Ordinance No. 39 of 21.11.2007 on the Disclosure of Shareholdings in a Public Company

ORDINANCE No. 39 of 21.11.2007 on the Disclosure of Shareholdings in a Public Company

Pub. - State Gazette, No. 103 of 07.12.2007; amended and supplemented, No. 63 of 12.08.2016; amended, No. 48 of 08.06.2021

Adopted by Decision No. 90-N of 21.XI.2007 of the Financial Supervision Commission

Chapter One
GENERAL PROVISIONS

Art. 1. (1) This Ordinance regulates the conditions and procedure for the disclosure of shareholdings in a public company, as well as the content and form of the notification for the disclosure of shareholdings.
(2) This Ordinance also regulates the procedure for making a notification upon acquiring control in an investment company.

Art. 2. (1) Every shareholder who acquires or transfers directly and/or in accordance with para. 2 the right to vote at the general meeting of a public company is obliged to notify the Financial Supervision Commission, hereinafter referred to as "the Commission", and the public company, when:

1. as a result of the acquisition or transfer, their right to vote at the general meeting of the company reaches, exceeds or falls below 5 percent or a number multiple of 5 percent of the total number of votes at the general meeting of the company;
2. their right to vote exceeds, reaches or falls below the thresholds under item 1 as a result of corporate events related to the company that lead to changes in voting rights.
   (2) The obligation under para. 1 also applies to any person who has the right to acquire, transfer or exercise voting rights at the general meeting of a public company due to the existence of one or more of the following conditions:
3. voting rights held by a third party with whom the person has concluded an agreement to follow a permanent common policy in the management of the company through joint exercise of their held voting rights;
4. voting rights held by a third party with whom the person has concluded an agreement providing for the temporary transfer of voting rights;
5. voting rights associated with shares provided as security to the person, provided that the person can control the voting rights and has explicitly declared the intention to exercise them;
6. voting rights associated with shares provided for use by the person;
7. voting rights that are held or can be exercised in accordance with items 1-4 by a company over which the person exercises control;
8. voting rights associated with shares deposited with the person, which the person can exercise at their own discretion without special instructions from the shareholders;
9. voting rights held by third parties on their behalf, but for the account of the person;
10. voting rights that the person can exercise in the capacity of an attorney-in-fact, when the person can exercise them at their own discretion without special instructions from the shareholders.
    (3) A public company that acquires or transfers its own shares directly or through another person acting in its own name but for the account of the company is obliged to notify the Commission and disclose to the public, under the conditions and procedure of Art. 100t and 100f of the Public Offering of Securities Act (POSA), information on the number of votes associated with these shares, immediately, but no later than 4 working days from the acquisition or transfer, when their number reaches, exceeds or falls below 5 or 10 percent of the voting rights at the general meeting of the company.

Art. 3. (1) Voting rights are calculated based on the total number of shares with voting rights for each separate class, regardless of whether a restriction has been imposed on the exercise of the voting right.
(2) The total number of voting rights is determined based on the last disclosed information from the public company regarding the total number of shares with voting rights and the size of the capital in accordance with Art. 112d of POSA.

Art. 4. In cases where reaching or crossing the thresholds under Art. 2, para. 1, item 1 is the result of direct acquisition or transfer of shares with voting rights, the obligation to notify the Commission under Art. 2, para. 1 also arises for the Central Depository. The obligation to notify is fulfilled by the end of the day following the acquisition or transfer of the shares.

