Law For The Recovery And Restructuring Of Credit Institutions And Investment Firms

Original Language Title: Закон за възстановяване и преструктуриране на кредитни институции и инвестиционни посредници

Read the untranslated law here: http://parliament.bg/bg/laws/ID/15435/

Name of law Law for recovery and reorganisation of credit institutions and investment firms Named the Bill the Bill for reconstruction and reorganisation of credit institutions and investment firms date adopted 30/07/2015 number/year Official Gazette 62/2015 Decree No 161

On the grounds of art. 98, paragraph 4 of the Constitution of the Republic of Bulgaria

I DECLARE:

To be published in the Official Gazette the law for the recovery and restructuring of credit institutions and investment firms, passed by the National Assembly of HLIÌI 30 July 2015.

Issued in Sofia on 3 August 2015.

The President of the Republic: Rosen Plevneliev

Stamped with the State seal.

Minister of Justice: Hristo Ivanov

LAW

recovery and reorganisation of credit institutions and investment firms

Chapter one

GENERAL

Subject matter and scope

Art. 1. (1) this law shall determine the rules and procedures relating to the restoration and restructuring of:

1. credit institutions (banks), to which the Bulgarian National Bank (BNB) has issued a license for carrying out banking activities;

2. investment firms, obtained a licence for the carrying out of the activities of the financial supervision Commission (the Commission) under art. 5, al. 2, item 3 and 6 and under art. 5, al. 3, item 1 of the law on markets in financial instruments;

3. financial institutions established in a Member State, where the financial institution is a subsidiary of the Bank or investment firm licensed in the Republic of Bulgaria, or of a company referred to in paragraph 4 or 5, and falls within the scope of supervision on a consolidated basis of parent pursuant to art. 6 – 17 of Regulation (EC) no 575/13 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms, and amending Regulation (EC) No 648/2012 (OJ L 176/1 of 27 June 2013), hereinafter referred to as the Council Regulation (EC) no 575/2013;

4. financial holding companies, financial holding companies and mixed mixed-activity holding companies based in the Republic of Bulgaria;

5. financial holding companies and mixed financial holding companies mothers mothers from the European Union, where they are subject to supervision on a consolidated basis by the BANK or by the Commission;

6. the Republic of Bulgaria in credit institutions and investment firms from third countries in accordance with the special arrangements provided for in this Act;

7. the Republic of Bulgaria in credit institutions and investment firms established in other Member States – in the cases provided for in this Act.

(2) when exercising its powers, and apply the requirements of this Act in respect of a person referred to in paragraph 1. 1, respectively, the Commission shall take into account the nature of its business, the shareholders ' structure, legal form, risk profile, size and legal status, its interconnection with other institutions or the financial system as a whole, the scope and complexity of its activities, as well as whether investment services or activities carried out pursuant to art. 5, al. 2 of the law on markets in financial instruments.

Authority for the restructuring of credit institutions

Art. 2. (1) the Bulgarian National Bank's restructuring authority in respect of the subjects under art. 1, al. 1, which are subject to control or supervision on a consolidated basis by the BNB. The decisions of the BANK restructuring agency shall be taken by the Governing Council of the BANK, except as in this act otherwise provided.

(2) the Management Board of the Bulgarian National Bank sets the self structural unit, which assist it in exercising its functions under paragraph 1. 1, which is separate and apart from the structural units involved with tasks in the implementation of banking supervision and the other features of the BNB.

(3) the Management Board of the Bulgarian National Bank accepts and publishes on its website internal rules for the operation of the unit under para. 2, including the protection of professional secrecy and exchanges of information with other structural units in the Bulgarian National Bank and with other bodies.

(4) Unit under para. 2 cooperate actively in the preparation, planning and execution of the restructuring decisions with Management "banking supervision" of the Bulgarian National Bank, as well as with the Commission, where necessary.

Authority for the restructuring of investment firms

Art. 3. (1) the financial supervision Commission is a body of restructuring in terms of the entities referred to in art. 1, al. 1, subject to supervision by the Commission and are not credit institutions, and entities that are subject to consolidated supervision by the Commission. The decisions of the Commission as a body for restructuring shall be taken on the proposal of the Member of the Commission under art. 3, item 5, of the Act on the financial supervision Commission, unless this Act provides otherwise.

(2) the rules of procedure of the Commission shall be determined separately, structural unit which shall assist the Commission and the Member of the Commission under art. 3, item 5, of the Act on the financial supervision Commission in the exercise of their functions under para. 1, which is separate and apart from the functions related to the exercise of oversight of the investment activity and the other functions of the Commission.

(3) the rules of the Commission lay down rules for the operation of the unit under para. 2, including the protection of professional secrecy and exchanges of information with other departments in the Commission and with other bodies. The rules shall be published on the Commission's website.

(4) Unit under para. 2 cooperate actively in the preparation, planning and execution of the decisions to restructure with Government Oversight of the investment activity of the Commission, as well as with the BANK when necessary.

Information and participation of the Minister of finance

Art. 4. (1) the authority to restructure under art. 2, respectively, under art. 3 shall immediately inform the Minister of finance for their decisions to take action on the restructuring and implementing tools for restructuring in cases provided for by this law.

(2) the decisions referred to in paragraph 1. 1 enforceable after the approval of the Minister of finance in cases where:

1. have or may give rise to adverse effects on public finances;

2. is there a reasonable chance to get to the necessity of the use of public tools for financial stabilization in chapter fourteen, or

3. take in terms of a systemic crisis affecting several institutions or the entire financial sector.

(3) in the cases referred to in para. 2 the present restructuring of the Minister of finance decision under art. 114 and at least the following information:

1. the current financial situation of the institution;

2. the restructuring plan of the institution;

3. other information relevant to the case at the discretion of the authority to restructure or at the request of the Minister of finance.

(4) in the cases referred to in para. 2 the Minister of finance may approve or reject it. Where appropriate, the authority to restructure may amend the decision within the framework of the approval procedure.

Cooperation between the authorities of restructuring

Art. 5. (1) the Bulgarian National Bank and the Commission shall cooperate with the European banking authority (EBA) in the performance of their duties under this Act in accordance with Regulation (EC) no 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European supervisory authority (European banking authority), amending Decision No 716/2009/EC and repealing Decision 2009/78/EC (OJ , L 331/12 of 15 December 2010), hereinafter referred to as Commission Regulation (EU) no 1093/2010. They shall forthwith communicate to the EBA information necessary for the performance of their duties in accordance with art. 35 of that regulation.

(2) the Bulgarian National Bank, according to the Commission, shall decide in this Act, taking account of their potential impact in all Member States on whose territory the activity the institution or group, minimize adverse implications for financial stability and the negative economic and social consequences in those Member States.

(3) the Bulgarian National Bank, the members of the Management Board and employees of the BANK shall not be liable for any damages from acts or omissions in the performance of their duties under this Act, unless they acted willfully.

(4) the Commission, its members and employees are not liable for damages from acts or omissions in the performance of their duties under this Act, unless they acted willfully.

(5) in the restructuring of companies under art. 1, al. 1, item 4 and 5: the Commission carry out interaction, engage, where necessary, in consultation with the preparation and adoption of plans for restructuring and the adoption of concrete actions, Exchange information and coordinate their actions in the planning of the restructuring.

Chapter two

PREPARATION OF RECOVERY AND RESTRUCTURING

Section I

Recovery planning

Recovery plans

Art. 6. (1) an institution that is not part of the group which is subject to supervision on a consolidated basis, shall establish and maintain a recovery plan containing actions and measures that the institution can take to restore its financial situation in the event of a significant financial difficulties. The recovery plan is considered to be part of the management rules within the meaning of art. 15, para. 1, item 6 of the law on credit institutions, according to internal organization within the meaning of art. 24 of the law on markets in financial instruments.

(2) the institution of the Al. 1 review and update of the recovery plan at least once a year or after a change in the legal form, the structure of management or organizational structure, its financial business activity or condition that can have a significant impact on the recovery plan or to impose a change in him.


(3) the relevant competent authority according to the law on credit institutions or the law on markets in financial instruments may require the institution to update more frequently than the recovery plan provided for in para. 2.

(4) in the recovery plan cannot be provides for access to or receipt of an extraordinary public financial support.

(5) where appropriate, the recovery plan may include an analysis of the possibilities to apply for Bank set out in the plan terms and conditions for the use of Central Bank facilities, as shall be determined by the Bank and owned assets that are expected to be used as collateral.

(6) the recovery plan contains the information referred to in annex 1, except to the institution are attached simplified requirements according to art. 25. the competent authority may ask the institution to tap into the recovery plan and additional information.

(7) recovery plan includes actions and measures that the institution may take if the conditions for early intervention under art. 44, para. 1.

(8) in the recovery plan shall provide for appropriate conditions and procedures for the timely implementation of actions and measures in the recovery, as well as for a wide range of choices of such actions and measures. The plans are considered different scenarios of serious macroeconomic and financial turmoil of the matter to the institution, including events, covering the whole system and shocks with separate legal persons and groups.

(9) the governing body of the institution approved the recovery plan, then the plan is provided to the relevant competent authority according to the law on credit institutions or the law on markets in financial instruments.

Evaluation of the recovery plans

Art. 7. (1) within 6 months of the submission of the plan for reimbursement under art. 6 and 8 and after consultation with the competent authorities of the Member States, which are significant branches as far as this is relevant to the branch, the kompetententniât authority of the law on credit institutions or the law on markets in financial instruments shall review the plan and assess its compliance with the requirements under art. 6, taking into account the extent to which likelihood is justified:

1. with the implementation of the proposed action plan and measures to maintain or restore the viability and the financial situation of the institution or of the group, taking into account the actions and measures that the institution has taken or plans to take;

2. the plan and the specific actions and measures under the various scenarios in the plan to be implemented quickly and effectively in times of financial turmoil, avoiding to the greatest extent possible significant adverse implications for the financial system, including scenarios that would lead to the implementation of the plans for the recovery of other institutions within the same period.

(2) in assessing the appropriateness of the plans for recovery, the competent authority of the law on credit institutions or the law on markets in financial instruments take into account the conformity of the capital structure and the structure of the funding of the institution with the degree of complexity of its organizational structure and risk profile. The recovery plan of the unit are provided under art. 2, al. 2 or under art. 3, al. 2.

(3) in the event that the unit under art. 2, al. 2 or under art. 3, al. 2 established that in the recovery plan are provided for actions that may have an adverse effect on the ability for the restructuring of the institution, it may submit to the competent authority of the law on credit institutions or the law on markets in financial instruments, recommendations for changing the plan.

(4) the competent authority of the law on credit institutions or the law on markets in financial instruments, or the parent undertaking shall inform the institution of the European Union for its assessment and recovery plan when there are significant weaknesses or there are significant obstacles to its implementation, requires them to submit a revised plan within two months. With the permission of the competent authority, the period may be extended by another month.

(5) the institution or the parent undertaking of the European Union may express an opinion on the assessment of the competent authority within 14 days from the date of notification.

(6) the competent authority of the law on credit institutions or the law on markets in financial instruments may require the parent undertaking, by the institution or by the European Union to make specific changes in the revised plan if it thinks the shortcomings and obstacles were not removed appropriately.

(7) if the institution or the parent undertaking of the European Union did not submit a revised recovery plan for the Al. 4 or if the competent authority considers that the shortcomings and obstacles are not removed appropriately with the revised plan and there is no chance to be removed pursuant to para. 6, the competent authority requires within a specified period or by the parent institution of the European Union to plan changes in their activities in order to eliminate weaknesses in the recovery plan or the obstacles to its implementation.

(8) if the institution or the parent undertaking of the European Union is not planning a change in their activities in the period referred to in paragraph 1. 7 or the competent authority determines that the proposed changes are not suitable for the removal of weaknesses and obstacles, the competent authority may apply the measures provided for in art. 103, para. 2 of the law on credit institutions, according to art. 118, para. 1 and 2 of the law on markets in financial instruments.

Plans for the recovery of the group – subject to supervision on a consolidated basis by the BANK or by the Commission

Art. 8. (1) a parent undertaking of the European Union – subject to supervision on a consolidated basis by the BNB, respectively by the Commission, shall draw up and submit to the consolidating supervisor recovery plan for the group, which identifies actions and measures that may need to be applied at the level of the parent undertaking of the European Union or at the level of a separate subsidiary.

(2) subject to confidentiality requirements equivalent to those laid down in this law, the consolidating supervisor shall forward the recovery plan of the Group:

1. the competent authorities of the subsidiaries in the Group;

2. the competent authorities of the Member States, which are significant branches as far as this is relevant to the branch, and

3. the restructuring of subsidiaries by the group.

(3) the plan for the recovery of the Group aims to stabilise the whole group or the institution of the group, when they are exposed to shocks, so as to overcome or eliminate the causes of instability and restore the financial situation of the group or of a separate institution from the group, while taking into account the financial position of other entities of the group.

(4) the plan for the recovery of the group includes measures which ensure coordination and consistency of the actions and measures taken at the level of the parent undertaking by the European Union, at the level of the companies referred to in art. 1, item 4 and 5 as well as the measures taken at the level of the subsidiaries and, where applicable, the level of significant branches.

(5) the plan for the recovery of the Group include those referred to in art. 6, al. 6 items. The plan may also include measures for financial support within the group, adopted under the agreement on financial support, IC awarded in accordance with Chapter four.

(6) the plan for the recovery of the group includes a set of choices of actions and measures to be taken in the event of the occurrence of the various scenarios under art. 6, al. 8. For each of the scenarios indicate whether there are barriers to the implementation of recovery actions and measures within the group, or at the level of individual entities of the group, and whether there are material practical or legal impediment to the prompt transfer of own funds or repayment of liabilities or assets within the group.

(7) the governing body of a parent undertaking of the European Union, which shall draw up a plan for the recovery of the group in accordance with para. 1, shall evaluate and approve the recovery plan before its presentation of the consolidating supervisor.

Individual plans for the restoration of institutions – part of the Art Group. 9. Under the conditions of art. 10-BNB, respectively, the Commission may require the institution registered in the Republic of Bulgaria, which is part of the group – subject to supervision by the consolidating supervisor in another Member State, to prepare and submit a personal recovery plan. In these cases, the article shall apply accordingly. 6 and 7.

Evaluation of the recovery plans of the consolidating supervisor

Art. 10. (1) the Bulgarian National Bank, the Commission accordingly when consolidating supervisor, together with the competent authorities of the subsidiaries and after consultation with the competent authorities of significant branches as far as this is relevant to the relevant branch, considered the Group's recovery plan and assess its compliance with the requirements and criteria of art. 7, para. 1 and 2 and art. 8. the assessment shall be carried out in accordance with the procedure referred to in art. 7, para. 3 – 7 and this article, taking into account the potential impact of the recovery measures on financial stability in all Member States in which the Group operates.

(2) the plan for reimbursement under art. 8, al. 1 is the subject of a multilateral procedure to achieve a joint decision between the supervisor referred to in paragraph 1. 1 and the competent authorities of the subsidiaries of the Group on the:

1. review and assessment of the recovery plan for the Group;

2. the need to draw up a plan for recovery on an individual basis to institutions that are part of the group, and


3. the application of art. 7, para. 4, 6 and 7 and the relevant requirements for the institution as a part of the group, as well as the imposition of the measures under art. 7, para. 8.

(3) the time limit for reaching a joint decision on al. 2 is four months from the date on which the consolidating supervisor al. 1 has provided the recovery plan of the group in accordance with art. 8, al. 2.

(4) within the time limit referred to in paragraph 1. 3 the consolidating supervisor al. 1 may request the EBA in accordance with art. 31 (c) of Regulation (EC) no 1093/2010 to assist in reaching a joint decision on al. 2.

(5) If, within the period referred to in paragraph 1. 3 has not reached a joint decision in al. 2 supervisor and other competent bodies on the review and assessment of the recovery plan or the measures required by the parent by the European Union under art. 7, para. 4, 6 and 7 or imposed under art. 7, para. 8, the consolidating supervisor shall under para. 1 take a decision independently, taking into account the opinions and objections of the competent bodies of subsidiaries expressed in the term under para. 3. The decision shall be notified to the undertaking by the European Union and to the competent authorities of the subsidiaries.

(6) If, within the period referred to in paragraph 1. 3 has not reached a joint decision in al. 2 and one of the bodies referred to in paragraph 1. 2 took to the EBA question concerning the assessment of the recovery plan or the imposition of the measures under art. 103, para. 2, item 8 and 11 of the law on credit institutions, respectively, under art. 118, para. 1, 11 and 17 of the law on markets in financial instruments, in accordance with art. 19 of Regulation (EC) no 1093/2010, the consolidating supervisor shall under para. 1 postponed making a decision alone under para. 5 and is awaiting the decision of the EBA. In this case, the consolidating supervisor shall take a decision in accordance with the decision of the EBA. In the event that, within one month, the EBA has not taken a decision, the decision applies supervisor.

(7) where no joint decision is reached under paragraph 1. 2 within the time limit referred to in paragraph 1. 3, the consolidating supervisor al. 1 can reach a joint decision on the recovery plan of the group with those competent authorities under paragraph 1. 1, which, within the framework of the multilateral procedure to reach a joint decision pursuant to paragraph. 2 have not expressed objections. In this case, the plan shall apply only in respect of the relevant entities of the group.

(8) the joint decision referred to in paragraph 1. 2 or 7, as well as the informal decision on al. (5) and (6) is final.

(9) where the competent authorities of the subsidiaries decide concerning the preparation and the evaluation of the individual recovery plans or the imposition of measures, similar to those of art. 7, para. 8, in respect of their podnadzornite subsidiaries, consolidating supervisor in the Al. 1 may request the EBA in accordance with art. 19 (3) of Regulation (EC) no 1093/2010 to assist in reaching agreement in connection with the assessment of recovery plans or measures analogous to those of art. 103, para. 2, item 8 and 11 of the law on credit institutions, respectively, under art. 118, para. 1, 11 and 17 of the law on markets in financial instruments, as regards the subsidiaries.

Evaluation of the recovery plans of the group by a competent authority in respect of the institution – subsidiary

Art. 11. (1) the Bulgarian National Bank, the Commission accordingly, where a competent authority in respect of the institution – a subsidiary of the group, together with the supervisor, the competent authorities of the other subsidiaries of the Group and the competent authorities of significant branches as far as this is relevant to the relevant branch, considered the Group's recovery plan and assess its compliance with the requirements and criteria of art. 7 and 8. The assessment shall be carried out in accordance with the procedure referred to in art. 7, para. 3-7 and in the manner prescribed in art. 10, para. 2 – 9, taking into account the potential impact of the recovery measures on financial stability in all Member States in which the Group operates.

(2) If within the time limit under art. 10, para. 3 no joint decision is reached under art. 10, para. 2 on the need to draw up a plan for recovery on an individual basis for the institution – the subsidiary, or the application of the measures referred to in art. 7, para. 4, 6 and 7 at the level of the subsidiary company, BNB, respectively, the Commission shall take a decision independently.

(3) If within the time limit under art. 10, para. 3 one of the authorities referred to in art. 10, para. 1 took issue in connection with the review and assessment of the recovery plan of the group to the EBA in accordance with art. 19 of Regulation (EC) no 1093/2010, BNB, respectively, the Commission postponed taking a decision under paragraph 1. 2 and await the decision that EBA may take in accordance with art. 19 (3) of that regulation. In this case the Commission, respectively, shall take a decision in accordance with the decision of the EBA.

Evaluation of the recovery plans of the group as a supervisory body in respect of an important branch

Art. 12. When the BNB, respectively, the Commission's supervisory authority in respect of the relevant branch, she participates in consultation with the relevant competent authority in respect of the elements of the restoration plan of the institution or group that are relevant to the branch.

Indicators related to the recovery plan

Art. 13. (1) the recovery plan includes indicators for determining the stages, which can be taken the appropriate actions and measures set out in the plan.

(2) the indicators under para. 1 have a qualitative or quantitative nature, connected with the financial situation of the institution, and are easy to monitor. They shall be agreed with the competent authority in carrying out the assessment of recovery plans in accordance with art. 7 and art. 10-12.

(3) the institution establishes mechanisms for regular monitoring of the indicators under para. 1.

(4) the Management Board of Governors, respectively, the Board of Directors of the institution, where they consider it appropriate, in view of the circumstances, may decide:

1. to take action under the recovery plan, even though the indicator is not fulfilled, or

2. to abstain from actions set out in the recovery plan, even though the indicator is full.

(5) the institution shall immediately inform the competent authority of its decision under paragraph 1. 4.

Section II

Planning of the restructuring

Preparation of restructuring plans

Art. 14. (1) the authority to restructure under art. 2, al. 1 and art. 3, al. 1 adopt a restructuring plan in respect of each institution, which is not part of the group which is subject to supervision on a consolidated basis.

(2) the restructuring plan shall be drawn up by the organa to restructure after consultation with the authorities of restructuring and the competent authorities of the Member States in whose jurisdiction is located the relevant branches, in so far as this is relevant to important branch.

