. 15, point 4. (2) When the identity of the person against whom a report was submitted is not known to the public, the Commission takes measures to ensure protection of their identity at least in the same manner as provided for persons who are checked under this Law. (3) Art. 16(2) and (3) also apply to protect the identity of persons against whom a report of a violation has been submitted.

Art. 19. The Commission regularly and at least once every two years reviews and updates the procedures under Art. 15 and the measures under Art. 16, taking into account the practice of applying this Law, Regulation (EU) No 596/2014, and its implementing acts, the practice of other competent authorities in this field, as well as market and technological development.

Chapter Three COMPULSORY ADMINISTRATIVE MEASURES

Art. 20. (Amended and supplemented - State Gazette, No. 95 of 2017, effective from 01.01.2018; amended, No. 17 of 2019.) (1) To prevent and stop administrative violations of this Law, Regulation (EU) No 596/2014, and its implementing acts, to prevent and eliminate their harmful consequences, as well as when hindering the exercise of supervisory activities by the Commission or the Deputy Chairman or when endangering investor interests, the measures under para. 2 and 3 are applied. (2) In the cases under para. 1, the Deputy Chairman may:

1. issue mandatory instructions to take specific measures within a deadline set by him, necessary to eliminate the violations, their harmful consequences, or the danger to investor interests;
2. (repealed - State Gazette, No. 95 of 2017, effective from 01.01.2018);
3. (repealed - State Gazette, No. 95 of 2017, effective from 01.01.2018);
4. require the issuer to disclose information in accordance with Regulation (EU) No 596/2014 within a deadline set by the Deputy Chairman. (3) In the cases under para. 1, the Commission may issue:
5. a temporary ban on any person performing executive functions in an investment intermediary, or on any other natural person who is responsible for the violation, from performing executive functions in investment intermediaries and/or trading for their own account;
6. in case of repeated or systematic violations of Art. 14 or 15 of Regulation (EU) No 596/2014, a permanent ban on any person performing executive functions in an investment intermediary, or any other natural person who is responsible for the violation, from performing executive functions in investment intermediaries.
7. (new - State Gazette, No. 95 of 2017, effective from 01.01.2018) suspend trading in certain financial instruments;
8. (new - State Gazette, No. 95 of 2017, effective from 01.01.2018) request the imposition of attachment on movable property and claims and/or seizure on real estate. (4) The Commission may revoke the license of an investment intermediary to conduct activity if the investment intermediary and/or persons who are members of its management or supervisory body or manage its activity have committed and/or allowed the commission of a violation of Art. 14 and 15 of Regulation (EU) No 596/2014 or another gross or systematic violation of this Law or Regulation (EU) No 596/2014. (5) In determining the type of compulsory measure, the Deputy Chairman, respectively the Commission, takes into account the circumstances under Art. 31 of Regulation (EU) No 596/2014. (6) (Amended - State Gazette, No. 95 of 2017, effective from 01.01.2018; amended, No. 17 of 2019.) The Commission may publish on its website public warnings to stop violations, specifying the persons responsible for the violation and the type of violation, while complying with personal data protection requirements. (7) The Commission may propose to the Bulgarian National Bank to revoke the license to conduct activity as an investment intermediary of a bank if the relevant person systematically violates the provisions of this Law, Regulation (EU) No 596/2014, or its implementing acts.

Art. 21. (Supplemented - State Gazette, No. 95 of 2017, effective from 01.01.2018; supplemented, No. 77 of 2018, effective from 01.01.2019; amended, No. 94 of 2019.) (1) (Supplemented - State Gazette, No. 95 of 2017, effective from 01.01.2018.) The proceedings for the application of compulsory administrative measures under Art. 20(2) are initiated on the initiative of the Deputy Chairman, and in the cases under Art. 20(3) and (4) - on the initiative of the Commission. (2) (Amended - State Gazette, No. 94 of 2019.) Notifications and communications in the proceedings under para. 1 are carried out in accordance with Art. 61 of the Administrative Procedure Code. (3) If notifications and communications in the proceedings under para. 1 are not accepted in accordance with para. 2, they are deemed to have been carried out by placing them in a special designated place for this purpose in the Commission's building or by publishing them on the Commission's website. The last two circumstances are certified by a transcript prepared by officials designated by order of the Deputy Chairman. (4) (Supplemented - State Gazette, No. 95 of 2017, effective from 01.01.2018; supplemented, No. 77 of 2018, effective from 01.01.2019.) Compulsory administrative measures under Art. 20(2) are applied with a written reasoned decision of the Deputy Chairman, and under Art. 20(3) and (4) - by the Commission. The decision is communicated to the interested person within a 7-day period from its issuance and is subject to appeal before the Administrative Court - Sofia City. (5) The decision on the application of a compulsory administrative measure is subject to immediate execution, regardless of whether it is appealed.

Art. 22. To the extent that special rules are not provided in this Chapter, the relevant provisions of the Administrative Procedure Code apply.