Art. 5. (Am. - SG, No. 63 of 2016) (1) The obligation to notify under Art. 2 does not apply to voting rights associated with:

1. shares acquired solely for the purpose of carrying out clearing and settlement within the normal settlement cycle, which cannot be longer than three working days from the conclusion of the transaction;
2. shares held by trustees in that capacity and provided that they can exercise the voting rights associated with the shares solely by instruction of the client, given in written or electronic form;
3. (am. - SG, No. 63 of 2016) shares held by a market-maker acting in that capacity, whose voting right does not reach or exceed 5 percent of the votes at the general meeting of the company, provided that:
   a) (am. - SG, No. 63 of 2016) has obtained a license to carry out activities as an investment intermediary in accordance with the Markets in Financial Instruments Act, the applicable law of another Member State and possesses initial capital in accordance with Art. 8, para. 1 of the Markets in Financial Instruments Act; b) does not participate in the management of the company and does not exercise influence on the company for the purchase of shares or maintenance of their prices. (2) A market-maker who wishes to benefit from the exception under para. 1, item 3, must notify the Commission that it is carrying out or intends to carry out activities as a market-maker with the shares of a specific company no later than by the expiry of the term under Art. 13, para. 1. The market-maker is obliged to notify the Commission in accordance with the first sentence also upon termination of its activities as a market-maker with the shares of the respective company. Notifications are made in written form according to a sample established by the Deputy Chairman of the Commission, heading the "Supervision of Investment Activities" Management, hereinafter referred to as "the Deputy Chairman". (3) The market-maker under para. 2 is obliged, upon request of the Commission, to identify the securities or financial instruments that it holds in connection with its activities as a market-maker. In cases where the market-maker cannot identify the securities or financial instruments in accordance with the first sentence, the Commission may oblige it to hold them in separate accounts.

Art. 6. The obligation to notify under Art. 2 does not apply to a company for which the obligation to notify is fulfilled by its parent company, and when the parent company itself is a controlled company - by its own parent company.

Art. 7. (Am. and supp. - SG, No. 63 of 2016) (1) (Rev. - SG, No. 63 of 2016) (2) (Rev. - SG, No. 63 of 2016) (3) (Rev. - SG, No. 63 of 2016) (4) (Am. - SG, No. 63 of 2016) In the cases under Art. 146, para. 2 - 4 of POSA, the parent company of a management company or investment intermediary must meet the following conditions:

1. the parent company cannot, through direct or indirect instructions or in any other way, interfere with the exercise of voting rights held by the management company or investment intermediary;
2. the management company or investment intermediary must be able to freely and independently of the parent company exercise the voting rights associated with the shares that it manages.
   (5) (Am. - SG, No. 63 of 2016) A parent company that wishes to benefit from the exception under Art. 146, para. 2 - 4 of POSA must immediately provide to the Commission:
3. a list with the names of the management companies and investment intermediaries, indicating the competent authorities exercising supervision over their activities, or stating that there is no competent authority exercising such supervision, without indicating the public companies;
4. a declaration that the parent company meets the requirements under para. 4 regarding each of the management companies or investment intermediaries.
   (6) The parent company must keep the list under para. 5, item 1 updated.
   (7) (Am. - SG, No. 63 of 2016) When the parent company intends to benefit from the exception under Art. 146, para. 2 - 4 of POSA solely with respect to the financial instruments under Art. 148a, para. 1 and 4 of POSA, it submits to the Commission only the list under para. 5, item 1. (8) The parent company of a management company or investment intermediary is obliged, upon request of the Commission, to provide evidence that:
5. the organizational structure of the parent company and of the management company or investment intermediary guarantees that voting rights are exercised independently of the parent company;
6. the persons who decide on the manner of exercising voting rights act independently of each other;
7. if the parent company is a client of its management company or investment intermediary or holds shares that are managed by the management company or investment intermediary, there is a specific written agreement between them, according to which the parent company is treated as the other clients of the management company or investment intermediary.
   (9) To fulfill the requirement under para. 8, item 1, there must be at least written procedures drawn up for the purpose of preventing the dissemination of information between the parent company and the management company or investment intermediary in connection with the exercise of voting rights. (10) (Am. - SG, No. 63 of 2016) For companies whose seat is in a third country, for which a license would be required under Art. 5 of Council Directive 85/611/EEC or for the management of an individual portfolio under item 3 of Section "A" of the Annex to Council Directive 93/22/EEC on investment services in the field of securities, if they had their seat in a Member State, or in the case of an investment intermediary - if its head office were located in a Member State, Art. 146, para. 2 - 4 of POSA applies, provided that they comply with equivalent requirements for the independent exercise of voting rights or in the management of a portfolio as a management company, respectively investment intermediary. (11) (Am. - SG, No. 63 of 2016) It is considered that the requirements of the legislation of the third country are equivalent to the requirements for the independent exercise of voting rights under Art. 146, para. 2 - 3 of POSA if, according to the legislation of the respective country:
8. the management company or investment intermediary can in all cases freely and independently of the parent company exercise the voting rights associated with the shares that it manages, and does not take into account the interests of the parent company or another company controlled by the parent company in the event of a conflict of interest;
9. the parent company complies with the requirements under para. 5, item 1 and para. 7 and provided that:
   a) it declares that it meets the requirements under item 1 regarding each of the management companies and investment intermediaries; b) upon request of the Commission, it can provide evidence of compliance with the requirements under para. 8.