(3) the restructuring plan foresees the restructuring actions that the restructuring could take on the institution when the conditions for restructuring aid under art. 51, para. 1.

(4) in drawing up the restructuring plan any significant obstacles to the possibility of restructuring, where necessary and justified, outlines actions to overcome them, in accordance with chapter three.

(5) the restructuring plan provides for a variety of scenarios, including those in which non-compliance with obligations arising only from the State of a particular institution or is a manifestation of the financial instability of the system level.

(6) the plan for the restructuring of the institution may provide an extraordinary public financial support, except when it is in the form of a Fund for the restructuring of the banks (PBF) or by the Fund for the restructuring of investment firms (FPIP).

(7) in addition to the requirement under subsection. 6 the restructuring plan of the institution may provide for:

1. the extraordinary convenience of a fixed amount of the Central Bank;

2. convenience of a fixed amount of the Central Bank, which is available on non-standard conditions of security, maturity and interest rate.

(8) the plan for the restructuring of the institution contains an analysis of the circumstances and the way in which the institution can apply for use of the facilities of the Central Bank, including eligible assets as collateral.

(9) the institutions are obliged to assist the authority to restructure in the preparation and updating of the restructuring plans.

(10) the authority for the review and restructuring the restructuring plan updated at least once a year or after any significant change in the legal form, the structure of management, organizational structure, business or financial position of the institution, which could have significant effects on the effectiveness of the plan or having its review.

(11) for the purposes of the examination under paragraph 1. 10 the institutions shall inform the organa restructuring any change, which requires a review of the plan. Upon finding changes in the operations or the financial situation of the institution, which could have significant consequences on the effectiveness of the plan administrator "banking supervision" shall inform in due course the unit under art. 2, al. 2, respectively, Vice-President of the Commission, supervising Management Oversight of the investment activity ", informs the unit under art. 3, al. 2.

(12) the restructuring plans include a variety of options for the implementation of the measures provided for in this law, the tools and powers for the restructuring.

(13) the restructuring plans shall contain the information referred to in annex 2, expressed as far as appropriate and possible, through quantitative indicators.

(14) the information referred to in annex 2, paragraph 1 shall be provided to the institution concerned.

(15) the appropriate authority restructuring is entitled to require from institutions and companies under art. 1, al. 1, item 3 – 5 detailed records of financial contracts to which they are party, and shall set a deadline for the provision of this information.


Consultation in the case of a significant branch

Art. 15. When BNB, respectively, the Commission's authority to restructure and supervisory authority in respect of a significant branch of the institution, which is not part of the group, respectively, the Commission participated in the consultation on the initiative of the authority for the restructuring of the institution, licensed in another Member State, before the preparation of the plan for restructuring.

Information for the purposes of the restructuring plans and the cooperation of the institutions

Art. 16. (1) in the preparation of the plan under art. 14 the appropriate authority restructuring is entitled to require from institutions:

1. cooperation in the process of drawing up the plans for restructuring;

2. the information referred to in annex 3, as well as other information needed for the purposes of the design and implementation of restructuring plans.

(2) where information under para. 1, item 2 is available in Management "banking supervision" of the Bulgarian National Bank, respectively in the Management "of the investment activity Oversight" of the Commission, it shall be provided to the unit under art. 2, al. 2, respectively, under art. 3, al. 2.

Preparation of plans for the restructuring of the Group

Art. 17. (1) the Bulgarian National Bank, according to the Commission, shall adopt a plan for the restructuring of the group, when the parent undertaking of the European Union is an institution or a company under art. 1, al. 1, item 4 or 5.

(2) the plan for the restructuring of the group is drawn from the appropriate authority restructuring under para. 1 jointly with the authorities on the restructuring of subsidiaries and after consultation with the authorities for the restructuring of the relevant branches, in so far as this is relevant to important branch.

(3) the plan for the restructuring of the group includes actions to restructure the group as a whole through restructuring at the level of the parent undertaking of the European Union or by separation and restructuring of subsidiaries.

(4) the plan for the restructuring of the group contains measures for restructuring:

1. the parent undertaking of the European Union;

2. the subsidiaries that are part of the group which are established in the European Union;

3. companies referred to in art. 1, al. 1, item 4 and 5;

4. the subsidiaries that are part of the Group and that are located in third countries.

(5) the plan for the restructuring of the Group shall be drawn up on the basis of information submitted pursuant to art. 16.

(6) the plan for the restructuring of the group contain detailed information on:

1. restructuring actions to be taken in connection with the subjects of the group by means of restructuring actions both in terms of companies under art. 1, al. 1, item 3-5, the parent of European Union and subsidiary institutions and through coordinated actions in terms of restructuring the subsidiary institutions under the scenarios provided in art. 14, para. 5;

2. analysis of the question whether restructuring tools and powers for the restructuring can be implemented in a coordinated manner and exercise in respect of the entities of the group, established in the European Union, including measures to facilitate the acquisition of the third person of the group as a whole, individual economic activities, activities which are carried out by some entities of the group, or of certain entities of the Group and identifies possible barriers to coordinated restructuring;

3. appropriate measures for cooperation and coordination with the relevant authorities in third countries, where the group includes operators established in third countries, specifying the consequences of restructuring in the framework of the European Union;

4. the measures required to facilitate the restructuring of the group, when the conditions for restructuring, including legal and economic differentiation of certain functions or business activities;

5. the additional activities not provided for in this law, that the restructuring of the Group intends to take for the restructuring of the Group;

6. analysis of the possibilities for financing the restructuring of the group, as in the case of the use of funding mechanisms are indicated exhaustively principles for sharing responsibility for financing between the funding of individual Member States.

(7) the principles referred to in paragraph 1. 6, so 6 is determined on the basis of equitable and balanced criteria and should be in accordance with art. 143, para. 3 and with potential impact on financial stability in the Member States.

(8) the plan for the restructuring of the group could not include any of the means referred to in art. 14, para. 6 and 7.

(9) the plan for the restructuring of the group contains detailed up to date assessment of the possibility of restructuring in accordance with art. 27.

(10) the plan for the restructuring of the Group should not have a disproportionate impact on any Member State.

Procedure for the preparation of plans for the restructuring of the Group

Art. 18. (1) the parent undertaking of the European Union provides, according to the Commission, in its capacity as the authority for the restructuring of the group level information under art. 16, al. 1, item 2.

(2) the information referred to in para. 1 should cover the activities of the parent company from the European Union and, where necessary, and the activities of each entity of the group.

(3) subject to the requirements of art. 116 the organ for restructuring under para. 1 sends the information received in accordance with this article the information:

1. The European banking authority;

2. the authorities for the restructuring of subsidiaries;

3. the restructuring by States in whose jurisdiction is located the relevant branches, in so far as this is relevant to important branch;

4. the authorities of the Member States for the restructuring, in which companies are established under art. 1, al. 1, item 3-5;

5. the competent authorities of the companies and the relevant branches of the group.

(4) the authority to restructure under para. 1 send the EBA all necessary information that is relevant to the role of EBA in connection with restructuring plans for the group. In case there is information relating to subsidiaries in third countries, organ″t for restructuring under para. 1 can provide this information to the EBA only with the consent of the supervisory body or of the authority for the restructuring of the subsidiary from the third country concerned.

(5) the information sent by the authorities referred to in para. 3, item 2 – 5 shall include at least the information that applies to the subsidiary or to the relevant branch.

Procedure for the adoption of plans for the restructuring of the group, when BNB, respectively, the Commission's authority to restructure the group level

Art. 19. (1) the Bulgarian National Bank, according to the Commission, in its capacity as the authority for the restructuring of the group level together with the restructuring under art. 18, al. 3, item 2 – 4 in colleges for restructuring and after consultation with the relevant authorities, including with the competent authorities of the Member States, which are significant branches, establish and maintain plans for the restructuring of the group.

(2) in the preparation and maintenance of the Group's restructuring plans for the restructuring of the organ″t level group on al. 1 may at its sole discretion and subject to the confidentiality requirements laid down in art. 133, to include in the process of restructuring the organs of a third State, in whose jurisdiction the Group has established subsidiaries, financial holding companies or major branches.

(3) the authority to restructure the group level in the Al. 1 review and update plans for the restructuring of the Group at least once a year or after any significant change in the legal form, the management structure and the organizational structure, in the business or financial condition of the group, including each entity of the group, which could have significant effects on the effectiveness of the plan or having its review.

(4) the restructuring plan for the group is taken in the form of a joint decision of the authority for the restructuring of the group level in the Al. 1 and the restructuring of subsidiaries.

(5) the joint decision referred to in paragraph 1. 4 shall be taken within four months of the date on which the restructuring of the group level in the Al. 1 has submitted the information under art. 18, al. 3.

(6) the authority to restructure the group level in the Al. 1 may request the EBA in accordance with art. 31 (c) of Regulation (EC) no 1093/2010 to assist in reaching a joint decision on al. 4.

Actions to reach a joint decision and for coordination of decisions

Art. 20. (1) where it is not reached a joint decision of the authorities to restructure under art. 19, para. 4 within the time limit under art. 19, para. 5, the restructuring of the group level under art. 19, para. 1 take self decision on the restructuring plan of the group. The decision shall be duly motivated and shall take into account the opinions and objections of the other authorities for the restructuring.

(2) the authority to restructure the group level under art. 19, para. 1 passed the decision on para. 1 the parent undertaking.

(3) If within the time limit under art. 19, para. 5 one of the bodies to restructure under art. 18, al. 3, item 2 – 4 took issue to the EBA in accordance with art. 19 of Regulation (EC) no 1093/2010, organ″t for restructuring of group level under art. 19, para. 1 postponed making a decision and await the decision that EBA may take in accordance with art. 19 (3) of that regulation. In this case, for the restructuring of the organ″t level group shall take a decision in accordance with the decision of the EBA. In the event that the EBA does not take a decision within one month, apply the decision of the authority for the restructuring of the group level.


(4) in cases where no joint decision is reached, the restructuring of subsidiaries decide and prepare and maintain individual plans for the restructuring of the entities in the group within the limits of its competence, the expiry of the time limit under art. 19, para. 5 organ″t for the restructuring of the group level under art. 19, para. 1 may refer the question in relation to individual plans by EBA in accordance with art. 19 (3) of Regulation (EC) no 1093/2010.

(5) the authority to restructure the group level under art. 19, para. 1 can reach a joint decision by those authorities for the restructuring, which have not been objected on the restructuring plan for the group, which covers the subjects of the group, within the framework of the relevant jurisdiction.

(6) Joint decisions on al. 5 and under art. 19, para. 4 and informal decision on al. 1 are final.

(7) the procedure under para. 1 and 4 shall not apply where the authority to restructure has expressed disagreement on the basis of the fiscal responsibility of its Member State.

(8) where in the process of preparing joint solutions for restructuring authority determines in accordance with para. 7 the question, in which there are objections, affect the fiscal responsibilities of his Member State for the restructuring of the organ″t level group under art. 19, para. 1 starts re-evaluation of the plan for the restructuring of the group, including the minimum requirement of own funds and eligible obligations under art. 69.

Procedure for the preparation and adoption of plans for the restructuring of the group, when BNB, respectively, the Commission is the authority for the restructuring of a subsidiary

Art. 21. (1) where the authority is for the restructuring of a subsidiary of the parent undertaking by the European Union, Bulgarian National Bank, respectively the Commission participate in the procedures for the adoption of plans for the restructuring of the Group and shall benefit from the rights and perform the obligations referred to in art. 18-20, applicable to the authority for the restructuring of a subsidiary.

(2) the authority to restructure under para. 1 review the restructuring plan of the Group and may make a proposal to the authority for the restructuring of the group level to update it when a significant change in the legal form, the structure of management, organizational structure, business or financial position of the group, including the institution of the Al. 1 which could have significant effects on the effectiveness of the plan or having its review.

(3) in the absence of a joint decision of the authorities to the restructuring within the time limit under art. 19, para. 5 organ″t for restructuring under para. 1 take a self motivated decision in respect of the institution of the Al. 1, taking into account the views and reservations of the authority for the restructuring of the group level, the other authorities for restructuring and of other competent authorities and shall establish and maintain a plan for the restructuring of the institution, licensed in the Republic of Bulgaria.

(4) if at the expiry of the time limit under art. 19, para. 5 one of the bodies to restructure under art. 18, al. 3, item 2-5 took the matter to the EBA, apply the terms and conditions of art. 20, para. 4.

(5) in the preparation of joint decisions to restructure the authority under para. 1 determines that the question that has objections, affect the fiscal responsibilities of the Republic of Bulgaria, he asks the authorities for the restructuring of the group level to undertake a re-evaluation of the restructuring plan for the group, including the minimum requirement of own funds and eligible liabilities.

Preparation and maintenance of the restructuring plans, when BNB, respectively, the Commission's organ of restructuring in terms of meaningful branch

Art. 22. (1) the Bulgarian National Bank, according to the Commission, in its capacity as the authority for the restructuring of the relevant branch has participated in the preparation and maintenance of the plans for the restructuring of the institution or group.

(2) in the Al. 1 the Commission, respectively, give an opinion and in its capacity as competent authority within the meaning of the law on credit institutions, accordingly to the law on markets in financial instruments.

Review of the restructuring plan of the BANK, respectively, by the Commission, as the competent authority on the subject from group

Art. 23. The Bulgarian National Bank, according to the Commission, in the exercise of its supervisory functions with respect to the subject of the Group participated in the consultation, initiated by the authority for the restructuring of the group level, in connection with the establishment and periodic review of the plan for the restructuring of the group.

Transmit to the competent authorities of restructuring plans

Art. 24. The Bulgarian National Bank, according to the Commission, in its capacity as the authority for the restructuring of the group level passed the restructuring plans, as well as imported in them changed, the relevant competent authorities.

Section III

Application of simplified requirements

A decision on the application of simplified requirements when drawing up plans for reconstruction and the restructuring plans

Art. 25. (1) the Bulgarian National Bank, respectively, the Commission may take a decision on the application of simplified requirements for an institution in the preparation of recovery plans, restructuring plans, respectively, taking into account:

1. the impact of the failure to comply with the obligations of the institution may have due to the nature of the business activity, shareholder structure, its legal form, its risk profile, size and legal status for her, its interconnection with other institutions or the financial system as a whole, the scope and complexity of its activities, the performance of investment services or activities in accordance with art. 5 of the law on markets in financial instruments;

2. the likelihood of significant adverse effects on financial markets, other institutions, financing conditions or the economy as a whole in the insolvency of the institution.

(2) a decision under paragraph 1. 1 shall be determined:

1. the content and level of detail of the plans for reconstruction and restructuring;

2. the time limits for preparation of recovery plans and restructuring, as well as for their update, which may be longer than that provided for under this Act;

3. the content and level of detail of the information required by the institution;

4. the extent of the depth of the assessment of the possibility of restructuring.

(3) the Bulgarian National Bank, respectively, the Commission may at any time revoke the application of simplified requirements for an institution in preparing plans for reconstruction and restructuring.

(4) the decision referred to in paragraph 1. 1 shall not affect the powers of the BANK and the Commission to take measures to prevent or manage crises.

(5) the Bulgarian National Bank shall inform the Commission accordingly, EBA for way Al apply. 1.

(6) the Bulgarian National Bank, respectively, the Commission may decide not to apply the simplified requirements for an institution whose total value of the assets exceeds 3 billion. EUR, or the ratio of total assets to gross domestic product of the Republic of Bulgaria exceeds 4 percent.

Chapter three

EVALUATION OF THE POSSIBILITY OF RESTRUCTURING

Evaluation of the opportunity for the restructuring of the institution, which is not part of the Group

Art. 26. (1) the authority to restructure under art. 2, respectively, under art. 3, assessed the possibility of an institution that is not part of the group, to be restructured, without using any of the following means:

1. extraordinary public financial support, except where it is in the form of funds from the PBF, FPIP respectively;

2. an extraordinary facility of a fixed amount of the Central Bank;

3. facilitation of a fixed amount of the Central Bank, which is available on non-standard conditions of security, maturity and interest rate.

(2) the authority shall carry out restructuring the assessment under paragraph 1. 1 after consulting with the authorities for the restructuring of the Member States in whose jurisdiction is located the major branches of the institution concerned, in so far as this is relevant to important branch.

(3) the institution may be restructured if the restructuring is feasible and appropriate termination of activity of the institution through insolvency proceedings or through the restructuring measures provided for in this law, the tools and powers to restructure in such a manner as to ensure continuity of critical functions and without significant adverse effects on the financial system, including wider financial instability or systemically important events in the Republic of Bulgaria in other Member States or in the European Union as a whole.

(4) the authority to restructure the EBA informed, if it considers that an institution cannot be restructured under the terms of paragraphs 1 and 2. 1 and 3.

(5) for the purposes of assessing the possibility of restructuring the institution to restructure the authority shall take into account at least the circumstances referred to in annex 4, as well as other circumstances, at his own discretion.

(6) the authority shall carry out an assessment of the restructuring the possibility of restructuring simultaneously with the development and updating of the restructuring plan by the procedure of art. 14.

Evaluation of the opportunity for the restructuring of the Group

Art. 27. (1) the Bulgarian National Bank, according to the Commission, in its capacity as the authority for the restructuring of the group level assessed ability group to be restructured without using:

1. extraordinary public financial support, except where it is in the form of funds from the PBF, FPIP, respectively, or by funding mechanism restructuring of another Member State;

2. an extraordinary facility of a fixed amount of the Central Bank;

3. facilitation of a fixed amount of the Central Bank, which is available on non-standard conditions of security, maturity and interest rate.


(2) the assessment under paragraph 1. 1 taken in conjunction with the restructuring of subsidiaries after consultation with the competent authorities and the authorities of the restructuring in Member States which have established significant branches as far as is relevant to any of them.

(3) group can be restructured, if restructuring authority under para. 1 and other authorities for the restructuring is feasible and appropriate without significant adverse effects on financial systems, including broader financial instability or systemically important events in the Republic of Bulgaria, in Member States which have established entities of the group in other Member States or in the European Union as a whole:

1. to request the opening of insolvency proceedings for the entities of the group, or

2. to restructure the entities in the group using the tools and powers to restructure in such a way as to ensure the continuity of the activities of the entities of the group critical functions through their timely identification or by other means.

(4) the authority to restructure under para. 1 EBA informed, if it considers that a group cannot be restructured under the terms of paragraphs 1 and 2. 1 and 3.

(5) the assessment of the possibility of restructuring the group under the conditions of paragraphs 1 and 2. 1 and 3 shall be taken into account by the colleges for the restructuring.

(6) for the purposes of assessing the possibility of restructuring the Group restructuring authority under para. 1 and other bodies to restructure taken into account the circumstances referred to in annex 4, as well as other circumstances at their discretion.

(7) the assessment of the possibility of restructuring is carried out simultaneously with the development and updating of the plan for the restructuring of the group in accordance with art. 17 and in accordance with the decision-making procedure under art. 18-20.

Participation in evaluation of the ability for the restructuring of the group in the presence of a subsidiary or a branch in the Republic of Bulgaria a significant

Art. 28. (1) the Bulgarian National Bank, according to the Commission, in its capacity as the authority for the restructuring of the institution, licensed in the Republic of Bulgaria, which has a subsidiary in a group established in another Member State or in the European Union, together with the authority to restructure the group level assess to what extent the Group may be restructured, in compliance with the requirements under art. 27.

(2) the Bulgarian National Bank, according to the Commission, in its capacity as the competent authority for the institution, licensed in the Republic of Bulgaria, which has a subsidiary in a group established in another Member State or in the European Union, participated in the consultation, initiated by the authority for the restructuring of the group level, to assess the extent to which the Group may be restructured.

The power to overcome and eliminate the obstacles to the possibility of restructuring

Art. 29. (1) If, as a result of the work carried out in accordance with art. 26-28 evaluation of the possibility of restructuring the institution authority to restructure under art. 2, respectively, under art. 3, decides that there are substantial barriers to opportunity for restructuring, it shall notify its decision to the institution, as well as the restructuring of the Member States in whose jurisdiction is located the relevant branches, and require the institution to submit a proposal on possible measures to overcome or eliminate the obstacles referred to in the notice.

(2) in the cases referred to in para. 1 the preparation of a restructuring plan in accordance with art. 14, para. 1, as well as making a joint decision on the restructuring plans of the group in accordance with art. 19, para. 4 shall be carried out after the authority approved the restructuring measures for the removal of obstacles to the possibility of essential restructuring in accordance with para. 3 or decide on them in accordance with para. 4.

(3) within 4 months from the date of receipt of the notification under paragraph 1. 1 the institution shall submit to the authority of the restructuring proposals on possible measures to overcome or eliminate the obstacles referred to in the notice.