Chapter Four ADMINISTRATIVE PENALTY PROVISIONS

Art. 23. (Amended and supplemented - State Gazette, No. 15 of 2018, effective from 16.02.2018.) (1) Whoever commits or allows the commission of a violation of:

1. (amended - State Gazette, No. 15 of 2018, effective from 16.02.2018) Art. 4(1), Art. 11, Art. 18, Art. 19, or Art. 20 of Regulation (EU) No 596/2014 or of the implementing acts of Art. 4, Art. 11, Art. 18, Art. 19, or Art. 20 of Regulation (EU) No 596/2014, is fined from 500 to 500,000 BGN, and in case of repeated violation - from 1,000 to 1,000,000 BGN, if the act does not constitute a crime;
2. (supplemented - State Gazette, No. 15 of 2018, effective from 16.02.2018) Art. 16 or 17 of Regulation (EU) No 596/2014 or of the implementing acts of Art. 16 or 17 of Regulation (EU) No 596/2014, is fined from 2,000 to 1,000,000 BGN, and in case of repeated violation - from 4,000 to 2,000,000 BGN, if the act does not constitute a crime;
3. Art. 14 or 15 of Regulation (EU) No 596/2014, is fined from 20,000 to 5,000,000 BGN, and in case of repeated violation - from 40,000 to 10,000,000 BGN, if the act does not constitute a crime.
4. (new - State Gazette, No. 15 of 2018, effective from 16.02.2018) the regulation under Art. 3(2), is fined from 500 to 250,000 BGN, and in case of repeated violation - from 1,000 to 500,000 BGN, if the act does not constitute a crime; (2) For violations under para. 1 by legal entities and sole traders, a property sanction is imposed in the following amounts:
5. for violations under para. 1, point 1 - from 1,000 to 1,000,000 BGN, and in case of repeated violation - from 2,000 to 2,000,000 BGN;
6. (amended - State Gazette, No. 15 of 2018, effective from 16.02.2018) for violations under para. 1, point 2 - from 5,000 to 2,500,000 BGN, and in case of repeated violation - from 10,000 to the greater amount between 5,000,000 BGN and 2 percent of the person's annual turnover according to their last report approved by the governing body;
7. (amended - State Gazette, No. 15 of 2018, effective from 16.02.2018) for violations under para. 1, point 3 - from 50,000 to 15,000,000 BGN, and in case of repeated violation - from 100,000 to the greater amount between 30,000,000 BGN and 15 percent of the person's annual turnover according to their last report approved by the governing body.
8. (new - State Gazette, No. 15 of 2018, effective from 16.02.2018) for violations under para. 1, point 4 - from 500 to 1,000,000 BGN, and in case of repeated violation - from 2,000 to 1,000,000 BGN. (3) In case of non-compliance with a compulsory administrative measure applied under Art. 20, the perpetrators and those who allowed it are fined from 5,000 to 50,000 BGN. (4) For violations under para. 3 by legal entities and sole traders, a property sanction is imposed in the amount of 10,000 to 100,000 BGN. (5) In the cases under para. 1, point 3, the instigators, accomplices, and concealers are also punished under para. 1, point 3, taking into account the nature and degree of their participation. (6) Income acquired as a result of the violation is confiscated for the benefit of the state to the extent that it cannot be restored to the injured persons. (7) In determining the penalty under para. 1-5, the Deputy Chairman takes into account the provision of Art. 30(2), letter "z" and the circumstances under Art. 31 of Regulation (EU) No 596/2014. (8) A person who, within one month from the entry into force of the penal order, does not pay the imposed property sanction, owes interest in the amount of the legal interest for the period from the date following the expiration of the one-month period to the date of payment. (9) (New - State Gazette, No. 15 of 2018, effective from 16.02.2018.) When the person is a parent company or a subsidiary, the respective annual turnover under para. 2, points 2 and 3 is the total annual turnover from the consolidated report of the ultimate parent enterprise for the previous year.

Art. 24. (1) The acts establishing the violations are prepared by officials authorized by the Deputy Chairman, and the penal orders are issued by the Deputy Chairman. (2) The establishment of violations, the issuance, appeal, and execution of penal orders are carried out in accordance with the Law on Administrative Violations and Penalties.

SUPPLEMENTARY PROVISIONS

§ 1. For the purposes of this Law:

1. "Issuer" is a concept within the meaning of Art. 3(1), point 21 of Regulation (EU) No 596/2014.
2. "Person against whom a report was submitted" is the person for whom the person who submitted the report has received information that they have committed or intend to commit a violation of this Law, Regulation (EU) No 596/2014, or its implementing acts.
3. "Person who submitted a report" is the person who reports to the competent authority about a real or possible violation of this Law, Regulation (EU) No 596/2014, or its implementing acts.
4. "Repeated violation" is the violation committed within one year from the entry into force of the penal order imposing a penalty for the same type of violation.
5. "Systematic violations" are three or more administrative violations of