Art. 8. (Rev. - SG, No. 63 of 2016)

Art. 9. (Am. - SG, No. 63 of 2016) The existence of the circumstances under Art. 2 of this Ordinance and Art. 148a, para. 1 and 4 of POSA is established by a declaration. The declaration is attached to the notification submitted to the Commission.

Chapter Two
CONTENT, FORM AND PROCEDURE FOR DISCLOSURE OF SHAREHOLDINGS

Section I
Content and form of the notification and declaration

Art. 10. (Am. - SG, No. 48 of 2021) (1) (Am. - SG, No. 48 of 2021) Notifications and declarations under Art. 9 are submitted in written form according to a sample established by the Deputy Chairman. The sample is published on the website of the Commission. It is considered that the written form is observed when the notification and declaration are submitted electronically under the conditions and procedure of the Electronic Document and Electronic Authentication Services Act. (2) The notification from the Central Depository is carried out electronically in a format proposed by the Central Depository and approved by the Deputy Chairman.

Art. 11. (Am. and supp. - SG, No. 63 of 2016) (1) The notification from the shareholder and the person under Art. 2, para. 2 must contain at least the following data:

1. for the person making the notification:
   a) for a natural person - full name; b) for a sole trader or legal entity - name, seat and address of management;
2. grounds for making the notification;
3. the data under item 1 for the shareholder, when different from the person making the notification;
4. name and seat of the public company in which the person has acquired, transferred or has the right to exercise a voting right;
5. for the shareholding of the person in the votes at the general meeting of the public company:
   a) number of shares with voting rights and number of votes - before the acquisition or transfer, as a result of which the person has reached or crossed the thresholds under Art. 2, para. 1, item 1; b) number of shares with voting rights, number of votes and their share in the total number of votes - as a result of the acquisition or transfer, with which the person has reached or crossed the thresholds under Art. 2, para. 1, item 1;
6. the date on which the person's voting right reached, exceeded or fell below the thresholds under Art. 2, para. 1, item 1;
7. the controlled persons through whom the person exercises voting rights, if applicable, and data on the voting rights held by them and the share of the total number of voting rights, when the controlled person holds voting rights above the thresholds indicated in Art. 2, para. 1, item 1.
   (2) (Am. - SG, No. 63 of 2016) The notification from the persons under Art. 148a, para. 1 and 4 of POSA must contain at least the following data:
8. the type of financial instrument;
9. the number of voting rights and their share in the total number of votes - as a result of the acquisition or transfer, with which the person has reached or crossed the thresholds under Art. 2;
10. the controlled persons through whom the financial instruments are held, if applicable, and data on the voting rights held by them and the share of the total number of voting rights, when the controlled person holds voting rights above the thresholds indicated in Art. 2, para. 1, item 1;
11. the date on which the person's voting right reached, exceeded or fell below the thresholds under Art. 2, para. 1, item 1;
12. for instruments with an exercise period - indication of the date or period within which the shares will be or can be acquired, if applicable;
13. maturity date or expiry date of the financial instrument;
14. for the holder of the financial instruments:
    a) for a natural person - full name; b) for a sole trader or legal entity - name, seat and address of management;
15. name and seat of the public company that issued the underlying shares.
    (3) The notification from the Central Depository must contain at least:
16. for the shareholder - the data under para. 1, item 1;
17. for the shareholding of the person in the votes at the general meeting of the public company - the data under para. 1, item 5 regarding the directly held, acquired or transferred shares;
18. date of registration in the Central Depository of the acquisition, respectively the transfer;
19. data on the public company in which the person has acquired or transferred shares, including:
    a) name, seat and address of management; b) registration number of the company with the Commission and code in the Central Depository; c) size of capital, number of votes at the general meeting and number of shareholders; d) ISIN code of the issue from which the person has acquired or transferred shares. (4) Notifications to the Commission must also contain the following information:
20. data on the obligated person:
    a) for a natural person - EGN (Personal Identification Number), permanent and current address, contact telephone, and if a foreign person - personal number and address; b) for a sole trader and legal entity - BULSTAT code, respectively the unique identification code, full names of the persons who manage and represent the person, correspondence data, including telephone, electronic address and contact person, and if a foreign person - analogous identification data;
21. the data under item 1, letter "a" for the authorized person.
    (5) The declaration under Art. 9 contains:
22. (am. - SG, No. 63 of 2016) for a natural person, obliged under Art. 2, para. 1 and 2 of this Ordinance and Art. 148a, para. 1 and 4 of POSA - full name, EGN, current and permanent address, and if a foreign person - names, personal number and address; for a natural person representing the legal entity, obliged under Art. 2, para. 1 and 2 of this Ordinance and Art. 148a, para. 1 and 4 of POSA - full name, EGN, current and permanent address, and if a foreign natural person - names, personal number and address;
23. a statement certifying the existence of the circumstances indicated in the notification.
    (6) (Am. - SG, No. 63 of 2016) The notification and declaration under Art. 9 are signed by the person obliged under Art. 2, para. 1, 2 of this Ordinance and Art. 148a, para. 1 and 4 of POSA.