(4) when it considers that the proposed under para. 3 measures do not reduce or not effectively remove the substantial obstacles in the Al. 1, the authority shall take a decision to restructure, which defines and requires the institution to undertake one or more of the following measures:

1. to review the arrangements for financing or inner group to assess the need for the conclusion of such agreements, or to prepare for the provision of services within the group or with third parties to ensure that the performance of mission-critical functions;

2. limit maximum individual or common exposures;

3. to provide additional information for the purposes of the restructuring of certain content and periodicity;

4. to dispose of certain assets;

5. to restrict or terminate the existing or planned activities;

6. to restrict or suspend the development of new or existing businesses or sale of new or existing products;

7. to make changes in the legal or operational structure or the entity of the group, over which it exercises direct or indirect control, in order to reduce the complexity, so as to ensure the possibility of legally and operationally critical differentiation of functions from the other functions through the use of tools for restructuring;

8. the institution or the parent to create a parent financial holding company in the Republic of Bulgaria or parent financial holding company in the European Union;

9. the institution or company under art. 1, al. 1, item 3 – 5 to issue obligations acceptable to meet the requirements under art. 69 and 70;

10. the institution or company under art. 1, al. 1, item 3-5 to take other steps to meet the minimum requirement of own funds and eligible obligations under art. 69 and 70 through renegotiation of eligible obligations, the instruments of the additional capital or the capital of the second line, which have issued, in order to ensure that any decision of the authority to restructure for depreciation or conversion of such obligations or tools will be legally valid according to the applicable legislation;

11. where the institution is a subsidiary of the mixed-activity holding company, a mixed-activity holding to establish separate financial holding, which controls the institution in order to facilitate the restructuring of the institution and the avoidance of the application of the tools and powers for the restructuring, which would have adverse consequences for the non-financial part of the group.

(5) the authority shall notify restructuring the institution of its decision under paragraph 1. 4.

(6) within one month of notification, the institution offers a plan for the implementation of the measures laid down in the decision referred to in paragraph 1. 4.

(7) in determining the measures referred to in paragraph 1. 4 the authority shall justify the restructuring proposed by the institution measures may not lead to the removal of obstacles to the possibility of restructuring and that the measures are proportionate to their removal. The authority shall take into account the restructuring the threat that these barriers pose to financial stability, as well as the effects of the measures on the economic activities of the institution, its stability and its ability to contribute to the economy.

(8) the decisions referred to in paragraph 1. 1 and 4 of the restructuring should be motivated, including on the implementation of the requirements under paragraph 1. 7.

(9) before determining a measure referred to in paragraph 1. 4 the restructuring takes into account the potential impact of the measure for the internal market in financial services and to financial stability in other Member States and the European Union as a whole.

The power to overcome and eliminate the barriers to opportunity for the restructuring of the group, when BNB, respectively, the Commission's authority to restructure the group level

Art. 30. (1) the Bulgarian National Bank, according to the Commission, in its capacity as the authority for the restructuring of the group level together with the restructuring of subsidiaries in consultation with the Supervisory Board and the restructuring of Member States which have established significant branches as far as is relevant for them, consider the required pursuant to art. 27 evaluation within the College for restructuring with the aim of reaching a joint decision on the application of the measures outlined under art. 29, in respect of all the institutions which are part of the group.

(2) the relevant authority for the restructuring of the group level in the Al. 1 taking into account and consolidating the functions of the supervisory authority, in cooperation with EBA, in accordance with art. 25 (1) of Regulation (EC) no 1093/2010 shall prepare and submit a report to the parent company of the group by the European Union under para. 1 of the authorities for the restructuring of subsidiaries, which it transmitted to the concerned subsidiaries and restructuring of the organs of the Member States established significant branches.

(3) the report under para. 2 shall be drawn up following consultation with the competent authorities of the Member States in which they are established subsidiaries. The report analyzed the essential obstacles to the effective implementation of the instruments for adjustment and restructuring exercise of the powers in respect of the group read the impact of barriers on the business model of the Group and recommended proportionate and targeted measures that the authority for the restructuring of the group level it deems necessary or appropriate for the removal of these obstacles.

(4) within four months from the date of receipt of the report referred to in para. 2 the parent group by the European Union may reasonably object, and to offer to the authority for the restructuring of the group level alternative of the recommended in the report referred to in paragraph 1. 2 measures to remove obstacles to the essential.


(5) the authority to restructure the group level reported any measure proposed by the parent group by the European Union, the EBA, the restructuring of subsidiaries and restructuring of the organs of the Member States established significant branches as far as is relevant to them.

(6) the authority to restructure the group level together with the restructuring of subsidiaries in consultation with the relevant competent authorities and with the authorities for the restructuring of Member States that have established significant branches, shall take all appropriate action within their power to reach a joint decision on the restructuring of the College:

1. the establishment of essential obstacles;

2. assessment of the measures proposed by the parent of the group under para. 1 in order to overcome or eliminate obstacles;

3. assessment of the measures requested by the authorities to restructure in order to overcome or eliminate the obstacles.

(7) in the evaluation of the measures referred to in paragraph 1. 7, item 2 and 3, the restructuring of the group level takes into account the potential impact of measures in all Member States in which the Group operates.

(8) the joint decision referred to in paragraph 1. 6 shall be taken within four months of:

1. presentation of objections by the parent group by the European Union within the time limit and in accordance with para. 4, or

2. receipt of the report referred to in paragraph 1. 2 If the parent of the European Union, the Group has not presented an objection within the time limit referred to in paragraph 1. 4.

(9) the authority to restructure the group level provides a reasoned decision in Al together. 6 of the parent undertaking of the European Union.

(10) the authority to restructure the group level may request the assistance of the EBA to reach a joint decision pursuant to paragraph. 6 in accordance with art. 31 (c) of Regulation (EC) no 1093/2010.

(11) in the absence of a joint decision within the time limits referred to in paragraph 1. 8 the authority to restructure the group level alone decide on appropriate measures under art. 29, para. 4 to be taken at the level of the group.

(12) the decision referred to in paragraph 1. 11 be motivated and take into account the views and reservations of the other bodies to restructure. The restructuring of the group level provides a reasoned decision of the parent enterprise of the group by the European Union under para. 1.

(13) If, on expiry of the time limits referred to in para. 8 restructuring Authority took a question on measures to be taken under art. 29, para. 4, item 7, 8 or 11 to the EBA in accordance with art. 19 of Regulation (EC) no 1093/2010, the authority for the restructuring of the group level postponed making a decision and await the decision that EBA may take in accordance with art. 19 (3) of that regulation, and then take a decision in accordance with the decision of the EBA. If the EBA does not respond within one month, apply the decision of the authority for the restructuring of the group level.

(14) where no joint decision is reached within the time limits referred to in paragraph 1. 7, the restructuring of the group level may refer to the EBA in accordance with art. 19 of Regulation (EC) no 1093/2010 question on measures to be taken in Member State legislation, analogous to measures under art. 29, para. 4, item 7, 8 or 11, when authority for the restructuring of a subsidiary shall take a decision independently.

(15) the joint decision referred to in paragraph 1. 6, as well as decisions under para. 11 and 13 are final.

The power to overcome and eliminate the barriers to opportunity for the restructuring of the group, when BNB, respectively, the Commission is the authority for the restructuring of a subsidiary

Art. 31. (1) the Bulgarian National Bank, according to the Commission, in its capacity as the authority for the restructuring of the institution, licensed in the Republic of Bulgaria, which is a subsidiary of the parent undertaking by the European Union, participated along with the restructuring of the Group and level with the authorities for the restructuring of other subsidiaries of the group in the examination of the information required under art. 27 evaluation within the College for restructuring with the aim of reaching a joint decision on the application of the measures outlined under art. 29 as regards all institutions that are part of the group.

(2) in the cases referred to in para. 1 the Commission, respectively, shall submit to the authority for the restructuring of its group-level views and reservations on substantive barriers to opportunity for the restructuring of the group, the evaluation of the measures proposed by the parent undertaking of the European Union, and on possible measures to overcome the group level and the removal of obstacles.

(3) in the absence of a joint decision within the College for the restructuring of the BANK group, respectively, the Commission may, at the expiry of the time limit under art. 30, para. 8 refer to the EBA comes to the taking of measures under art. 29, para. 4, item 7, 8 or 11, in accordance with art. 19 of Regulation (EC) no 1093/2010.

(4) in the absence of a joint decision within the time limit under art. 30, para. 8 BANK, respectively, the Commission shall take a decision independently on appropriate measures to be taken by the subsidiary in accordance with art. 29.

(5) the decision referred to in paragraph 1. 4 reasons and taking into account the views and reservations of the authority for the restructuring of the Group and level of the other bodies to restructure. The Bulgarian National Bank, according to the Commission, the decision provides reasoned subsidiary and the authority for the restructuring of the group level.

(6) If, on expiry of a period of four to reach a joint decision authority for restructuring took issue for the taking of measures under art. 29, para. 4, item 7, 8 or 11 to the EBA in accordance with art. 19 of Regulation (EC) no 1093/2010, BNB, respectively, the Commission postponed making a decision and await the decision that EBA could take within one month, and then take a decision in accordance with the decision of the EBA. If the EBA does not respond within one month in respect of the subsidiary Bank decision applies, according to the Commission.

(7) the decisions referred to in paragraph 1. 4 and 6 are final.

The power to overcome and eliminate the obstacles to the possibility of restructuring, when in the Republic of Bulgaria has established a significant branch

Art. 32. where the Republic of Bulgaria has established a significant branch of the institution of a group with a parent from the European Union and as far as this is relevant to the branch BANK, respectively the Commission, participated in the consultation, initiated by the authority for the restructuring of the group, level on:

1. achievement of the decision in the College for restructuring in conjunction with the identification of the significant barriers to opportunity for the restructuring of the Group;

2. assessment of the measures proposed by the parent company from the European Union to overcome or eliminate obstacles;

3. assessment of the measures requested by the authorities to restructure in order to overcome or eliminate the obstacles.

Powers of the competent authority to overcome and eliminate the obstacles to the possibility of restructuring

Art. 33. where a supervisory authority in respect of a subsidiary institution, licensed in the Republic of Bulgaria, which is part of a group with a parent from the European Union, Bulgarian National Bank, respectively the Commission, participated in the consultation, initiated by the authority for the restructuring of the group, level on reaching a decision on restructuring in the College:

1. identification of the significant barriers to opportunity for the restructuring of the Group;

2. assessment of the measures proposed by the parent company from the European Union to overcome or eliminate obstacles;

3. assessment of the measures requested by the authorities to restructure in order to overcome or eliminate the obstacles.

Chapter four

IC FINANCIAL SUPPORT

IC financial support agreement

Art. 34. (1) the Institution of art. 1, al. 1, item 1 and 2, where is the institution of a Member State, the institution of the European Union or a subsidiary company within the group or companies under art. 1, al. 1, item 3, 4 and 5 may conclude an agreement with the other entities of the group covered by the consolidated supervision of the parent and registered in other Member States or in third countries, to undertake to provide financial support of the parent undertaking or a subsidiary, which is eligible for early intervention pursuant to art. 44, subject to the conditions provided for in this chapter.

(2) this chapter shall not apply to the intercompany financial arrangements, including arrangements for funding and arrangements for centralized provision of financial means, in cases where none of the parties have not met the conditions for early intervention.

(3) the existence of an agreement for an intra-group financial support is not provided for:

1. provision of IC financial support on the part of the subject of art. 1, al. 1, item 1-5 of another entity of the group, which was experiencing financial difficulties, if the entity referred to in art. 1, al. 1, item 1 – 5 you decide on it after consideration of each individual case and in accordance with the policy of the group, if it does not present a risk for the whole group;

2. the carrying out of activity in a Member State.

(4) the agreement on the financial support IC can:

1. includes one or more subsidiaries of the Group and to provide financial support from the parent for the subsidiaries of subsidiaries of a parent undertaking, between subsidiaries of the group that are party to the agreement, or a combination of the above;

2. provides financial support in the form of a loan, provide guarantees, provision of assets to use as collateral, or a combination of these forms of financial support by one or more transactions, including between the beneficiary of support and third party.


(5) where, under the terms of the agreement for an intra-group financial support any of the entities of the Group agreed to provide financial support to another entity of the group, the agreement may include a counter receiving consent of the subject of the support group to provide financial support to the entity of the group, which provides support.

(6) in the IC financial support shall state the rules for calculating the amount of consideration for each transaction. These rules include a requirement that the amount of the consideration to be determined at the time of the provision of financial support.

(7) the agreement, including the rules in para. 6 and other terms of the agreement are in accordance with the following principles:

1. each Party shall act freely, when you enter into the agreement;

2. when entering into the agreement and in fixing the amount of the consideration for the provision of financial support each party will act in their own interest, to take into account the direct and indirect benefits that may result to any party resulting from the provision of financial support;

3. each party that provides financial support, gets full access to relevant information by any party that receives support, before determining the amount of the consideration before any decision to provide financial support;

4. the amount of the consideration may be consistent with the information that is not available on the market, but is available on the providing financial support country due to the fact that this country is part of the same group as the receiving financial support;

5. it is not required when setting the rules for calculating the amount of the consideration referred to in paragraph 1. 6 taking into account the expected temporary impact on market prices resulting from events outside the group.

(8) the agreement on the financial support IC may be concluded only on condition that at the time of the conclusion of the proposed agreement, neither party is eligible for early intervention in accordance with the judgement of the competent authorities concerned.

(9) any right, claim or action arising out of the agreement for financial support, IC may be exercised only by the parties to the exclusion of third parties.

Overview of the proposed agreement by the BNB, respectively by the Commission, in its capacity as the consolidating supervisor

Art. 35. (1) the institution of the European Union when it is subject to supervision on a consolidated basis in the Republic of Bulgaria, the BULGARIAN NATIONAL BANK, according to the Commission, in its capacity as the consolidating supervisor application for authorisation in relation to any agreement for the proposed IC financial support in accordance with art. 34. The application shall contain the text of the proposed agreement and specifies the entities of the group, wishing to be parties thereto.

(2) consolidating supervisor shall forward the application immediately to the competent authorities of any subsidiary company, which wishes to be a party to the agreement, with a view to reaching a joint decision within a multilateral procedure.

(3) in accordance with the procedure laid down in paragraph 1. 5 – 7, the consolidating supervisor shall:

1. authorise the conclusion of the proposed agreement, if it complies with the conditions set out in art. 38;

2. the conclusion of the proposed agreement, if it considers that it does not comply with the conditions under art. 38.

(4) consolidating supervisor shall take the necessary action within its power to achieve with the competent authorities of the respective subsidiaries within four months from the date of receipt of the application, a joint decision as to whether the terms of the proposed agreement meets the conditions under art. 38, taking into account the potential impact, including on the capital market, and fiscal consequences of the implementation of the agreement in the Republic of Bulgaria and in all Member States in which the Group operates. The joint decision shall be motivated and shall be provided by the supervisor of the applicant.

(5) the consolidating supervisor may request the assistance of the EBA to reach a joint decision pursuant to paragraph. (4) in accordance with art. 31 (c) of Regulation (EC) no 1093/2010.

(6) If, within the period referred to in paragraph 1. 4 joint decision is not reached, the consolidating supervisor shall take a decision on the application independently. The decision shall be reasoned and shall indicate the opinions and objections of the other competent authorities. The decision shall be provided by the supervisor of the applicant and of the other competent authorities.

(7) If, within the period referred to in paragraph 1. 4 competent authority has referred the matter for consideration by the EBA, the consolidating supervisor shall defer making a decision and await the decision that EBA could take within one month in accordance with art. 19 (3) of Regulation (EC) no 1093/2010. In this case, the consolidating supervisor shall take a decision in accordance with the decision of the EBA. If the EBA does not respond within one month of the referral to it, the decision applies supervisor.

Part of the Bulgarian National Bank, according to the Commission, in reviewing the proposed agreement in its capacity as the competent authority of a subsidiary

Art. 36. (1) the Bulgarian National Bank, according to the Commission, in its capacity as the competent authority of an institution that is a subsidiary of the parent undertaking by the European Union, participated in the framework of its powers, together with the supervisor and with other competent authorities in the co-decision procedure for the approval of the proposed agreement for IC financial support within the period and under the conditions of art. 35, para. 4.

(2) in the event that no joint decision is reached, the competent authority for supervision of the institution – a subsidiary of the parent undertaking by the European Union, may request the assistance of the EBA within the time limit under art. 35, para. 4.

Approval of the proposed agreement by shareholders

Art. 37. (1) any proposed agreement for financial support, the IC which is a side subject in art. 1, al. 1, item 1 – 5 and received permission from the supervisor, subject to the approval of the general meeting of the shareholders or associates of the subject as a condition for its entry into force in respect of this subject.

(2) the agreement for IC financial support shall take effect in relation to the subject of art. 1, al. 1, item 1 – 5, which is a party to the agreement only if the general meeting of its shareholders or members is authorised its governing body to take a decision to grant or obtain financial support, in accordance with the terms and conditions of the agreement and with the conditions laid down in this chapter.

(3) the governing body of any entity referred to in art. 1, al. 1, item 1 – 5, which is a party to the agreement, an annual report to the general meeting of the shareholders or members on the implementation of the agreement and of any decision taken pursuant to the agreement.

(4) the signed agreements for IC financial support and changes thereto shall be made available to the NATIONAL BANK, respectively.

IC conditions for financial support

Art. 38. the Entity referred to in art. 1, al. 1, item 1 – 5 may provide financial support to another entity of the group in accordance with art. 34 only if all of the following conditions:

1. There is a real possibility the provided support to help significantly in overcoming the financial difficulties of the subject by the group, which receives support;

2. the provision of financial support aims to preserve or restore the financial soundness of the group as a whole or of the entity of the Group and is in the interests of the person providing the support;

3. financial support is provided under clearly defined conditions, including against consideration corresponding to the requirements of art. 34, para. 6;

4. in the light of the information available to the governing body of the person providing the financial support at the time of making the decision to provide financial support, there is a real opportunity to obtain consideration and if the support is provided in the form of a loan, the loan to be paid off by receiving the support entity in the Group; If the support is provided in the form of a guarantee or some form of collateral, the same condition applies to the obligation arising for the recipient in carrying out the security or collateral;

5. the provision of financial support does not compromise liquidity or solvency of the person providing the support;

6. the provision of financial support does not create a threat to financial stability in the Republic of Bulgaria;

7. at the time of granting the support person who provides support, comply with the applicable capital, liquidity and other regulatory requirements laid down by law or administrative action of the Bulgarian National Bank, respectively, and the provision of financial support does not lead to violation of these requirements, unless this is allowed by the BNB, respectively by the Commission;

8. at the time of the provision of financial support person providing support, comply with the applicable requirements for large exposures provided for in Regulation (EC) no 575/2013 and by the Ordinance under art. 73, para. 6 of the law on credit institutions, where the person is a bank; the provision of financial support does not lead to violation of these requirements, unless this is allowed by the BNB, respectively by the Commission;

9. the provision of financial support does not affect the possibility for the restructuring of the person providing the support.

Decision on granting and accepting financial support


Art. 39. (1) the decision of granting or acceptance of IC financial support in accordance with the agreement shall be taken by the steering body of the person referred to in art. 1, al. 1, item 1, 2, 3, 4 or 5, which provide, respectively, accepting the support.

(2) the decision on para. 1 to provide financial support, motivate and it states the objective of the proposed financial assistance and the manner in which the provision of the financial support shall comply with the conditions under art. 38.

Right of objection from BNB, respectively by the Commission in the provision of support by podnadzorno person

Art. 40. (1) before the provision of support in accordance with the agreement for IC company financial support under art. 1, al. 1, item 1-5 as an entity of the group, which intends to provide financial support, shall inform:

1. The Bulgarian National Bank, according to the Commission, in its capacity as the competent authority;

2. the supervisor, if different from the authorities referred to in paragraphs 1 and 3;

3. the competent authority of the entity of the group, which receives financial support, if different from the authorities referred to in paragraphs 1 and 2;

4. The European banking authority.

(2) in the notice referred to in paragraph 1. 1 shall include reasoned decision in accordance with art. 39 and details on the proposed financial support. Notification shall be provided with a copy of the agreement for an intra-group financial support.

(3) within 5 working days from the date of receipt of the notification under paragraph 1. 1 and the annexes referred to in paragraph 1. 2 BANK, respectively, the Commission may, by a reasoned decision to allow, prohibit or restrict the provision of financial support, if it considers that the conditions are not fulfilled for an intra-group financial support under art. 38.

(4) the decision of the Bulgarian National Bank, according to the Commission, under par. 3 shall be notified forthwith to the:

1. the supervisor;

2. the competent authority of the entity of the group, which receives support;

3. The European banking authority.

(5) If, within the period referred to in paragraph 1. 3 BANK, respectively the Commission, authorise the provision of financial support, as well as if in the same period does not take a decision to prohibit or restrict the support may be granted under the conditions provided to the competent authority.

(6) the decision of the steering body of the company for the provision of financial support shall be communicated to the authorities referred to in para. 1.

Obligations for notification when the BNB, respectively, the Commission is consolidating supervisory authority at the level of the Group

Art. 41. (1) where the Commission, respectively the BNB is the consolidating supervisor shall at the level of the Group and takes a decision under art. 40, para. 3 or be informed of the decision of the competent authority to resolve, ban or limit the financial support of a company of the group, it shall immediately inform the relevant decision, the members of the Supervisory Board and the members of the College for the restructuring.

(2) where the consolidating supervisor shall at the level of the group be informed of the decision of the steering body of a company of the group to provide financial support, he shall immediately inform the other members of the surveillance solution Association and members of the College for restructuring.

Right to object, according to the Commission, to prohibit or limit financial support

Art. 42. (1) where the Commission, respectively, as the competent authority has objections concerning the decision of the competent authority of another Member State to ban or limit the financial support for the society of art. 1, al. 1, item 1 – 5, he may, within two days of receipt of notification of the decision to refer the matter to the EBA and to request assistance in accordance with art. 31 of Regulation (EC) no 1093/2010.

(2) the Bulgarian National Bank, respectively the Commission may exercise its rights under paragraph 1. 1 and when consolidating supervisory authority regarding decisions prohibiting and limiting financial support to subsidiaries of institutions and companies under art. 1, al. 1, item 4 and 5.

(3) if the competent authority of another Member State, the supervising entity of the group, which intends to provide financial support, IC restrict or prohibit its provision of a company under art. 1, al. 1, item 1 – 5 and if the recovery plan of the group in accordance with art. 8 provide IC financial support, Bulgarian National Bank, respectively, the Commission may take or require to be taken re-evaluation of the recovery plan of the group in accordance with art. 10, or if the recovery plan has been drawn up on an individual basis – to require the institution to submit a revised recovery plan.

Disclosure

Art. 43. (1) the subjects of art. 1, al. 1, item 1 – 5, forming part of the group, disclosed on its Web site whether IC have concluded an agreement on financial support under art. 34, as well as a description of the terms and conditions of such an agreement and the names of the entities of the group which are parties to it, and update the information at least once a year.

(2) in the cases referred to in para. 1 apply art. 431 – 434 of Regulation (EC) no 575/2013.

Chapter five

EARLY INTERVENTION

Measures for early intervention

Art. 44. (1) the relevant competent authority according to the law on credit institutions or the law on markets in financial instruments directive may apply the measures referred to in paragraph 1. 3 where, on the basis of an evaluation considers that institution violates or may violate in the near future, the requirements of Regulation (EC) no 575/2013, of the law on credit institutions, the law on markets in financial instruments, or of acts in their application because of the rapidly worsening financial situation of the institution, including as a result of the threatened rising liquidity level of indebtedness the non-performing loans or credit concentrations. The assessment shall be based on a set of indicators defined by an Ordinance of the competent authority, in which can be turned on and the indicator, taking into account the presence of own funds in excess of the minimum requirement to the institution not less than 1.5 percentage points.

(2) the application of the measures provided for in this chapter shall limit and does not replace the possibility of application of supervisory measures under Chapter Eleven, section VI, of the Act on credit institutions and the law on markets in financial instruments.

(3) in the cases referred to in para. 1 the competent authority may:

1. require the institution to undertake one or more of the actions and measures set out in the recovery plan of the institution; When the circumstances which led to the implementation of measures for early intervention, differ from the assumptions set out in the original plan for recovery, the competent authority shall require the institution to update the recovery plan within a specified period of time and to apply one or more of the actions and measures set out in the updated plan;

2. require the institution to review and assess your condition, determine measures to overcome all identified problems and to draw up a programme for action to overcome them and a timetable for its implementation;

3. the order in writing to the institution to convene a general meeting of the shareholders or members, determine the agenda for the conduct of the General Assembly for the purpose of adopting certain decisions; If within the time limit set by the competent authority within the institution does not convene a general meeting of the shareholders ' or members ' voting rights, the competent body may convene such by the procedure of art. 103, para. 2, item 2 of the law on credit institutions, respectively, by the order of art. 118, para. 1, item 2 of the law on markets in financial instruments;

4. require the release or replacement of one or more of the members of the management organ and persons from the senior management staff of the institution, if it considers that these persons do not meet the requirements under art. 10 and 11 of the law on credit institutions, respectively, under art. 11 of the law on markets in financial instruments, and other regulatory requirements;

5. require the institution to draw up a plan for negotiating a debt restructuring with a particular lender or with all lenders under the recovery plan;

6. require changes in business strategy of the institution;

7. require changes in the legal and operational structure of the institution;

8. request and receive, including on-the-spot checks, all the information necessary to update the plan for the restructuring of the institution and to prepare for its possible restructuring, including an evaluation of the assets and its obligations under art. 55.

(4) the measures referred to in paragraph 1. 3 apply for a Bank of podupravitelâ, the supervising administrator "banking supervision", or by the officer authorized by him, specifying the appropriate deadline for their execution, which allows to assess the effectiveness of their implementation.

(5) where it is established that the Bank there are the conditions for the application of measures for the early intervention in the Al. 1, the Deputy Governor, the supervising administrator "banking supervision" shall immediately notify the Management Board of BNB.

(6) the measures referred to in paragraph 1. 3 in respect of an investment firm shall apply from the Vice-President of the Commission, a head of Government Oversight of the investment activity ", or by the officer authorized by him, specifying the appropriate deadline for their execution, which allows to assess the effectiveness of their implementation.

(7) where it is established that the conditions for the application of measures for the early intervention in the Al. 1 the investment firm, the Vice-President of the Commission, supervising Management Oversight of the investment activity, shall immediately inform the Commission.

(8) in the cases referred to in para. (5) and (7) the appropriate authority restructuring may require the institution to connect with potential buyers, to prepare for the restructuring of the institution subject to the conditions provided for in art. 59, para. 3, and the provisions on the confidentiality provided for in art. 116.

The release of the members of the management organ and of senior management personnel


Art. 45. (1) the competent authority may require the release of individual or all the members of the steering body of the institution, as well as of persons empowered to manage and represent the institution, or of a person of senior management personnel in the following cases:

1. in a significant deterioration of the financial situation of the institution;

2. where there are serious violations of the laws or regulations or the Statute of the institution or its internal rules, or

3. other measures undertaken in accordance with art. 44, are not sufficient to improve the financial situation.

(2) the election of the new governing body or of individual members, as well as the appointment of new members of the senior management personnel in the case of al. 1 and art. 44, para. 3, item 4 shall be carried out with the consent or approval of, respectively, after the competent authority and, where applicable, subject to the requirements and procedures of the law on credit institutions, accordingly to the law on markets in financial instruments.

Interim Manager

Art. 46. (1) where the competent authority according to the law on credit institutions, respectively, under the law on markets in financial instruments directive, considers that the application of the measures referred to in art. 44, para. 3, paragraph 4 and article. 45 is insufficient to improve the financial situation of the institution or of the branch of the institution from a third country or for the removal of breaches committed, he may appoint one or more natural persons for temporary managers of the institution.

(2) the Interim Manager is a natural person who, in the opinion of the competent authority has the qualifications, skills and knowledge necessary for the performance of their assigned functions and tasks, and complies with the requirements of art. 11, para. 1, item 1 and item 3-9 of the law on credit institutions, according to art. 11, para. 2 and 3 of the law on markets in financial instruments. The interim manager should not be filed with the institution or its relationship with the debtor, which give rise to reasonable doubts about his impartiality.

(3) the information and documents that prove the fulfilment of the requirements under paragraph 1. 2 shall be determined by an Ordinance of the BNB Ordinance respectively.

(4) the interim manager shall receive remuneration for their work on behalf of the institution, the amount of which shall be determined by the competent authority.

(5) upon appointment of temporary Manager approval requirement under art. 11, para. 3 of the law on credit institutions and in art. 11, para. 7 of the law on markets in financial instruments directive is not applicable.

(6) in appointing the competent authority may instruct the provisional Governor to work temporarily or instead of the steering body of the institution.

(7) upon appointment of temporary Manager to work with the steering body of the institution, with the Act of appointment, the competent authority shall determine the role, duties and powers of the provisional Governor, as well as requirements to the appropriate governing body of the institution to consult with him or to obtain its consent prior to taking specific decisions or to take concrete actions.

(8) the competent authority shall, without delay, submit to the relevant institution Act concerning the appointment of the temporary Governor and made publicly available on its website, where it has the power to represent the institution. Appointment of temporary Manager with powers to represent the institution is declared in the commercial register at the request of the competent authority.

(9) if the appointment of an interim manager to replace the steering body of the institution, with the Act of appointment, the competent authority shall determine its powers, which may include some or all of the powers of the steering body of the institution in accordance with its Statute and current legislation, including powers to exercise some or all of the administrative functions of the steering body of the institution.

(10) the Act of appointing the competent authority establishes the tasks of the provisional Manager, which may include the assessment of the financial situation of the institution, the management of the activity or part of the activity of the institution in order to protect or restore the financial situation and take measures to restore the sound and prudent management of the activities of the institution.

(11) the competent authority may at any time terminate the powers of the provisional Governor and appoint another in his place, as well as changes to its powers, tasks and other conditions of the appointment. The Act of the competent authority in these cases is not subject to appeal.

(12) the competent authority may, with the Act of appointment and any change of the terms of appointment to certain actions required by the interim manager should be carried out only after its prior consent. The Interim Manager may convene the general meeting of the shareholders or members and sets the agenda only with the prior consent of the competent authority.

(13) the competent authority may require by provisional Governor at the end of the period of his appointment, and periodically in accordance with the timetable set by it to prepare reports on the financial situation of the institution and on the actions taken during his tenure.

(14) the interim manager shall be appointed for a term of not more than one year. The competent authority may renew this period if there are still conditions of employment under para. 1, as in this case justifies the decision to shareholders.

(15) the appointment of temporary Manager on this article without prejudice to any other rights of the shareholders or members.

(16) the provisional Governor exercises its powers with the care of a good trader. He shall be liable only for damage caused by it.

(17) when there is appointed a temporary Manager, he can perform the functions and the quaestor under the Act on credit institutions, respectively, under the law on markets in financial instruments.

Coordination of measures for the early intervention and the appointment of temporary Manager in terms of groups, when BNB, respectively, the Commission is consolidating supervisor

Art. 47. (1) where it is consolidating supervisor and the conditions under art. 44, para. 1 or art. 46, para. 1 in the case of a parent undertaking of the European Union, the BULGARIAN NATIONAL BANK shall inform the Commission accordingly, EBA and consult with the other competent authorities involved in the supervisory Association.

(2) in the cases referred to in para. 1 after consultation with the members of the supervisory board the consolidating supervisor al. 1 apply a measure under art. 44, para. 3 or art. 46, para. 1 in the case of the parent undertaking by the European Union, taking into account the potential impact of the application of the measure on the subjects of the group in other Member States. The consolidating supervisor shall notify its decision to the members of the Supervisory Board and EBA.

(3) consolidating supervisor in the Al. 1 participate in consultation with the competent authority of a subsidiary company registered in another Member State, in cases where the relevant competent authority has notified the supervisor, that the conditions for the application of measures for early intervention or for the appointment of temporary Manager in respect of this subsidiary.

(4) in the cases referred to in para. 3 consolidating supervisor may evaluate the potential impact of the implementation of the measures for early intervention or for the appointment of temporary Manager in respect of the subsidiary, the group or the subjects of the group in other Member States. The consolidating supervisor shall inform the competent authority under paragraph 1. 3 the results of the assessment within three days of receipt of the notification.

(5) where at least two of the competent authorities of entities of the Group intend to implement measures for early intervention or to appoint temporary managers in respect of more than one institution in the group, the consolidating supervisor shall under para. 1 in cooperation with the competent authorities of these institutions evaluate opportunities for the appointment of a temporary Manager for all concerned entities of the group or for the coordinated implementation of the measures for the early intervention in order to more easily find a solution to restore the financial situation of the institution. The assessment is in the form of a joint decision, which shall be taken within 5 days of the date on which the consolidating supervisor has received a notification under paragraph 1. 3. The consolidating supervisor shall provide to the parent of European Union joint decision with the relevant reasoning.

(6) the consolidating supervisor or the competent authority of the College may seek assistance from the EBA in accordance with art. 31 of Regulation (EC) no 1093/2010 for reaching agreement under para. 5.

(7) in the event that, within the period referred to in paragraph 1. 5 joint decision is not reached, the consolidating supervisor al. 1 take a decision independently on the appointment of temporary Manager and for the application of the measure referred to in art. 44, para. 3 If you intend to apply such measures in respect of his company podnadzornoto.

(8) upon disagreement with a decision of which notice was given by a competent authority in respect of measures for early intervention or for the appointment of temporary Manager to a subsidiary, or where it has not reached a joint decision at para. 5, the consolidating supervisor may, in accordance with art. 19 (3) of Regulation (EC) no 1093/2010 to submit for consideration to the EBA question concerning:

1. application of the elements of the recovery plan corresponding to item 4, 10, 11 and 19 of annex 1;

2. the implementation of measures within the meaning of art. 44, para. 3, item 5 and 7.

Coordination of measures for the early intervention and the appointment of temporary Manager in terms of groups, when BNB, respectively, the Commission is the competent authority in respect of a subsidiary


Art. 48. (1) When the conditions under art. 44, para. 1 or under art. 46, para. 1 in the case of an institution, licensed in the Republic of Bulgaria, which is a subsidiary of the parent undertaking by the European Union, the BULGARIAN NATIONAL BANK shall inform the Commission accordingly, EBA and consult with a supervisor before it adopts a measure under art. 44, para. 3 or under art. 46, para. 1.

(2) the Bulgarian National Bank, respectively, the Commission shall apply the measures referred to in art. 44, para. 3 or under art. 46, para. 1 on the basis of the results of the evaluation of the supervisor and inform the supervisor, other members of the Supervisory Board and the EBA implemented measures.

(3) when the BNB, respectively, the Commission and the other competent authority intends to implement measures for the early intervention of at least two institutions, which are part of the Group and operate on the territory of the Republic of Bulgaria and of another Member State, the consolidating supervisor and the competent authority of the institution, licensed in the Republic of Bulgaria, together with the other relevant competent authorities shall take a joint decision, appreciating the opportunities for the appointment of a temporary Manager for all concerned entities of the group or coordinated implementation of measures for the early intervention in order to more easily find a solution to restore the financial situation of the institution.

(4) the Bulgarian National Bank, respectively, the Commission may request the assistance of the EBA in accordance with art. 31 of Regulation (EC) no 1093/2010 for reaching agreement under para. 3.

(5) where no joint decision is reached under paragraph 1. 3, BNB, respectively, the Commission, in a 5-day period alone decide on the appointment of temporary Manager at the institution, licensed in the Republic of Bulgaria, and for application of the measure referred to in art. 44, para. 3.

(6) upon disagreement with a decision of which is informed by the supervisor or by a competent authority in respect of measures for early intervention or for the appointment of temporary Manager to parent from the European Union, according to another entity of the group, or if no joint decision is reached under paragraph 1. 3, BNB, respectively, the Commission may, in accordance with art. 19 (3) of Regulation (EC) no 1093/2010 to submit for consideration to the EBA question concerning:

1. application of the elements of the recovery plan corresponding to item 4, 10, 11 and 19 of annex 1;

2. the implementation of measures within the meaning of art. 44, para. 3, item 5 and 7.

The implementation of art. 19 (3) of Regulation (EC) no 1093/2010

Art. 49. (1) the decisions of the Bulgarian National Bank and the Commission under art. 47 and 48 be motivated. They shall take into account the opinions and objections of the other competent authorities expressed during the consultations under art. 47, para. 1 or under art. 48, para. 1 or during the term of art. 47, para. 5 and art. 48, para. 5, as well as the potential impact of the decision on financial stability in the Republic of Bulgaria and the respective Member States.

(2) where, within the time-limits for making joint decisions, the issue of taking a measure has been referred for consideration to the EBA by the procedure of art. 47, para. 8 and art. 48, para. 6, the decision is postponed, and wait for the decision of the EBA. In this case the Commission, respectively, shall take a decision in accordance with the decision of the EBA.

(3) when the EBA does not take a decision under paragraph 1. 2 within three days, respectively, the Commission shall apply its decision in respect of the institution, which is the competent authority.

Chapter six

OBJECTIVES, CONDITIONS AND COMMON PRINCIPLES OF RESTRUCTURING

Objectives of restructuring

Art. 50. (1) the authority to restructure under art. 2 or under art. 3 apply the tools for restructuring and restructuring exercise the powers under this Act that are most relevant to the achievement of the objectives of the restructuring on a case by case basis.

(2) the objectives of the restructuring are:

1. ensuring the continuity of critical functions;

2. avoid significant adverse implications for financial stability, in particular by preventing their spread, including in market infrastructure, and by maintaining market discipline;

3. ensure the protection of public funds, shall be kept to a minimum as the dependence on the use of extraordinary public financial support, and its size;

4. protection of depositors, whose deposits are guaranteed under the conditions and pursuant to the law on deposit insurance in banks and investors whose claims subject to compensation under the title third, chapter five, section IV of the law on public offering of securities;

5. ensure the protection of the funds and assets of the customers.

(3) restructuring of the institution shall be performed at minimal cost and avoiding the loss of value, unless such costs and losses are necessary for attainment of the objectives of the restructuring.

(4) the objectives of the restructuring are equally important and appropriate authority restructuring should achieve a balance between them according to the nature and circumstances of each case.

Conditions for making a decision about restructuring

Art. 51. (1) the authority to restructure under art. 2 or under art. 3 decide to take action for the restructuring of the institution, when the following circumstances are simultaneously present:

1. today's finding that the institution is failing or is likely to become an issue in the joint report of the administrator "banking supervision" and the unit under art. 2, al. 2, when the institution is a Bank, according to a joint report of the governance Oversight of the investment activity and the unit under art. 3, al. 2 the Commission, when the institution is an investment firm;

2. in view of the urgency and other relevant circumstances at the discretion of the restructuring there is no real chance that alternative measures from the private sector, supervisory actions and measures for early intervention or devaluation, or the conversion of the respective equity instruments undertaken in respect of the institution, within a reasonable period of time to prevent the default;

3. the Act of restructuring is necessary in the public interest in accordance with para. 5.

(2) the implementation of early intervention measure pursuant to art. 44, para. 3 is not a condition for taking action on the restructuring.

(3) the Institution is failing or is likely to become a problem, if there is one or more of the following circumstances:

1. the institution has violated or may make an educated guess that you will commits an offence, with the result that it would no longer meets the conditions of the license in accordance with the law on credit institutions, accordingly with the law on markets in financial instruments, including, but not limited to, when the institution has suffered or is likely to incur losses, which will run out around her own funds or a substantial part thereof;

2. the value of the assets of the institution is less than the value of its obligations or may be done reasonably guess that in the near future the value of its obligations will exceed the value of its assets;

3. the institution has not implemented or can be done reasonably guess that in the near future will not be able to complete within one or more of the required obligations to its lenders;

4. reservation is an extraordinary public financial support with the exception of cases when such support is provided to overcome the serious disturbance in the economy of the country and to safeguard financial stability in one of the following forms:

and a State guarantee of newly issued) debt or liquidity support to the Bank;

(b)) the provision of equity or equity acquisition at prices and on terms which do not provide the advantage of the Bank – when in the granting of public financial support were not present the circumstances under items 1 – 3 or under art. 90, para. 1.

(4) the exceptions referred to in paragraph 1. 3, item 4 shall apply where the extraordinary public financial support meets the following conditions:

1. shall be only in respect of a solvent Bank in compliance with the law on State aid and the legal framework of the European Union for State aid and after a positive decision from the European Commission;

2. is there a preventive and temporary in nature and is proportionate to the purpose of dealing with the consequences of serious interference;

3. does not apply to compensate for the losses, which the Bank has suffered or is likely to suffer in the near future;

4. providing capital under para. 3, paragraph 4, letter "b" is the amount needed to cover capital shortages, established in the stress tests under art. 80 (b) of the law on credit institutions, committed to the banking system at European Union level, as well as in the reviews for the quality of the assets or equivalent stress tests and inspections carried out by the Bulgarian National Bank, the European Central Bank or by the EBA.

(5) public interest in action on restructuring under para. 1, item 3 occurs when the following conditions are met:

1. the taking of the action is necessary in order to achieve and is proportional to the one or more of the objectives of the restructuring and

2. the objectives of the restructuring may not be achieved to the same extent in the insolvency of the institution.

Conditions for the restructuring of financial institutions and holdings

Art. 52. (1) the appropriate authority restructuring may take action on restructuring in respect of a financial institution under art. 1, al. 1, item 3, in the event that the conditions for restructuring aid under art. 51 as regards both the financial institution and the parent undertaking falling within the scope of supervision on a consolidated basis.