Art. 12. (Am. - SG, No. 48 of 2021) (1) (Am. - SG, No. 48 of 2021) When a natural or legal person acquires the possibility to exercise control over an investment company, the notification is made in written form according to a sample established by the Deputy Chairman and must contain the data under Art. 11, para. 1, as well as an indication of other forms of control, if control is not exercised through holding shares with voting rights. The sample is published on the website of the Commission. (2) The notification under para. 1 is submitted to the Commission by the person under para. 1 or by an authorized person within 3 working days from the occurrence of the circumstance that leads to the possibility of exercising control over the investment company.

Section II
Procedure for notification and declaration

Art. 13. (Am. - SG, No. 63 of 2016) (1) (Am. - SG, No. 63 of 2016) The obligation to notify under Art. 2, para. 1 and 2 of this Ordinance and Art. 148a, para. 1 and 4 of POSA is fulfilled immediately, but no later than 4 working days from the day following the day on which the person:

1. learns of the acquisition, transfer or the possibility to exercise voting rights in accordance with Art. 2, para. 2, or on which, according to the specific circumstances, they were obliged to learn, regardless of the date on which the acquisition, transfer or possibility to exercise voting rights produce legal consequences;
2. is notified of the occurrence of the events under Art. 2, para. 1, item 2.
   (2) For the purposes of para. 1, item 1, it is considered that the person was obliged to learn of the acquisition, transfer or the possibility to exercise voting rights within two working days from the date of conclusion of the transaction.
   (3) The obligation to notify arises for each individual shareholder or person under Art. 2, para. 2 or for both, when the number of votes held by each of them reaches, exceeds or falls below the thresholds under Art. 2, para. 1, item 1.
   (4) In the cases under Art. 2, para. 2, item 1, the obligation to notify arises for all parties to the agreement.
   (5) In the cases under Art. 2, para. 2, item 8, if the shareholder has given a proxy for one general meeting, the obligation to notify can be fulfilled through one notification at the moment of authorization, provided that the notification clearly indicates the result of the change in voting rights when the attorney-in-fact will not be able to exercise the voting rights at their own discretion. (6) In the cases under Art. 2, para. 2, item 8, when the attorney-in-fact is authorized to represent one or more shareholders for one general meeting, the obligation to notify can be fulfilled through one notification at the moment of authorization, provided that the notification clearly indicates the result of the change in voting rights when the attorney-in-fact will not be able to exercise the voting rights at their own discretion. (7) When the obligation to notify concerns more than one person, they may make one joint notification. In this case, the persons are not released from their responsibility in connection with the making of the notification.