(2) the appropriate authority restructuring may take action on restructuring in respect of the company under art. 1, al. 1, item 4 and 5, in the event that the conditions for restructuring aid in terms of both the company and in relation to one or more of the subsidiaries, which are institutions or when the subsidiary is in a third State and the competent authorities of that State are determined that the company meets the conditions for restructuring aid in accordance with their laws.

(3) for the purposes of the restructuring of the group, when the subsidiaries of the mixed-activity holding company are owned directly or indirectly by the interim financial holding company, the appropriate authority restructuring may take action on restructuring in respect of interim financial holding company, but not in relation to the mixed-activity holding company.

(4) subject to the Al. 3 the appropriate authority restructuring may take action with respect to restructuring the company under art. 1, al. 1, item 4 and 5 without for him to have met the conditions of restructuring, when one or more of the subsidiaries, which are institutions that meet the conditions of restructuring and their assets and obligations are such that the inability to perform their duties would jeopardise the institution or group as a whole and restructuring actions in respect of the company under art. 1, al. 1, item 4 and 5 are necessary for the restructuring of such subsidiaries or for the restructuring of the entire group.

(5) for the purposes of paragraphs 1 and 2. 2 and 4, at the assessment of the implementation of the conditions under art. 51, intra-group transfers of capital or of losses between one or several subsidiaries, which are institutions, including devaluation or conversion of equity instruments may not be recognized in the presence of an agreement, the Commission accordingly with the appropriate authority restructuring.

The basic principles governing the restructuring

Art. 53. (1) in applying the tools for restructuring and in the exercise of its powers under this Act to restructure the authority to restructure under art. 2 or under art. 3 takes decisions in compliance with the following principles:

1. the shareholders or members of an institution in restructuring mode first take losses;

2. the creditors of the Bank in restructuring mode take losses after shareholders pursuant to the order of satisfaction of claims according to art. 94, para. 1 of the law on Bank bankruptcy, creditors of the firm, respectively under the restructuring underwrite losses after the shareholders ' or members ' voting rights in accordance with the order of satisfaction of claims according to art. 722, para. 1 of the commercial code, unless this law provides otherwise;

3. the members of the Steering Body and the high management personnel of the institution in restructuring mode shall be released, except where the Authority considers that the restructuring in order to achieve the objectives of the restructuring is necessary, one or more of them to continue to exercise their powers;

4. the restructuring required by the members of the management organ and the high management personnel of the institution in restructuring mode to assist in achieving the objectives of restructuring;

5. the restructuring is taking action to search for civil, administrativnonakazatelna or criminal liability in accordance with the legislation in force by persons as a result of acts or omissions which the institution was unable to perform his duties;

6. creditors with claims on the same row receive equal treatment, unless this Act provides otherwise;

7. the creditors did not suffer greater losses than the losses that would be incurred if the institution or against the company under art. 1, al. 1, item 3-5 has been discovered insolvency proceedings in accordance with the safeguard mechanisms under art. 105-107;

8. the claims of depositors up to the amount of the guarantee in accordance with the law to guarantee bank deposits are fully protected;

9. in carrying out the restructuring actions apply protective mechanisms under Chapter Seventeen.

(2) if the institution is part of a group, the appropriate authority restructuring applied tools for restructuring and restructuring exercise the powers under this Act in such a way that the impact on other entities in the Group and the group as a whole, as well as adverse implications for financial stability in the European Union, the Member States, in which the Group operates, and in the other Member States are minimal.

(3) in applying the tools for restructuring and in the exercise of its powers under this Act, and the Ministry of finance, the Commission followed the framework of the European Union for State aid, where applicable.

(4) in applying the tools for restructuring under art. 56, item 1 – 3 in terms of institution or company under art. 1, al. 1, item 3-5 art. 123 of the labour code does not apply.

Chapter seven

EMERGENCY MANAGEMENT

Emergency Manager

Art. 54. (1) the authority to restructure under art. 2 or under art. 3 may appoint one or more natural persons for emergency managers, which replace the steering body of the institution in restructuring mode.

(2) Extraordinary Manager is a natural person who, in the opinion of the authority for the restructuring has qualifications, abilities and knowledge necessary for the performance of their assigned functions and tasks, and complies with the requirements of art. 11, para. 1, item 1 and item 3-9 of the law on credit institutions, where the institution is a Bank, respectively the requirements under art. 11, para. 2, items 1-4 and 6-10, para. 3 and art. 123, para. 2 of the law on markets in financial instruments, where the institution is an investment firm. Person appointed to temporary Manager of the institution, under the conditions and by the procedure of art. 46, para. 1 or Quaestor by the law on credit institutions, respectively, under the law on markets in financial instruments, can be mapped and for its extraordinary Manager. The extraordinary Manager does not have to be filed with the institution or its relationship with the debtor, which give rise to reasonable doubts about his impartiality. The information and documents that prove the fulfilment of the requirements shall be determined by an Ordinance of the Bulgarian National Bank, according to the Commission. The extraordinary Manager remuneration on account of the institution, the amount of which shall be determined by the authority for the restructuring.

(3) upon appointment of the emergency manager approval requirement under art. 11, para. 3 of the law on credit institutions, where the institution is a Bank, respectively, under art. 11, para. 7 of the law on markets in financial instruments, where the institution is an investment firm shall not apply.

(4) the appointment of the emergency Manager is announced in the trade register at the institution at the request of the authority, to restructure and be made publicly available on his website.

(5) upon appointment of the Governor the exercise of extraordinary powers of the shareholders or members and the steering body of the institution shall be suspended, unless they are not stopped, and they shall be exercised by the extraordinary Manager under the control of the authority for the restructuring.

(6) the extraordinary Manager is obliged to take all necessary measures and actions to achieve the objectives of the restructuring and to realize the restructuring actions in accordance with the decision of the authority for the restructuring. This obligation involves taking all the measures and actions that are required in accordance with the instruments of restructuring, and takes precedence over any other obligation of the management organ under the statutes or instrument of incorporation of the institution or the legislation in force in the event of any discrepancy between them.

(7) the authority to restructure may impose restrictions on the activities of the extraordinary Governor, including prior consent for certain of his actions.

(8) the authority may exempt restructuring extraordinary Manager at any time.

(9) the authority may require the restructuring of extraordinary Governor at the end of the period of his appointment, and periodically in accordance with the timetable set by it to prepare reports on the economic and financial situation of the institution and on the actions taken in the performance of his duties.

(10) the extraordinary Manager is appointed for a term not exceeding one year. The restructuring could renew that period if there are still conditions of his appointment.

(11) where the authority shall take a decision on restructuring al. 1 in the case of an institution which is part of the group, he can consult with authorities for the restructuring of other entities of the group, which provides a similar measure, in order to assess whether it is more appropriate to appoint the same extraordinary Manager for all relevant actors to facilitate decision making to restore the financial stability of the respective entities.

(12) the extraordinary Manager exercises its powers within the limits laid down in this article and the good care of. He shall be liable only for damage caused by it.

Chapter eight

EVALUATION

Evaluation for the purposes of the restructuring

Art. 55. (1) before taking action on the restructuring or to exercise the power of compounding or convert equity restructuring authority under art. 2 or under art. 3 provides an evaluation of the assets and liabilities of the institution or the company under art. 1, al. 1 3-5 of a person who is independent of the public authorities, by the authority, as well as the restructuring of the institution or company. Assets and liabilities are evaluated fairly, conservative and realistic.

(2) the assessment under paragraph 1. 1 is final, subject to the requirements of this article.


(3) where it is not possible to conduct an independent assessment under paragraph 1. 1, the authority may carry out restructuring temporary assessment of the assets and the liabilities of the institution or the company under art. 1, al. 1, item 3-5 in accordance with para. 12 and 13.

(4) the objective of the assessment under paragraph 1. 1 or al. 3 is to assess the value of the assets and liabilities of the institution or the company under art. 1, al. 1, item 3 – 5 eligible for restructuring.

(5) the assessment under paragraph 1. 1 or al. 3 is designed to provide:

1. information whether the conditions for restructuring aid under art. 51, para. 1 or the conditions of depreciation or conversion of the equity instruments granted under art. 89;

2. data for deciding on appropriate action on restructuring, which the authority to undertake restructuring in terms of institution or company under art. 1, al. 1, item 3-5, if the conditions for restructuring;

3. data to determine the extent of the withdrawal or reduction of the proportion of the capital of existing shares or units, as well as the degree of depreciation or conversion in the implementation of the restructuring of the power of compounding or conversion of the respective equity instruments;

4. data for making decision about the extent of depreciation or converting eligible obligations in the implementation of the restructuring of the share of losses;

5. data for making decision on the assets, rights, obligations or instruments of property to be transferred, as well as the decision on the amount of consideration that is due to the institution of the restructuring regime or its shareholders or members or holders of other instruments for the property, in implementation of the restructuring of the Bridge institution "or a tool for differentiation of assets;

6. data for making decision on the assets, rights, obligations or instruments of property to be transferred, and for the formation of the Authority's assessment of restructuring in the determination of trade conditions under art. 58, para. 3 in applying the instrument of sale of business;

7. confirmation that all losses on the assets of the institution or the company have been fully recognized at the time of application of the instruments of restructuring or the exercise of the power of compounding or conversion of the equity instruments granted.

(6) the assessment under paragraph 1. 1 or al. 3 is based on conservative assumptions, including with respect to the levels of non-compliance with the obligations to the institution or company under art. 1, al. 1, item 3-5 and the amount of losses. In the evaluation, no account shall be taken of the consequences of the possible future provision of extraordinary public financial support or an extraordinary facility of a fixed amount of the Central Bank, of a fixed amount or facility from the Central Bank, which is available on non-standard conditions of security, maturity and interest rate of the institution or company from the moment that the authority take action on restructuring or restructuring exercise the power of compounding or conversion of the equity instruments granted.

(7) the assessment under paragraph 1. 1 or al. 3 recognises that in the implementation of the instrument for restructuring:

1. the authority to restructure, the Fund for guaranteeing bank deposits (FGVB) and the Fund for the compensation of investors (FKI) are refunded by the institution under the restructuring carried out reasonable expenses under the terms of art. 57, al. 6;

2. when using funds from the PBF, FPIP respectively, FGVB, FKI, respectively, may charge interest and fees in connection with any loans or guarantees granted to the institution in restructuring mode.

(8) the assessment under paragraph 1. 1 or al. 3 shall be supplemented by the following information from the accounts of the institution or the company under art. 1, al. 1.3-5:

1. current balance and report on the financial situation of the institution or company;

2. analysis and estimate of the accounting value of the assets;

3. list of recognised accounting balance sheet and off-balance-sheet liabilities of the institution or company, in which they set out their respective claims according to the applicable legislation on bankruptcy.

(9) where appropriate, for the provision of information under para. 5. (5) and (6) the information referred to in para. 8, item 2 shall be supplemented by analysis and estimate of the market value of the assets and liabilities of the institution or the company under art. 1, al. 1, item 3 – 5.

(10) the assessment under paragraph 1. 1 or 3 includes the Division of creditors in separate classes in accordance with their order of claims under applicable insolvency law and assessment of losses that each class of shareholders or creditors would have suffered in bankruptcy proceedings.

(11) the assessment under paragraph 1. 10 do not affect the performance of an assessment under art. 106, para. 1.

(12) except in the case referred to in paragraph 1. 3 interim evaluation shall be carried out and where, for reasons of urgency, it is not possible to fully comply with the requirements of para. 8 and 10.

(13) the temporary score under par. 12 includes and properly justified assumption of additional losses.

(14) the assessment under paragraph 1. 3 and 12 are considered temporary until an independent person in al. 1 did not evaluate which complies with all the requirements of this article. This ex-post final evaluation shall be carried out as soon as is practicable. The final evaluation can be carried out separately from the assessment in art. 106, para. 1 or at the same time and by the same independent person.

(15) the subsequent final score under par. 14 aims to:

1. to ensure that all losses on the assets of the institution or company under art. 1, al. 1, item 3 – 5 are fully recognised in the balance sheet and statement of income of the institution or company;

2. to provide data for deciding to increase the claims of creditors or the amount of the consideration in the application of para. 16.

(16) in the event that, in accordance with the subsequent final evaluation value of the net assets of the company or institution under art. 1, al. 1, item 3-5 is greater than the value in accordance with the interim assessment, restructuring authority may:

1. to exercise its power to increase the amount of the claims of creditors or of the owners of the respective equity instruments that have been impaired in the implementation of the instrument for the sharing of losses;

2. to instruct the mostovata institution or asset management company to make additional consideration as follows:

(a)) in relation to the transferred assets, rights and obligations – for the benefit of the institution in restructuring mode, or

(b)) in relation to the transferred property instruments – for the benefit of shareholders, members or holders of other instruments of ownership.

(17) the presence of a temporary score under par. 3 and 12 is reason enough to restructure the authority to take action on the restructuring, including to take control of the troubled institution or company under art. 1, al. 1, item 3-5 or to exercise its powers for the devaluation or conversion of the equity instruments granted.

(18) the valuation of assets and liabilities is an integral part of the solution to be applied by the authority to restructure or restructuring tool for exercising the power to restructure or of the decision to exercise the power of compounding or conversion of the equity instruments granted. The assessment may be appealed only together with the decision in accordance with art. 117.

Chapter nine

GENERAL PRINCIPLES OF INSTRUMENT-S FOR RESTRUCTURING

Types of restructuring tools

Art. 56. restructuring tools are:

1. the Instrument for sale of business;

2. the Tool "Bridging institution";

3. Tool for differentiation of assets;

4. Tool to share losses.

General principles of application of the instruments of restructuring

Art. 57. (1) the authority to restructure under art. 2 or under art. 3 exercising powers provided for in this law for the application of instruments of restructuring to an institution or a company under art. 1, al. 1, item 3 – 5 eligible for restructuring.

(2) where the authority decides to apply for restructuring tool for restructuring to an institution or a company under art. 1, al. 1, item 3-5 and this action on the restructuring would lead to losses for creditors or to convert their claims, he exercised the power of compounding or equity conversion under art. 89 immediately before or simultaneously with the implementation of the instrument for the restructuring.

(3) the authority may apply to the restructuring restructuring tools separately or in combination. The tool for the differentiation of assets only applies in combination.

(4) where the tools are used only for restructuring under art. 56, paragraphs 1 and 2, and they are used to transfer only the parts of the assets, rights or obligations of the company under art. 1, al. 1, item 3-5 under the restructuring, the residual part of the institution or the company from which the assets are transferred, the rights or obligations shall be suspended in accordance with the applicable insolvency proceedings.

(5) the proceedings referred to in para. 4 shall be carried out within a reasonable period, taking into account the need for the institution or company under art. 1, al. 1, item 3-5 to provide services or facilities under art. 96, in order to enable the transferee to continue the activities or services acquired through the transfer, or any other basis, and it is therefore necessary the preservation of the remaining part of the institution or company under art. 1, al. 1, item 3-5, in order to achieve the objectives of the restructuring or to comply with the principles of restructuring.


(6) all reasonable expenses incurred by the authority for the restructuring of FGVB when using the PBF from FKI when using FPIP and by the Ministry of finance in connection with the implementation of the instruments or the exercise of powers to restructure or with application of State financial stabilization tools, subject to reimbursement of the body or Fund in any of the following ways:

1. being deducted from the consideration paid by the transferee for the benefit of the institution in restructuring mode or for the benefit of its shareholders or other owners of the property;

2. from the institution in restructuring mode, privileged claims, and/or

3. from the proceeds resulting from the termination of the mostovata institution or company for asset management, as a privileged claims.

(7) Bulgarian legislation in the field of insolvency law relating to invalidity of actions and transactions and the lack of enforceability of legal acts which harm the sector creditors, including, but not limited to art. 60 of the law on bank insolvency and art. 646 and 647 of the commercial code, shall not apply in respect of a transfer of assets, rights or liabilities of the institution in restructuring mode to another person by the application of an instrument for restructuring or restructuring exercise of power, or through the use of State financial stabilization.

(8) in a situation of systemic crisis may propose to the Minister of finance to be granted funding for the Bank in restructuring mode through the use of public tools for financial stabilization under Chapter fourteen, if the following conditions are met:

1. shareholders, holders of other instruments of ownership of the respective equity instruments and the creditors of the bank liabilities more acceptable mode of restructuring have made losses amounting to at least 8 percent of total liabilities, including the Bank's equity in restructuring mode, calculated at the time of the Act of restructuring on the basis of the assessment provided by the art. 55, through the cancellation of shares, devaluation and conversion of debt or otherwise;

2. funding is provided in accordance with the law on State aid and the legal framework of the European Union for State aid and after a positive decision by the European Commission.

Chapter ten

TOOL FOR SALE OF BUSINESS

Tool for sale of business

Art. 58. (1) the authority to restructure under art. 2 or under art. 3 may decide to transfer the potential buyer, who was not on the bridge institution:

1. instruments of ownership issued by the institution in restructuring mode;

2. all or part of the assets, rights or obligations of the institution in restructuring mode.

(2) subject to the Al. 8-10 and in accordance with art. 117 the transfer under paragraph 1. 1 is carried out, without requiring the consent of the shareholders or associates of the institution in the restructuring regime or of a third person other than the buyer. The transfer shall not apply restrictions arising from the commercial law or the law for public offering of securities. The transfer is carried out in accordance with the requirements of art. 59.

(3) the transfer under paragraph 1. 1 shall be carried out by the authority to restructure on commercial terms, which in the nearest possible match the work carried out pursuant to article 13. 55 evaluation, and is in line with specific circumstances, subject to the requirements of the law on State aid and the legal framework of the European Union for State aid.

(4) in accordance with the art. 57, al. 6 any consideration paid by the buyer, is in favour of:

1. the shareholders or members, when the sale of the business is done by transferring property instruments, issued by the institution under the restructuring, by their owners to the buyer;

2. the institution in restructuring mode, when the sale of the business is accomplished through full or partial transfer of the assets or liabilities of the institution in restructuring mode of the buyer.

(5) when using the instrument of sale of business restructuring authority may exercise their powers for repeatedly transferring and carry out the subsequent transfers of instruments of ownership issued by the institution in the restructuring regime or its assets, rights or obligations.

(6) when using the instrument of sale of business restructuring authority may exercise its powers in respect of the transfer of assets, rights or liabilities transferred to the buyer, in order to reverse their transfer institution in restructuring mode, or in respect of the instruments for the purpose of property otherwise transferred to their original owners. In these cases the institution in restructuring mode and original owners are obliged to take back the transferred assets, rights or obligations or shares or other instruments of ownership. This transfer is carried out with the consent of the buyer, which may be given in the implementation of the instrument for sale of business or after.

(7) the potential customer under para. 1 shall hold the required licence for the carrying out of the business that acquires.

(8) where a transfer of property tools as a result of the application of the sale of the business would result in the acquisition or increase of a qualifying holding in an institution, BNB, respectively, Vice-President of the Commission, supervising Management Oversight of the investment activity, "promptly act on applications, notifications, respectively, by the order of art. 28 – 34 of the law on credit institutions, respectively, under art. 26B and 26 c of the law on markets in financial instruments, in order not to put off the implementation of the instrument or impede the attainment of the relevant objectives of the restructuring by the action on the restructuring.

(9) in the event that, at the date of application of the instrument of sale of business, the competent authority has not acted in accordance with art. 28 – 34 of the law on credit institutions, according to art. 26B and 26 c of the law on markets in financial instruments:

1. the transfer of the instruments of property in favour of the transferee shall take effect immediately;

2. the time limits referred to in art. 28 – 34 of the law on credit institutions, respectively, under art. 26B and 26 c of the law on markets in financial instruments, and in the period of sale under para. 10, paragraph 2, point (b), the transferee may benefit from the resultant shares entitled to vote, and it shall be granted for the restructuring of the authority; the restructuring is not obliged to exercise it and is not responsible or liable for the exercise or refraining from the exercise of the right to vote;

3. within the time limit under art. 28 – 34 of the law on credit institutions, respectively, under art. 26B and 26 c of the law on markets in financial instruments, and in the period of sale under para. 10, paragraph 2, point (b), respectively, Vice-President of the Commission, supervising the management of the investment activity "control", or the Commission, does not impose in respect of the transferred property instruments surveillance measures and penalties for violations of the requirements for the acquisition or disposal of a qualifying holding under art. 103, para. 2, art. 152 and 153 (b) of the law on credit institutions, respectively, under art. 118, para. 1 and art. 127 of the law on markets in financial instruments.

(10) the Bulgarian National Bank, respectively the Commission shall notify the transferee for the purpose of issuing the approval or refusal in accordance with the arrangements provided for in the law on credit institutions, according to the law on markets in financial instruments, such as occur the following consequences:

1. If the competent authority has approved the transfer to the transferee of the instruments of property from the date of receipt of the notification the limitations on the exercise of the right to vote under para. 9, item 2 shall be terminated;

2. If the competent authority of the transferee declines to acquire the tools of property:

a) the right to vote on them continues to be exercised by the authority to restructure the terms of para. 9, item 2;

(b) restructuring) the authority may require the transferee to sell proprietary tools within a period specified by it, which takes into account the current market conditions, and

in) where the transferee does not sell in (b), the competent authority of the law on credit institutions, respectively, under the law on markets in financial instruments directive, the transferee may apply the supervisory measures and penalties for violations of the requirements for the acquisition or disposal of a qualifying holding pursuant to art. 103, para. 2, art. 152 and 153 (b) of the law on credit institutions, respectively, under art. 118, para. 1 and under art. 127 of the law on markets in financial instruments.

(11) when transferring through the sale of business apply protective mechanisms under Chapter Seventeen.

(12) the shareholders or creditors of the institution in restructuring mode and third parties whose assets, rights or obligations are not transferred, have no rights in respect of the transferred assets, rights or obligations other than those provided for under para. 11.


(13) for the purposes of the exercise of the right to provide services, or for the establishment in the Republic of Bulgaria in accordance with section II, chapter three of the law on credit institutions and the law on markets in financial instruments, it is assumed that the buyer of the institution for which the tool is applied to the sale of the business of the authority in a Member State for the restructuring, is a successor of the institution in restructuring mode and may continue to exercise the rights exercised by it before applying the instrument of sale of business in respect of the transferred assets, rights or obligations.

(14) the purchaser under para. 1 may continue to exercise membership rights and the right of access of the institution in restructuring mode to payment systems and clearing and settlement systems, regulated market, FKI and FGVB, provided it continues to meet the applicable criteria for participation or membership.

Tool for sale of business: procedural requirements

Art. 59. (1) When applying the instrument of sale of business in terms of institution or company under art. 1, al. 1, item 3-5, the authority to restructure under art. 2 or under art. 3 marketed or arrange the marketing of assets, rights, obligations or instruments of the property of the institution or company who intends to transfer.

(2) Packages of rights, assets and obligations under para. 1 may be placed on the market separately.

(3) the placing on the market referred to in paragraph 1. 1 shall be made in accordance with the following principles:

1. supply is transparent as possible without any major irregularities in the presentation of assets, rights, obligations or instruments of ownership restructuring authority intends to transfer under the circumstances, and in particular in view of the need to maintain financial stability;

2. no favors or discriminates unreasonably potential buyers;

3. does not take place in a context of conflict of interest;

4. does not create unfair advantages for a specific potential buyer;

5. in line with the need for rapid implementation of the action on the restructuring;

6. is designed to achieve the highest possible selling price for the relevant instruments of the property, assets, rights or obligations;

7. where applicable, the supply is carried out in compliance with the requirements of the law on State aid and the legal framework of the European Union for State aid.

(4) the principles referred to in paragraph 1. 3 do not preclude the restructuring authority to propose concrete potential buyers, insofar as this does not violate the requirements of para. 3, item 2.

(5) the public disclosure of the placing on the market referred to in paragraph 1. 1, which is required in accordance with art. 17 (1) of Regulation (EC) no 596/2014 of the European Parliament and of the Council of 16 April 2014, on market abuse (Regulation on market abuse) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Council directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ L 173/1 of 12 June 2014) may be deferred in accordance with art. 17, (4) or (5) of this regulation.

(6) the authority to restructure may apply the instrument of sale of business, without the requirement to keep the market under para. 1, when it considers that compliance with this requirement can prevent one or more objectives of the restructuring, and in particular if it considers that:

1. There is a substantial risk to financial stability, caused or made worse by failure or possibly fulfil obligations to the institution in restructuring mode;

2. compliance with the requirement under paragraph 1. 1 can reduce the effectiveness of the sale of the business to avoid this danger, or to achieve the objective of restructuring under art. 50, para. 2, item 2.

Chapter Eleven

INSTRUMENT BRIDGE INSTITUTION "

Instrument bridge institution "

Art. 60. (1) the authority to restructure under art. 2, respectively, under art. 3, may decide to transfer to the bridge institution, in order to preserve its critical functions, transferred to:

1. instruments of ownership issued by the institution in restructuring mode;

2. all or part of the assets, rights or obligations of the institution in restructuring mode.

(2) in compliance with the art. 117 the transfer under paragraph 1. 1 may be carried out without the consent of the shareholders or members of the institution in restructuring mode or a third party, other than a mostovata institution. In the cases referred to in para. 1 limits resulting from the commercial law or the law for public offering of securities, shall not apply.

(3) in the application of the Bridging institution "for each individual institution in restructuring mode creates a separate bridge institution, unless the institution is a financial holding company mostovata established and functioning in accordance with art. 63.

(4) in applying the tool "Bridging institution" the total value of the obligations transferred to the mostovata institution, may not exceed the total value of the assets and rights transferred by the institution in restructuring mode or from other sources.

(5) in accordance with the art. 57, al. 6 any consideration paid by the mostovata institution, is in favour of:

1. holders of instruments of ownership when mostovata is transferred to the institution of property tools issued by the institution under the restructuring of their owners;

2. the institution in restructuring mode when performing full or partial transfer of the assets or liabilities of the institution in restructuring mode to the mostovata institution.

(6) upon the application of the Bridging institution "for restructuring the authority may exercise its powers several times to transfer, and you can perform subsequent transfers of instruments of ownership issued by the institution in restructuring mode, or its assets, rights or obligations.

(7) after application of the Bridge institution "restructuring authority may:

1. to transfer rights, assets or liabilities of the institution of mostovata back the institution in restructuring mode or instruments of ownership back to their original owners; in these cases the institution in restructuring mode or original owners are obliged to accept them back, subject to the requirements of para. (8);

2. to transfer ownership of tools or assets, rights or obligations of the mostovata institution to a third party.

(8) the authority may make restructuring any time transfer by al. 7, item 1 in the presence of one of the following circumstances:

1. the decision under paragraph 1. 1 and in the contract under which the transfer is expressly provided for the possibility of a transfer back to certain instruments of property or assets, rights, obligations;

2. the instruments of property, assets, rights, obligations, do not fall within the classes or do not qualify for transfer laid down in the decision referred to in para. 1 the transfer.

(9) in the transfers between the institution in restructuring mode or the original owners of the instruments of property, on the one hand, and the mostovata institution, on the other hand, apply protective mechanisms under Chapter Seventeen.

(10) the shareholders or members, or the creditors of the institution in restructuring mode and third parties whose assets, rights or obligations are not transferred to the mostovata institution, may not bring claims in respect of the transferred assets, rights or obligations, as well as in terms of senior management staff and the steering body of the mostovata institution, other than those provided for safeguards under Chapter Seventeen.

(11) for the purposes of the exercise of the right to provide services, or for the establishment in the Republic of Bulgaria in accordance with section II, chapter three of the law on credit institutions or the law on markets in financial instruments it is assumed that the bridge institution of a Member State is the successor of the institution concerned in restructuring mode and may continue to exercise its rights in respect of the transferred assets , rights or obligations.

(12) the Mostovata institution, including that of the Member State may continue to exercise membership rights and the right of access of the institution in restructuring mode to payment systems and clearing and settlement systems, regulated market, FKI and FGVB, provided that the institution in restructuring mode meets the applicable criteria for participation or membership.

(13) Mostovata institution has no obligation and is not liable to the shareholders or members, or the creditors of the institution in restructuring mode. The governing body or the high management personnel of mostovata institution shall not be liable to the shareholders or members and the institution's creditors in restructuring mode for any act or omission in the performance of their duties, unless the action or inaction does not involve gross negligence or a material breach, which directly affects the rights of the shareholders or creditors.

(14) Mostovata institution can be a bridge Bank, Mostow Mostow firm or a financial holding company.

Establishment and operation of the bridge Bank

Art. 61. (1) the Mostovata Bank is a legal entity, which shall be established by the FGVB as a joint stock company and meet the following requirements:

1. the capital of the mostovata Bank is financed entirely with funds from the PBF;

2. control of the BANK, including after applying the tool to share the losses, for the purposes of art. 65, para. 1, item 2;


3. it was created in order to acquire and hold all or part of the assets, rights and obligations of the Bank in restructuring mode in order to maintain access to customers of the Bank in restructuring mode to critical functions and subsequent sale of the Bank.

(2) Mostovata Bank operates in accordance with the following requirements:

1. the statutes of the mostovata Bank is approved by the BANK in its capacity as the authority to restructure under art. 2, al. 1;

2. the Board of Directors of the mostovata Bank is approved by the BANK in its capacity as the authority to restructure under art. 2, al. 1;

3. The Bulgarian National Bank in its capacity as the authority to restructure under art. 2, al. 1 approved the emoluments of the members of the Board of Directors and has defined their responsibilities;

4. The Bulgarian National Bank in its capacity as the authority to restructure under art. 2, al. 1 has approved the strategy and risk profile of the Bank mostovata;

5. mostovata Bank is licensed in accordance with the requirements of the law on credit institutions, including in respect of the activities or services that acquire;

6. mostovata Bank meets the requirements and is subject to supervision by the NATIONAL BANK according to the law on credit institutions, Regulation (EC) no 575/13 and, where applicable, comply with the requirements and is subject to supervision by the financial supervision Commission in accordance with the law on markets in financial instruments;

7. the activity of the mostovata Bank shall be carried out in accordance with the legal framework of the European Union for State aid and the BULGARIAN NATIONAL BANK in its capacity as the authority to restructure under art. 2, al. 1 may provide appropriate restrictions on its activities.

(3) Proposals by al. 2, t. 1-3 shall be drawn up by the Management Board of FGVB and shall be submitted to the BANK for approval. The proposals under para. 2, item 4 shall be made by the Board of Directors of the mostovata Bank. Applications for the issue of a licence referred to in paragraph 5 and to the approved under the Act on credit institutions shall be submitted by the Governing Board of the FGVB.

(4) where it is necessary for the purposes of restructuring the unit under art. 2, al. 2 can offer a licence for the operation of the Bank by mostovata al. 2, item 5, she meets all the requirements under the Act on credit institutions and the law on markets in financial instruments. In this case, the BANK in its capacity as competent authority under the Act on credit institutions may grant authorisation, provided that indicate the short time in which the mostovata Bank is required to achieve full compliance with the requirements of the law on credit institutions and the law on markets in financial instruments.

(5) the Board of directors manages the mostovata Bank in order to preserve access to critical features and subsequent sale of the Bank, as well as its assets, rights or obligations of one or more private buyers under the right conditions, at the latest within two years from the date of the last transfer of bank restructuring mode by using the "Bridge Bank". This period may be extended by the BNB under the conditions of paragraphs 1 and 2. 9.

(6) action on sale of mostovata Bank or its assets, rights or obligations shall be made subject to the following conditions:

1. free and transparent market;

2. lack of substantive errors in the presentation of assets and liabilities;

3. the sale does not benefit or not unduly penalizes prospective buyers;

4. the sale is carried out on commercial terms in accordance with the requirements of the law on State aid and the legal framework of the European Union for State aid;

5. compliance with the rules and the legal framework of the European Union in the field of competition.

(7) the Bulgarian National Bank in its capacity as the authority under art. 2, al. 1 decide that legal persons established pursuant to a decision under art. 60, para. 1, ceases to be a tool "Bridge Bank" within the meaning of para. 1 in the event of any of the following circumstances:

1. a merger or acquisition of mostovata Bank with another person;

2. mostovata Bank ceases to meet the requirements of para. 1;

3. sell all or essential for the business assets, rights or obligations of the Bank of mostovata third person and taken action on the termination of the Bank;

4. after the expiry of the time limit referred to in paragraph 1. 5 and 8 or when applicable, under para. 9;

5. the procedure of liquidation of the Bank mostovata is over; the assets are completely eradicated, and obligations fully repaid.

(8) unless the circumstances have occurred under para. 7, t 1 – 3, Bulgarian National Bank as the restructuring authority under art. 2, al. 1 decide on the termination of the activity of the mostovata Bank as soon as possible, but no later than the expiry of the Al. 5.

(9) the Bulgarian National Bank may extend the period referred to in paragraph 1. 8 for one year, including repeatedly, if such an extension:

1. contributes to the achievement of the results referred to in paragraph 1. 7, t 1 – 3 or 5, or

2. is necessary to ensure the continuity of basic banking or financial services.

(10) the decision of the Bulgarian National Bank in al. 9 for extension is motivated and contains a detailed assessment of the situation, including market conditions, and prospects for mostovata Bank, justifying the extension.

(11) where the activity of the mostovata Bank is terminated as a result of circumstances under para. 7, item 3 or item 4, mostovata Bank is liquidated pursuant to chapter twelve of the law on credit institutions.

(12) in accordance with the art. 57, al. 6 the proceeds obtained as a result of the liquidation under para. 11 of the mostovata Bank, are in favor of the PBF, except if, in the course of the liquidation is not established insolvency.

Establishment and functioning of the firm s

Art. 62. (1) the Mostoviât firm is a legal person shall be established by the FKI and meets the following requirements:

1. the capital of a firm is financed entirely with funds from FPIP;

2. the control of the Commission as a body for restructuring under art. 3, al. 1, including after applying the tool to share the losses, for the purposes of art. 65, para. 1, item 2;

3. it was created in order to acquire and to hold all or part of the assets, rights and obligations of the investment firm in restructuring mode in order to maintain access to the clients of the investment firm in restructuring mode to critical functions and subsequent sale of the investment firm.

(2) Mostoviât firm operates in accordance with the following requirements:

1. the statutes of a firm is approved by the Commission in its capacity as the authority to restructure under art. 3, al. 1;

2. the managing authority of a firm is approved by the Commission in its capacity as the authority to restructure under art. 3, al. 1;

3. the Commission in its capacity as the authority to restructure under art. 3, al. 1 approved the emoluments of the members of the governing body (Board of Directors) and has defined their responsibilities;

4. the Commission in its capacity as the authority to restructure under art. 3, al. 1 has approved the strategy and risk profile of a firm;

5. mostoviât firm is licensed in accordance with the requirements of the law on markets in financial instruments, including in respect of the activities or services that acquire;

6. mostoviât firm meets the requirements and is subject to supervision by the Commission in accordance with the law on markets in financial instruments directive and Regulation (EC) no 575/2013;

7. the activities of a firm shall be carried out in accordance with the legal framework of the European Union for State aid and restructuring the authority under art. 3, al. 1 may lay down appropriate limits on his activities.

(3) Proposals by al. 2, item 1, 2 and 3 shall be drawn up by the Management Board of FKI and shall be submitted to the Commission for approval. The proposals under para. 2, item 4 shall be made by the management body of a firm. Applications for the issue of a licence referred to in paragraph 5 and to the approved under the law on markets in financial instruments shall be submitted by the Governing Board of the FKI.

(4) where it is necessary for the purposes of restructuring the unit under art. 3, al. 2 can offer a licence for activities of a firm under para. 2, item 5, she meets all the requirements under the law on markets in financial instruments. In this case, the Commission in its capacity as competent authority under the law on markets in financial instruments shall be entitled to issue the license, provided that indicate the short time in which mostoviât firm is required to achieve full compliance with the requirements of the law on markets in financial instruments.

(5) the managing authority manages a firm in order to preserve access to critical features and subsequent sale of the firm, as well as its assets, rights or obligations of one or more private buyers under the right conditions, at the latest within two years from the date of the last transfer of investment firm in restructuring mode through the instrument ' S firm ". This period may be extended by the Commission under the terms of para. 9.

(6) action on the sale of a firm or its assets, rights or obligations shall be made subject to the following conditions:

1. free and transparent market;

2. lack of substantive errors in the presentation of assets and liabilities;

3. the sale does not benefit or not unduly penalizes prospective buyers;

4. the sale is carried out on commercial terms in accordance with the requirements of the law on State aid and the legal framework of the European Union for State aid;

5. compliance with the rules and the legal framework of the European Union in the field of competition.

(7) the Commission in its capacity as the authority to restructure under art. 3, al. 1 decide that legal persons established pursuant to a decision under paragraph 1. 1, ceases to be a tool "Mostow mediator ' within the meaning of para. 5 in the event of any of the following circumstances:

1. a merger or acquisition of Mostow firm with another person;


2. mostoviât firm ceases to meet the requirements of para. 1;

3. sale of some or all of the essential activity, assets, rights or obligations of the intermediary bridge to a third party and are acted upon by the dissolution of the firm;

4. after the expiry of the time limit referred to in paragraph 1. 5 and 8 or when applicable, under para. 9;

5. the procedure of liquidation of a firm is ended; the assets are completely eradicated, and obligations fully repaid.

(8) unless the circumstances have occurred under para. 7, items 1-3, the Commission as a body for restructuring under art. 3, al. 1 decide on the termination of the activities of a firm as soon as possible, but no later than the two-year period referred to in paragraph 1. 5.

(9) the Commission may extend the period referred to in paragraph 1. 8 for one year, including repeatedly, if such an extension:

1. contributes to the achievement of the results referred to in paragraph 1. 7, t 1 – 3 or 5, or

2. is necessary to ensure the continuity of basic financial services.

(10) the decision of the Commission under para. 9 for extension is motivated and contains a detailed assessment of the situation, including market conditions and prospects for a mediator, justifying the extension.

(11) When the business of a firm is terminated as a result of circumstances under para. 7, item 3 or item 4, it shall be liquidated in accordance with the relevant provisions of the law on markets in financial instruments and commercial law.

(12) in accordance with the art. 57, al. 6 the proceeds obtained as a result of the liquidation under para. 11 of a firm for the benefit of its shareholders or owners of the shares, unless in the course of the liquidation is not established insolvency.

Mostow's financial holding company

Art. 63. (1) the Mostoviât financial holding company shall be set up by FGVB, respectively of FKI, and meets the following requirements:

1. the capital of a financial holding is financed entirely with funds from the PBF, FPIP respectively;

2. the control of the appropriate authority restructuring, including after the application of the tool for sharing the losses, for the purposes of art. 65, para. 1, item 2;

3. it was created in order to acquire and hold all or part of the shares and other instruments of ownership issued by one or more institutions in restructuring mode, in order to maintain access to the customers of institutions in restructuring mode to critical functions and subsequent sale of the institutions.

(2) Mostoviât financial holding company operates in accordance with the following requirements:

1. the statutes or instrument of a financial holding company has been approved by the authority for restructuring;

2. the managing authority of a financial holding company has been approved by the authority for restructuring;

3. the restructuring is approved the remuneration of the members of the governing body and has defined their responsibilities;

4. the authority has approved the restructuring strategy and risk profile of a financial holding company;

5. mostoviât financial holding company satisfies the requirements of the law on credit institutions, accordingly to the law on markets in financial instruments; in cases where a financial holding company mostoviât was created for the acquisition of shares and other instruments of ownership issued by the Bank in restructuring mode, it shall be entered in the register under art. 3 (a) of the law on credit institutions;

6. mostoviât financial holding company complies with the requirements and is subject to supervision by the NATIONAL BANK according to the law on credit institutions, respectively, by the Commission, in accordance with the law on markets in financial instruments, Regulation (EC) no 575/2013;

7. the business of a financial holding company shall be carried out in accordance with the legal framework of the European Union for State aid and restructuring the authority may provide relevant restrictions on his activities.

(3) Proposals by al. 2, t. 1-3 shall be drawn up by the Management Board of FKI, respectively FGVB, and shall be submitted to the authority for approval for the restructuring. The proposals under para. 2, item 4 shall be made by the governing body of a financial holding company. Applications for entry in the register under art. 3 (a) of the law on credit institutions shall be submitted by the Governing Board of the FGVB, according to the FKI.

(4) the administrative organ shall manage a financial holding company in order to preserve access to the critical functions of the institution in restructuring mode and its subsequent sale and the sale of its assets, rights or obligations of one or more private buyers under the right conditions, at the latest within two years from the date of the last transfer of shares and other instruments of ownership issued by the institution in restructuring mode, by using the "Bridging institution".

(5) Mostoviât financial holding company act in the sale of shares and other instruments of ownership issued by the institution in restructuring mode, or its assets, rights or obligations under the following conditions:

1. free and transparent market;

2. lack of substantive errors in the presentation of assets and liabilities;

3. the sale does not benefit or not unduly penalizes prospective buyers;

4. the sale is carried out on commercial terms in accordance with the requirements of the law on State aid and the legal framework of the European Union for State aid;

5. compliance with the rules and with the legal framework of the European Union in the field of competition.

(6) the authority shall make a decision to restructure that legal persons established pursuant to a decision under art. 60, para. 1, ceases to be a tool "S financial holding company" within the meaning of para. 1 in the event of any of the following circumstances:

1. sale of all held by a financial holding company shares and other instruments of ownership of the institutions in the restructuring of a third party;

2. the sale of all or a substantial activity, assets, rights or obligations of the institutions in the restructuring regime, whose shares and other instruments of property acquired by a financial holding company to a third party or parties and the subsequent dissolution of institutions in restructuring mode;

3. mostoviât financial holding company ceases to meet the requirements of para. 1;

4. the procedure for liquidation of a financial holding is over.