Art. 14. The notification and declaration under Art. 9 are filled out in Bulgarian, English or another language that is customary in the sphere of international finance.

Art. 15. (1) Working days under Art. 13, para. 1 and 2 are counted in accordance with Bulgarian legislation.
(2) The Commission publishes on its website the calendar of working days in the Republic of Bulgaria.

Art. 16. (1) The Deputy Chairman may send a message regarding identified incompleteness and inconsistencies or for requested additional information or evidence for the accuracy of the data contained in the notification.
(2) In the cases under para. 1, the Deputy Chairman sets a term within which the obligated person is obliged to eliminate the identified incompleteness and inconsistencies or to submit the required additional information and documents.

Art. 17. (Am. - SG, No. 63 of 2016) (1) (Am. - SG, No. 63 of 2016) Notifications under Art. 11, para. 1-3, as well as the declaration under Art. 9 are submitted to the Commission within the terms of this Ordinance by the person obliged under Art. 2, para. 1 and 2 of this Ordinance and Art. 148a, para. 1 and 4 of POSA or by an authorized person. (2) Notifications under Art. 11, para. 1 are also provided to the public company within the terms and by the persons determined in this Ordinance. (3) The notification under Art. 11, para. 2 is also provided to the company that issued the underlying shares associated with the financial instrument. If the financial instrument relates to more than one underlying share, a separate notification is made to each company that issued underlying shares. (4) Notifications under Art. 12 are also provided to the investment company and to the regulated securities market where the shares of the company are admitted to trading, within the terms and by the persons determined in this Ordinance.

Art. 18. (Am. - SG, No. 63 of 2016) The public company is obliged to disclose to the public, under the conditions and procedure of Art. 100t and Art. 100f of POSA, the information provided with the notifications of the persons under Art. 2, para. 1 and 2 of this Ordinance and Art. 148a, para. 1 and 4 of POSA, within 3 working days from its notification.

Chapter Three
DISCLOSURE OF SHAREHOLDINGS IN ISSUERS FROM THIRD COUNTRIES

Art. 19. (1) This Ordinance also applies to issuers from third countries, whose shares are admitted to trading on a regulated market, for which the Republic of Bulgaria is the home country according to Art. 100k, para. 2, item 1 of POSA.
(2) The requirements under Art. 2, para. 3 and Art. 18 do not apply to the persons under para. 1, if the Commission deems that the legislation of the respective country regulates equivalent requirements.
(3) The Commission may consider that the requirements of the legislation of a third country are equivalent to the requirements under Art. 2, para. 3, if according to the legislation of the respective country the issuer, whose seat is in that country, must meet the following conditions:

1. when the issuer can acquire up to 5 percent of its own shares with voting rights, it discloses information on the number of shares with voting rights it holds upon every reaching or crossing of this threshold;
2. when the issuer can acquire between 5 and 10 percent of its own shares with voting rights, it discloses the information on the number of shares with voting rights it holds upon every reaching or crossing of these thresholds;
3. when the issuer can acquire more than 10 percent of its own shares with voting rights, it discloses the information on the number of shares with voting rights it holds upon every reaching or crossing of 5 or 10 percent of the voting rights, without the need to disclose information on the number of shares with voting rights held upon exceeding 10 percent of the voting rights.
   (4) The Commission may consider that the requirements of the legislation of a third country are equivalent to the requirements under Art. 18, if according to the legislation of the respective country the term within which the issuer, whose seat is in that country, is obliged to publicly disclose this information is less than 7 working days. The terms for notification