(7) the participation of a financial holding company in the capital of the institution in restructuring mode for valuable consideration is transferred to the private sector as soon as commercial and financial circumstances allow it.

(8) When the business of a financial holding company has been terminated as a result of circumstances under para. 6, item 1 – 3, mostoviât financial holding company is liquidated pursuant to the commercial code.

(9) in compliance with the art. 57, al. 6 the proceeds obtained as a result of the actions of the Al. 6, paragraphs 1 and 2 are for the benefit of the shareholders or members of a financial holding company.

Chapter Twelve

TOOL FOR IDENTIFICATION OF ASSETS

Tool for identification of assets

Art. 64. (1) the authority to restructure under art. 2 or under art. 3 may decide on the transfer of assets, rights or liabilities of the institution in restructuring mode or bridge institution to one or more asset management companies.

(2) in compliance with the art. 117 the transfer under paragraph 1. 1 may be carried out without the consent of the shareholders or members of the institution in restructuring mode or a third party, other than a mostovata institution shall not apply the requirements of the commercial law or the law on public offering of securities.

(3) an asset management Company under para. 1 is a joint-stock company with the one-tier system of governance that meets the following requirements:

1. it's the property of the PBF, FPIP, respectively, and is controlled by the restructuring;

2. it was created in order to take on the assets, rights and obligations of one or more institutions in restructuring mode or the institituciâ bridge, or part of them.

(4) an asset management Company under para. 1 manage the transferred his assets in order to obtain the highest possible value for their eventual sale or liquidation in accordance with the applicable regulatory requirements.

(5) upon the proposal of the Management Board of FGVB, respectively of the FKI, the authority to approve the restructuring:

1. the statutes of the company asset management;

2. the management authority of the asset management company;

3. remuneration of the members of the governing body and their responsibilities;

4. the strategy and risk profile of the company.

(6) the authority to restructure may exercise the power under para. 1 the transfer of assets, rights or obligations where there is any of the following conditions:

1. the current state of the market for these assets is such that their eventual realization through the institution of insolvency proceedings under the restructuring would have adverse consequences for one or more financial markets;

2. transfer is necessary to ensure the proper functioning of the institution in restructuring mode or the mostovata Bank, or of a mediator;

3. such transfer is necessary to increase proceeds from the disposal of assets.

(7) where the authority to apply the instrument for restructuring the assets, it shall determine the amount of the consideration to which the assets, rights and obligations under para. 1 transfer of asset management company in accordance with the requirements of art. 55 subject to the law on State aid and the legal framework of the European Union for State aid. Consideration can have a symbolic or negative value.

(8) in accordance with the art. 57, al. 6 consideration under para. 7, paid by the company for the management of assets, when it acquired directly by the institution in restructuring assets, rights or obligations, is in favour of the institution in restructuring mode and can be in the form of debt issued by the company for asset management.


(9) the authority to restructure may decide that one or more transfers of assets, rights or liabilities of the institution in restructuring mode for one or more asset management companies, as well as to transfer assets, rights or obligations of the company back for asset management to the institution in restructuring mode, if the conditions are met under para. 11.

(10) the institution in restructuring mode is obliged to take back the transferred under para. 9 assets, rights or obligations.

(11) the authority for the restructuring may take a decision to carry out at any time to transfer back to under par. 9 in the presence of any of the following circumstances:

1. the decision under paragraph 1. 1 and in the contract under which the transfer is expressly provided for the possibility of transferring back certain rights, assets or liabilities;

2. the assets, rights or obligations do not fall within the classes or do not qualify for transfer laid down in the decision referred to in para. 1 the transfer.

(12) the transfer back referred to in paragraph 1. 11 can be performed at any time but must meet all the other conditions laid down in the contract for that purpose.

(13) in the transfers between the institution in restructuring mode and an asset management company shall apply for partial transfer defense mechanisms referred to in Chapter Seventeen. Shareholders or creditors of the institution in restructuring mode and third parties whose assets, rights or obligations are not transferred to the asset management company may not claims in respect of the transferred assets, rights or obligations, as well as to the governing body and senior management personnel of the company.

(14) an asset management Company has no obligations and shall not be liable to the shareholders or members or creditors of the institution in restructuring mode. The governing body and senior management personnel of the asset management company shall not be liable to the shareholders and creditors of the institution in restructuring mode for action and omission in the performance of their duties, unless the action or inaction does not involve gross negligence or a material breach, which directly affects the rights of the shareholders or creditors.

Chapter thirteen

TOOL FOR SHARING OF LOSSES

Section I

General provisions

The purpose of the sharing of losses

Art. 65. (1) the authority to restructure under art. 2 or under art. 3 may decide on the use of losses sharing tool for achieving the objectives of the restructuring under art. 50, para. 2 in accordance with the principles of restructuring with a view to:

1. the recapitalisation of institution or company under art. 1, al. 1, item 3 – 5 eligible for restructuring, to the extent necessary to:

and recovery) their ability to qualify for licensing, where appropriate;

(b)) perform the activities for which they have obtained a licence under the Act on credit institutions, according to the law on markets in financial instruments, when applicable;

in the maintenance of sufficient market) confidence in the institution or company;

2. conversion into capital or reduce the amount of the principal of the institution's obligations under the restructuring or debt instruments which are transferred:

(a)) of the bridge institution to provide capital for the institution or mostovata

(b)) in application of the tool for the sale of a business or of the formation of asset.

(2) the authority to restructure may decide to use the tool to share losses to achieve the objective referred to in paragraph 1, item 1 only if there is sufficient likelihood that the application of this tool along with other appropriate measures, including measures implemented in accordance with the plan for rescuing the activities under art. 79, to achieve the objectives of the restructuring and to restore the financial stability and long-term viability of the institution or company under art. 1, al. 1, item 3 – 5.

(3) if the conditions in para. 2 cannot be performed, the authority to restructure under art. 2, respectively, under art. 3, can apply some of the tools for restructuring under art. 56, paragraphs 1-3 and the sharing of losses in accordance with para. 1, item 2.

Scope of losses sharing tool

Art. 66. (1) the authority to restructure under art. 2 or under art. 3 may apply the tool to share losses with respect to all the obligations of the institution or company under art. 1, al. 1, item 3-5 who are not excluded from the scope of this instrument in accordance with para. 2.

(2) the authority to restructure may not exercise its powers to devaluation or in terms of conversion the following obligations regardless of whether duties are governed by the law of the Republic of Bulgaria, of another Member State or a third country:

1. guaranteed deposits;

2. secured creditors, including mortgage backed securities within the meaning of the law on mortgage bonds, covered bonds and obligations in the form of financial instruments used for hedging purposes, which constitute an integral part of the coating and that according to the applicable legislation are secured in a manner similar to that in the covered bonds;

3. the obligations arising out of the institution or holding company referred to in art. 1, al. 1 3-5 of client assets or bank accounts, including those held on behalf of undertakings for collective investment in transferable securities or by the name of alternative investment funds, when the customer has protection under the applicable insolvency law;

4. the obligations arising from the confidential relationship between an institution or society of art. 1, al. 1, item 3 – 5 such as config and another person (beneficiary), provided that such beneficiary has protection under applicable insolvency law or civil law;

5. amounts owed to institutions, with the exception of entities which are part of the Group of the institution in restructuring mode with an original maturity of up to seven days;

6. obligations with residual maturity up to 7 days, due to the systems or operators of systems eligible under Chapter v of the law on payment services and payment systems or in the relevant legislation of a Member State, or to their participants and stemming from participation in such a system;

7. obligations to any of the following persons:

a) employee or employees – in terms of accumulated salary, benefits related to retirement, or another permanent remuneration, with the exception of the variable component of the remuneration that is not governed by a collective agreement;

b) suppliers of goods and services that are critical to the daily operation of the institution or the company under art. 1, al. 1, item 3 – 5, including information and utilities, service, maintenance and rental of premises in which the activity is carried out;

c) tax and social security authorities when their claims are privileged under applicable law;

d) guarantee schemes resulting from contributions due in accordance with the applicable legislation.

(3) the exclusion referred to in paragraph 1. 2, point 7 (a) shall not apply to the variable component of the remuneration of the employee whose activity has a significant impact on the risk profile of the institution within the meaning of art. 73 (b), para. 2 of the law on credit institutions, according to art. 24, para. 9 of the law on markets in financial instruments.

(4) the implementation of powers under para. 1 does not lead to violation of the requirements for the separation and sufficient funding of secured assets included in the cover of covered bonds.

(5) the authority to restructure may exercise powers under para. 1, when it is appropriate, in respect of:

1. the part of the collateral obligation with which the amount of the debt exceeds the value of the collateral;

2. the portion of the deposit that exceeds the amount of the security referred to in chapter three of the law on deposit insurance in banks.

An additional exclusion from the scope of losses sharing tool

Art. 67. (1) upon application of the tool for sharing of losses and in the presence of exceptional circumstances, the authority to restructure under art. 2 or under art. 3 may exclude wholly or partly from the application of the powers of devaluation or convert certain obligations when:

1. these obligations, it is not possible to be impaired or rendered within a reasonable time in spite of efforts made in good faith on the part of the body for restructuring;

2. the exclusion is necessary and proportionate in order to ensure continuity of critical functions and the main economic activities of the institution in a way that preserves its ability to continue to carry out its basic operations, services and transactions in restructuring mode;

3. exclusion, including in respect of eligible deposits of natural persons, and micro-, small and medium-sized enterprise, it is necessary and proportionate in order to avoid a proliferation of problems that would seriously compromise the functioning of financial markets, including the infrastructure of financial markets in a way that could cause a serious disturbance in the economy of the Republic of Bulgaria or of the European Union , or

4. the implementation of the instrument for the sharing of losses in respect of those obligations would result in a loss of value that the losses suffered by other lenders, would have been lower if those obligations were excluded from sharing the losses.


(2) in order to facilitate the process of restructuring and limiting the need for additional exceptions under para. 1 the authority to restructure may, in accordance with art. 29, para. 4, item 2 to define a lower limit for exposures to other institutions to the institution or its group in the form of obligations which can share losses. This lower limit does not apply to obligations between persons who are part of a group.

(3) where the authority decide to exclude the restructuring or partially exclude acceptable debt or obligations under acceptable class al. 1, the level of devaluation or conversion, applicable to other reasonable obligations may be increased to take account of such exclusions, provided that the levels of devaluation and conversion applied to other reasonable duties are in accordance with the principle of art. 53, para. 1, item 7.

(4) a decision under paragraph 1. 1 shall be taken only if available PBF funding opportunities subject to the limitations of art. 68.

(5) when it exercises its powers under para. 1, the authority shall take into account the restructuring:

1. the principle that losses are borne by shareholders or members first and then by the institution's creditors in restructuring mode, in accordance with the order of their claims in bankruptcy;

2. the capacity to take on the losses, available in the institution in restructuring mode, if the undertaking or class of obligations be excluded from sharing the losses, and

3. the need to maintain an adequate level of resources in the PBF in FPIP.

(6) the authority shall notify the European Commission restructuring, before exercising its power to exclude an obligation under para. 1. where the exclusion requires a contribution from the PBF, FPIP, respectively, or from an alternative source of financing in accordance with art. 68, the power shall be exercised, if the European Commission does not prohibit or amendment requests within the scope of the proposed expulsion within 24 hours of receipt of such notice or such longer period that the restructuring has given consent.

Conditions and restrictions for PBF funding, respectively, at an additional exclusion FPIP from the scope of losses sharing tool

Art. 68. (1) where the authority to restructure decide to exclude fully or partially acceptable debt or class of eligible liabilities and losses that would be incurred by these obligations are not fully transitioned to other lenders, PBF, FPIP, respectively, can make a contribution to the institution in restructuring mode in order to achieve at least one of the following results:

1. cover the losses that are not incurred by the eligible liabilities, to achieve zero net value of the assets of the institution in the restructuring regime, in accordance with art. 73, para. 1, item 1;

2. the purchase of the shares/units or relevant equity instruments of the institution under the restructuring, with the aim of recapitalisation, in accordance with art. 73, para. 1, item 2.

(2) the Fund for the restructuring of banks, respectively, makes the FPIP al. 1 payment only upon fulfilment of the following conditions:

1. the shareholders ' or members ' voting rights, holders of equity instruments and lenders on eligible liabilities of the institution in restructuring mode, have assumed losses through the cancellation of shares, depreciation and debt conversion or otherwise, of a total value of not less than 8 percent of total liabilities, including the institution's own funds in a restructuring mode, calculated at the time of the Act of restructuring in accordance with the assessment of art. 55;

2. the contribution of the PBF, FPIP respectively shall not exceed 5 per cent of total liabilities, including the institution's own funds in a restructuring mode, calculated at the time of the Act of restructuring in accordance with the assessment of art. 55.

(3) the requirement under subsection. 2, paragraph 1 may not be applied when the following conditions are met:

1. the contribution of the shareholders or members and holders of other equity instruments and the lenders on eligible liabilities of the institution in restructuring mode for assumption of losses and recapitalisation under para. 2, item 1 is not less than 20 per cent of risk-weighted assets of the institution;

2. the Fund for the restructuring of the banks and the Fund for the restructuring of investment firms have a total funds raised from annual contributions at a rate of at least 3 percent of the guaranteed deposits in banks licensed in the Republic of Bulgaria, as well as

3. the balance-sheet total of the institution on a consolidated basis under the equivalent in LEVs of 900 billion dollars. euro.

(4) the contribution of the PBF, FPIP, respectively under para. 1 may be financed in the following ways:

1. from the tools at the disposal of the PBF, FPIP respectively, collected through annual contributions from the institutions, licensed in the Republic of Bulgaria, and branches of institutions from third countries, laid down in the Republic of Bulgaria;

2. from the funds, which can be collected from institutions through exceptional contributions within three years, or

3. when funds under item 1 and 2 are insufficient-funds received from alternative sources of funding in accordance with art. 141, where possible.

(5) in exceptional circumstances, the authority to restructure may seek additional funding from alternative sources of financing under the following conditions:

1. the threshold referred to in paragraph 1. 2, item 2 is reached, and

2. all unsecured subordinated claims of creditors who are not eligible deposits are completely impaired or converted.

(6) the Fund for the restructuring of banks, is accordingly FPIP, may make a contribution under para. 5 and of the resources that are collected by annual contributions and who have not yet used.

Section II

Minimum requirement of own funds and eligible obligations

Application of minimum requirement

Art. 69. (1) the authority to restructure under art. 2 or under art. 3 sets for each institution, licensed in the Republic of Bulgaria, the minimum requirement of own funds and eligible liabilities expressed as a proportion of its total liabilities and shareholders ' equity.

(2) the obligations of derivatives are included in the General obligations under para. 1 in terms of full recognition of the rights of the counterparty netting.

(3) the eligible obligations under para. 1 comply with the following conditions:

1. the instrument is issued and fully paid;

2. the obligation of the institution is not due, is not secured or guaranteed by it;

3. the purchase of the instrument was not funded directly or indirectly by the institution;

4. the obligation has a residual maturity of at least one year;

5. the obligation does not derive from a derivative;

6. in respect of the eligible liabilities to Bank the obligation does not derive from the deposit, which is privileged in terms of claims in bankruptcy pursuant to art. 94, para. 1 of the law on Bank bankruptcy.

(4) for the purposes of paragraphs 1 and 2. 3, item 4 the maturity of debt which gives the creditor the right to early repayment, is the first date on which such right arises.

(5) where an obligation shall be governed by the law of a third State, the authority may require the restructuring of the institution to show that the decision of the authority to restructure for depreciation or conversion of debt will have legal effect under the law of a third country, taking into account the terms of the treaty governing the obligation and applicable international agreements for the recognition of restructuring procedures. If the restructuring doesn't have enough reason to believe that the decision on para. 1 would have no legal effect under the law of a third country under para. 1, the obligation is not included in the calculation of the minimum requirement of own funds and eligible liabilities.

(6) the minimum requirement of own funds and eligible liabilities of the institution shall be determined on the basis of at least the following principles and criteria:

1. enable the institution to be restructured through the use of tools for restructuring, including, where appropriate, through the sharing of losses in a way that meets the objectives of restructuring;

2. provision of sufficient size acceptable to permit obligations when using the tool for sharing losses losses can be undertaken and the ratio of the basic equity of the first line to be able to recover to the level required for the purpose of the institution to continue to qualify for licensing and to continue to carry out the activities for which is licensed pursuant to the law on credit institutions Accordingly, the law on markets in financial instruments, as well as to maintain enough market confidence in the institution;

3. where, in the restructuring plan was made certain classes of eligible liabilities to be excluded from the sharing of losses pursuant to art. 67, para. 1 or be transferred entirely to the acquirer in a partial transfer, to provide enough other acceptable commitments which allow losses to be made so that the ratio of basic own funds first-order can be restored to the level required to enable the institution to continue to qualify for licensing and to continue to carry out the activities for which is licensed pursuant to the law on credit institutions Accordingly, the law on markets in financial instruments;

4. take account of the size, business model, the model of financing and the risk profile of the institution;

5. bank-reporting on the extent to which FGVB would have participated in the financing of restructuring in accordance with art. 144;


6. reporting to what extent fulfil obligations of the institution would have adverse consequences for financial stability, including the distribution of problems to other institutions because of the interconnectedness of the institution with them or with the rest of the financial system.

(7) by Decree of the NATIONAL BANK, according to the Commission, the criteria under para. 6 specify and may establish additional criteria for the determination of the minimum requirements.

(8) the Bulgarian National Bank, respectively, the Commission shall control implementation by the institutions of the minimum requirement of own funds and eligible obligations under para. 1 and where applicable – art. 70, para. 1. decisions relating to the application of the minimum requirements shall be taken simultaneously and are consistent with the development and maintenance of the restructuring plans.

(9) the Bulgarian National Bank shall inform the Commission accordingly, EBA for designated for each institution values of minimum requirements under paragraph 1. 1 and, where applicable, in the cases under art. 70, para. 1.

Application of minimum requirements by financial instruments contractual sharing of losses

Art. 70. (1) by its decisions under art. 69 the authority to restructure under art. 2 or under art. 3 may provide the minimum requirement of own funds and eligible liabilities of the institution to be partially covered on a consolidated or individual level through the financial instruments contractual sharing of losses.

(2) an instrument is accepted for a financial instrument for contractual sharing of losses, when you meet the following conditions:

1. contains a contract term which provides that where the authority decides to use the adjustment tool to share the losses, the financial instrument is being depreciated or converted at the required level before the devaluation or the conversion of other eligible obligations, as well as

2. is the subject of a binding agreement or a provision laying down the procedure according to which the claims in insolvency proceedings is the financial instrument of a lower order than the other acceptable and obligations cannot be repaid before they are barred other acceptable claims obligations.

Coordination of measures for the application of minimum requirements

Art. 71. (1) the minimum requirement of own funds and eligible obligations are implemented by institutions of individual and consolidated basis.

(2) the Bulgarian National Bank, respectively, the Commission may impose a minimum requirement to the society of art. 1, al. 1, item 3-5 on an individual basis.

(3) the minimum requirement of own funds and eligible obligations of the consolidated level of the parent undertaking of the European Union – subject to consolidated supervision by the BNB, respectively by the Commission, shall be determined in accordance with the procedures referred to in paragraph 1. 4-9 and on the basis of the criteria referred to in art. 69, para. 6, and whether or not in accordance with the restructuring plan subsidiaries in third countries restructure themselves.

(4) the Bulgarian National Bank, the Commission accordingly, where authority for the restructuring of the group, level and restructuring charge of subsidiaries on an individual basis, take a joint decision on the size of the minimum requirement, applicable to the consolidated level.

(5) the joint decision referred to in paragraph 1. 4 be motivated and submitted by the Bulgarian National Bank, respectively, by the Commission, the parent of the European Union.

(6) in the absence of a joint decision within four months, respectively, the Commission, taking into account the assessment of subsidiaries performed by relevant authorities to restructure, take a decision on the size of the consolidated a minimum requirement.

(7) If, within four months, someone from the relevant authorities for the restructuring took the matter to the EBA in accordance with art. 19 of Regulation (EC) no 1093/2010, BNB, respectively, the Commission postponed making a decision and await the decision that EBA could take within one month, in accordance with paragraph 3 of that article, and then take a decision in accordance with the decision of the EBA.

(8) If, within one month, the EBA has not taken a decision, the BULGARIAN NATIONAL BANK, respectively the Commission shall take the decision alone.

(9) the joint decision referred to in paragraph 1. 4 and the decision on para. 6 shall be binding on the BANK, according to the Commission, subject to a regular review and update as necessary.

(10) where restructuring authority in respect of the institution – subsidiary BANK, respectively, the Commission participated in making a joint decision on the size of the minimum requirement, applicable to the consolidated level to the parent. In this case the Commission, accordingly, exercise the powers of the appropriate authority restructuring provided for in para. 3-9. In this case the joint decision is binding on the BANK, according to the Commission.

Coordination of measures for the application of minimum requirements on the individual level for the institution – subsidiary

Art. 72. (1) the Bulgarian National Bank, according to the Commission, in its capacity as the authority for the restructuring of the institution – a subsidiary of the parent undertaking by the European Union, lays down the minimum requirement of own funds and eligible liabilities on the individual level of the institution – a subsidiary, in accordance with:

1. the principles and criteria of art. 69, para. 6, including the level of own funds of the subsidiary, and

2. the consolidated requirement set for the group.

(2) the decision on para. 1 shall be taken in the form of a joint decision of the authority for the restructuring of the group level, BNB, respectively, the Commission and other bodies for the restructuring of the institutions – the subsidiaries of the group.

(3) the joint decision referred to in paragraph 1. 2 motivate and be transmitted from BNB, respectively by the Commission, of the institution – subsidiary in the Republic of Bulgaria.

(4) in the absence of a joint decision on al. 2 within four months, respectively, the Commission shall take a decision in respect of the institution – subsidiary in the Republic of Bulgaria, having regard to the opinion of the authority and reserves for restructuring at the level of the group.

(5) If, on expiry of the period referred to in paragraph four. 4 the authority to restructure the group level took the matter to the EBA in accordance with art. 19 of Regulation (EC) no 1093/2010, BNB, respectively, the Commission postponed making a decision and await the decision that EBA may take in accordance with paragraph 3 of that article, and then take a decision in accordance with the decision of the EBA.

(6) If, within one month, the EBA has not taken a decision, the BULGARIAN NATIONAL BANK, respectively, the Commission shall take a decision independently concerning minimum requirements applicable to the institutions referred to in paragraph 1. 1 who are licensed in the Republic of Bulgaria.

(7) the joint decision referred to in paragraph 1. 2 and the decision on para. 4 shall be binding on the BANK, according to the Commission, subject to a regular review and update as necessary.

(8) where an authority for the restructuring of the group level, BNB, respectively, the Commission participated in making a joint decision on the size of the minimum requirement of the individual levels for each institution – a subsidiary of the group, pursuant to para. 1-7. In this case the joint decision referred to in paragraph 1. 2 is binding on the BANK, according to the Commission.

(9) in the cases referred to in para. 1 the Commission, respectively, participated in the joint solution for determining the minimum requirement on an individual level to any other institution from the Group's subsidiary in accordance with the procedure referred to in paragraph 1. 1-4. In this case the joint decision is binding on the BANK, according to the Commission.

Section III

Application of losses sharing tool

Evaluation of amounts of losses sharing

Art. 73. (1) before using the instrument for the sharing of losses, the authority to restructure under art. 2 or under art. 3 subject to art. 55 shall carry out an assessment of the following:

1. the amount by which the eligible liabilities must be impaired, where applicable, to ensure the zero value of the net assets of the Bank in restructuring mode, and

2. the amount by which the eligible liabilities must be converted into shares or other ownership instruments to restore the ratio of the basic own funds of the first line of:

a) institution in restructuring mode, or

b) mostovata institution.

(2) upon the assessment under paragraph 1. 1 take into account the capital contributions, according to PBF FPIP, may make pursuant to art. 137, para. 1, item 3, as well as the need to maintain enough market confidence in the institution in restructuring mode or in the institution, including mostovata in order to be able to continue to meet for a period of at least one year of the license terms and to continue to carry out the activities for which it has been licensed in accordance with the law on credit institutions, according to the law on markets in financial instruments.

(3) where the authority intends to use restructuring tool for differentiation of assets, the amount by which to reduce the amount of eligible liabilities, shall comply with a conservative estimate of the capital needs of the asset management company.

(4) where, after the devaluation of capital in accordance with Chapter 15th and made sharing of losses pursuant to art. 65, para. 1 it is established that the preliminary assessment based on art. 55 degree of impairment exceeds the required under the final rating under art. 55, para. 15, the restructuring can reduce the amount of the impairment by increasing capital and obligations back to the required size for the purpose of compensation of creditors and shareholders.

(5) the authority to adopt and apply restructuring procedures, to ensure that the evaluations referred to in para. 1 shall be based, as far as possible, the most current and comprehensive information about the assets and liabilities of the institution in restructuring mode.

Treatment of shareholders in the share of losses or depreciation, or conversion of equity instruments


Art. 74. (1) When using the tool for sharing of losses in accordance with art. 65, para. 1 or devaluation, or the conversion of equity instruments in accordance with art. 89, the restructuring undertaken in respect of the shareholders and the holders of other instruments of ownership at least one of the following actions:

1. invalidates existing shares and other instruments of ownership or transfers them to creditors in the institution's obligations under the restructuring, which are impaired or converted in the implementation of the instrument for the sharing of losses;

2. provided that, according to the assessment carried out under art. 55, the institution in restructuring mode has a positive net worth – a significant reduction in the proportion of existing shareholders and the holders of other instruments of property ownership in the capital of the institution as a result of conversion into shares or other instruments of ownership of:

(a) of the additional tools) capital and capital of the second order, issued by the institution after the exercise of the powers under art. 89 of the restructuring, or

b) acceptable commitments issued by the institution in restructuring mode for the exercise of implementing powers conferred on the authority to restructure under art. 94, para. 2, item 6.

(2) the conversion of Pará. 1, item 2 shall be carried out in the ratio, which significantly reduces the share of existing shareholders and the holders of other instruments of ownership.

(3) the actions referred to in para. 1 and be taken in respect of the shareholders and the holders of other instruments of ownership when the shares and owned instruments are issued or granted under the following circumstances:

1. following the conversion of debt into shares or other instruments of property ownership in accordance with the contractual terms of the primary debt instruments on the occurrence of an event which precedes or coincides with the moment of the decision of the authority to restructure the institution or company that under art. 1, al. 1, item 3-5 qualify for restructuring;

2. conversion of tools from additional capital and the capital of the second line of the basic tools in own capital under art. 92.

(4) in selecting the action on al. 1 what to take for restructuring the authority shall take into account:

1. the assessment carried out in accordance with art. 55;

2. the amount by which, in accordance with the judgment of the authority to restructure the basic elements of private capital must be reduced, and the tools of the additional capital and the capital of the second row – impaired or converted according to art. 92, and

3. the total amount in accordance with the assessment of art. 73.

(5) where the application of the tool for sharing your loss or conversion of the instruments of the capital by the first and second lines would lead to the acquisition or increase of a qualifying holding in an institution within the framework of the procedure referred to in art. 28 – 34 of the law on credit institutions, respectively, under art. 26-26 (e) of the law on markets in financial instruments, the relevant competent authority shall carry out the required assessment in a timely manner, so as not to delay the implementation of the instrument for sharing your loss or conversion or to hinder the achievement of the objectives of the restructuring.

(6) where at the date of application of the tool for sharing your loss or conversion of the instruments of the capital by the first and second lines, the competent authority has not finished the assessment under paragraph 1. 5, for each acquisition or increase of the qualifying holding of a transferee of the instrument resulting from the implementation of losses sharing or converting procedures under art. 58, para. 9 and 10.

Sequence of devaluation and conversion

Art. 75. (1) in the implementation of the instrument for the sharing of losses for restructuring authority under art. 2 or under art. 3 exercise the powers for the devaluation and conversion after reading of the exemptions under art. 66 and 67 and subject to the following requirements and order:

1. the elements of the base own capital shall be reduced in accordance with art. 92;

2. where the reduction in accordance with paragraph 1 is less than the sum of the amounts referred to in art. 74, para. 4, item 2 and 3, the amount of the principal tools of the additional capital shall be reduced to the extent necessary, or to their full size;

3. where the total reduction under item 1 and 2 is less than the sum of the amounts referred to in art. 74, para. 4, item 2 and 3, the amount of the principal instruments of capital from the second row shall be reduced to the extent necessary, or to their full size;

4. where the total reduction under item 1 – 3 is less than the sum of the amounts referred to in art. 74, para. 4, paragraph 2 and 3 shall be reduced to the extent necessary, the amount of the principal of the subordinate debt, which is not part of the additional capital or capital from the second line, in accordance with the order of claims in insolvency proceedings;

5. where the total reduction under item 1 – 4 is less than the sum of the amounts referred to in art. 74, para. 4, item 2 and 3, the amount of the principal amount due or currently on the remaining eligible liabilities is reduced after application of the exemptions under art. 66, para. 2 and where applicable – art. 67, in accordance with the order of claims according to art. 94, para. 1 of the law on bankruptcy, Bank respectively under art. 722, para. 1 of the commercial code.

(2) in exercising the powers of devaluation or conversion authority distributes restructuring losses represented by the sum of the amounts referred to in art. 74, para. 3, item 2 and 3 in proportion between instruments of property and the eligible liabilities from the same row by reducing the amount of the principal or of the current amount due in respect of these instruments of property or eligible obligations in proportion to their value, with the exception of cases in which allow different allocation of losses on obligations of the same line in the presence of circumstances referred to in art. 67.

(3) the requirement under subsection. 2 shall not apply to obligations which are excluded from sharing the losses in accordance with art. 66, para. 2 and art. 67 and which may receive more favourable treatment in comparison with that of the eligible liabilities from the same order in bankruptcy proceedings.

(4) prior to the application of para. 1, item 5 the restructuring required converts or reduces the principal of the instruments referred to in paragraph 1. 1, item 2 – 4, when these tools are still not converted and contain any of the following conditions:

1. principal amount of the instrument to be reduced on the occurrence of the event related to the financial situation, solvency or the relationship of the institution's capital adequacy or the company under art. 1, al. 1, item 3-5;

2. the conversion of the tools in the tools property in the event of such an event.

(5) where, in accordance with the conditions set out in para. 4, item 1 of the principal tool is not entirely, impaired before applying the tool to share losses with respect to other instruments under para. 1, the authority shall exercise the powers conferred on restructuring for depreciation and conversion to the residual amount of the principal in accordance with para. 1.

(6) the authority to restructure cannot convert a class of obligations, when another class obligations subject to the first grade remain essentially unresolved or neobezceneni, unless this is permitted under art. 66, para. 2 and art. 67.

Devaluation and conversion of liabilities arising from derivatives

Art. 76. (1) the authority to restructure under art. 2 or under art. 3 exercise the powers for devaluation and conversion of liabilities arising from derivatives, just after the closing of positions on derivative contracts. For this purpose the institution in restructuring mode for restructuring the authority may terminate or closes all derivative contracts.

(2) paragraph 1 shall not apply in cases where an obligation under a derivative contract is excluded from the scope of the instrument for the sharing of losses pursuant to art. 67.

(3) When transactions with the derivative instruments are subject to a netting agreement, the authority to restructure or independent appraiser set within the assessment under art. 55 the obligation resulting from these transactions on a net basis, in accordance with the terms of the agreement.

(4) the authority determines the value of restructuring obligations in derivative contracts in accordance with:

1. an appropriate methodology for determining the value of the classes of derivatives, including transactions and exposures that are subject to netting agreements;

2. the principles for the determination of the moment at which specify the values of the derivative positions, and

3. an appropriate methodology for comparing the destruction of value as a result of the closure of the derivatives and the subsequent application of the tool for sharing of losses against the ensuing obligations with the amount of losses that would have suffered in derivatives positions in direct sharing of losses.

Conversion factor of the debt into capital

Art. 77. In the exercise of its powers under art. 90, para. 1 and art. 94, para. 2, item 6 authority to restructure under art. 2 or under art. 3 may apply different conversion factors for different classes of equity instruments and obligations in accordance with either or both of the following principles:

1. conversion ratio represents appropriate compensation to affected creditors for suffered loss as a result of the exercise by the authority for the restructuring of the power of compounding or conversion;

2. when applying different conversion factors, conversion ratio applicable to obligations that are of a higher order in bankruptcy is higher than the rate of conversion of the obligations of a lower order.

Reorganisation measures, accompanying the sharing of losses


Art. 78. When using the tool for sharing the losses in order to recapitalise the company or institution under art. 1, al. 1, item 3-5 in accordance with art. 65, para. 1.1 the authority to restructure under art. 2 or under art. 3 required by the institution or by the company to draw up and implement a rescue plan of activities under art. 79.

Rescue plan of activities

Art. 79. (1) within one month of the application of the tool for sharing of losses in accordance with art. 65, para. 1, item 1 in relation to an institution or society of art. 1, al. 1, item 3-5 the governing body of the institution shall draw up a rescue plan of action that meets the requirements of art. 80, and submit it for approval to the authority to restructure under art. 2 or under art. 3.

(2) where applicable the legal framework of the European Union for State aid, the plan under paragraph 1. 1 must meet the requirements for the restructuring plan, which the institution or company shall submit to the European Commission in accordance with the applicable conditions.

(3) when the tool for sharing of losses in accordance with art. 65, para. 1, item 1 applies to two or more subjects of a group reorganisation plan of the activities shall be drawn up by the parent institution of the European Union and covers all the institutions in the group in accordance with the applicable procedures, referred to in art. 8-12.

(4) in the cases referred to in para. 3, when BNB, respectively, the Commission's authority to restructure the group level, it provides the plan under paragraph 1. 1 to the relevant authorities for restructuring and of EBA.

(5) the authority may extend the restructuring period under para. 1 with no more than one month, in exceptional circumstances and in the event that it is necessary for the attainment of the objectives of the restructuring.

(6) where applicable the legal framework of the European Union for State aid, the extension of the term under para. 5 do not exceed the time limit set in accordance with the framework for State aid.

Requirements to the rescue plan of activities

Art. 80. (1) a reorganisation plan of action are determined to restore the long-term viability of the institution or the company under art. 1, al. 1, item 3-5, or part of their business within a reasonable time. These measures are based on realistic assumptions regarding economic conditions and the conditions of the financial markets in which the institution or company will operate.

(2) a reorganisation Plan of the operation is consistent with the current state and future prospects for the financial markets, reflecting the assumptions about the best and worst scenario, including a combination of events, which allows to identify the main vulnerabilities of the institution. Assumptions are compared against appropriate benchmarks for the sector of the financial system.

(3) a reorganisation Plan of activities includes at least the following elements:

1. the detailed analysis of the causes and the problems that led to the failure or likelihood of failure to comply with the obligations of the institution or company under art. 1, al. 1, item 3-5, and the circumstances giving rise to difficulties;

2. Description of measures aimed at restoring the long-term viability of the institution or company under art. 1, al. 1, item 3-5, which should be adopted;

3. timetable for implementation of the measures referred to in paragraph 2.

(4) the measures for the restoration of the long-term viability of the institution or the company under art. 1, al. 1, item 3 – 5 may include:

1. reorganization of the activities of the institution or the company under art. 1, al. 1, item 3-5;

2. changes in the operational systems and the infrastructure of the institution;

3. closure of activities generating losses;

4. the reorganization of existing activities, which may become competitive;

5. sale of assets or businesses.

The approval of plans for the rehabilitation of the activity

Art. 81. (1) within one month of the submission of a reorganisation plan of the restructuring activities under art. 2 or under art. 3 assess the possibility of execution lead to restoration of the long-term viability of the institution or company under art. 1, al. 1, item 3 – 5 and shall approve the balance when it considers that it is possible the objectives to be achieved.

(2) if the Authority considers that the restructuring plan will lead to the restoration of the long-term viability of the institution or the company under art. 1, al. 1, item 3 – 5, it shall inform the management authority of their objections and requires appropriate amendments to the plan.

(3) within two weeks from the date of receipt of the notification under paragraph 1. 2 the governing body shall submit to the approval authority for the amended restructuring plan. Within a week, the authority shall evaluate the amended plan for restructuring and inform the steering body if it considers that the objections under para. 2 are reported and whether further amendments are required.

(4) the governing body approved by the Authority implemented a restructuring plan for the reorganization of the operation and at least once every six months, submit to the authority for the restructuring reports on its implementation. If the Authority considers that restructuring is necessary a revision of the plan to achieve the objective referred to in art. 80, al. 1, the management organ shall review the plan and submit it to the authority for approval for the restructuring.

Section IV

Other provisions for the implementation of the instrument for the sharing of losses

Effects of losses sharing

Art. 82. (1) in exercising the authority to restructure under art. 2 or under art. 3 the power of art. 89 and art. 94, para. 2, item 5 – 9 decisions on reduction of principal or of the amount due, conversion or cancellation have immediate and binding effect for the institution in restructuring mode and the affected creditors and shareholders.

(2) the authority to restructure has the power to require implementation of all factual and legal acts necessary for the exercise of the powers under art. 89 and art. 94, para. 2, item 5 – 9, including:

1. registration the registration circumstances arising from the exercise of powers under para. 1, in the commercial register;

2. suspension of trading or cancellation of the registration of the shares or debt;

3. registration or admission to trading of the new instruments of property;

4. re-registration or admission to trading of debt instruments that are impaired, without requiring the publication of a prospectus in accordance with applicable legislation.

(3) If, in the exercise of the power under art. 94, para. 2, item 5 the authority to restructure entirely depreciated amount of the principal of the debt or the amount due thereon, this obligation and all other obligations or claims resulting thereof which have not accrued at the time of the exercise of the power shall be treated as expired and cannot be recognised in subsequent proceedings in connection with the institution in restructuring mode or its successor at a subsequent termination.

(4) If, in the exercise of the power under art. 94, para. 2, item 5 the restructuring reduced the amount of the principal part of the obligation or the amount to be paid on it, the obligation is extinguished to the extent of the reduced rate. The instrument or agreement under which the initial obligation is incurred, shall continue to apply in respect of the remaining principal amount or the amount payable after adjustment of the amount of the interest, to reflect the reduction of principal, and after other changes to the conditions that the authority may require the restructuring through the exercise of the power under art. 94, para. 2, item 10.

Removing procedural obstacles to the sharing of losses

Art. 83. (1) the authority to restructure under art. 2 or under art. 3 may require institutions and companies under art. 1, al. 1, item 3-5 to maintain at all times sufficient registered capital or other instruments of the basic own funds of the first order, so that, if the restructuring exercise powers under art. 94, para. 2, item 5 and 6 in respect of the institution or company or their subsidiaries, institution or company should not be prevented from issuing a sufficient amount of new instruments of property, to ensure the effective conversion of obligations.

(2) the authority shall consider restructuring the need to impose the requirement of para. 1 and determines the amount of capital in the context of the development and maintenance of appropriate restructuring plan, taking into account the restructuring provided for therein.

(3) in the assessment under paragraph 1. 2 the authority shall examine whether the restructuring amount of the registered capital or other instruments of the basic private capital is sufficient to cover the sum of the amounts referred to in art. 74, para. 4, item 2 and 3 If the restructuring plan provides for the application of the tool for sharing the losses.

(4) the authority to restructure has the right to require changes to the statute or founding document in order to eliminate procedural barriers to the conversion of debts into ordinary shares or other instruments of ownership, including prior rights of the shareholders or the requirements for consent of the shareholders for increase of the capital.

Contractual recognition of losses sharing

Art. 84. (1) in agreements giving rise to obligations to which they are parties, institutions and companies under art. 1, al. 1, item 3-5 include a contractual provision under which a lender or other party to the agreement recognize that particular obligation can be obezceneno or transformed and agree to adopt a reduction in the principal amount due, or conversion or cancellation, which shall be carried out as a result of the exercise of these powers by the authority for the restructuring, on condition that this obligation:

1. is not excluded under art. 66, para. (2);

2. deposit, which is covered by the procedure of art. 94, para. 1, item 4 (a) of the law on banking insolvency;


3. shall be governed by the law of a third country, and

4. is emitted or absorbed after the entry into force of this law.

(2) the requirement under subsection. 1, item 3, shall not apply where the authority to restructure under art. 2 or under art. 3 finds that with respect to those set out in para. 1 obligations restructuring authority may exercise the powers for depreciation and conversion in accordance with the legislation of the third country or binding agreement concluded with it.

(3) the authority may require the restructuring of the institution or company under art. 1, al. 1, item 3-5 to provide a legal opinion on the potential for ensuring the implementation and effectiveness of the contractual provision under para. 1, item 3.

(4) If an institution or society of art. 1, al. 1, item 3-5 not included in the contractual provisions governing the obligation required under para. 1 condition, this does not hinder the restructuring authority to exercise powers for the devaluation and conversion in respect of that obligation.

Chapter fourteen

STATE TOOLS FOR FINANCIAL STABILIZATION

General provisions

Art. 85. (1) in the event of a systemic crisis, as a last resort, if the objectives of the restructuring for bank restructuring mode are not achieved, once the instruments of art. 56 are attached by the BNB to the maximum in order to maintain an appropriate degree of financial stability and are not likely to be achieved through other restructuring actions, BNB shall notify the Minister of finance and may make a motion under art. 57, al. 8.

(2) the notification under paragraph 1. 1 contains detailed information on:

1. the current financial situation of the Bank in restructuring mode;

2. a decision under art. 114 of the Bulgarian National Bank on the basis of the assessment provided by the art. 55;

3. compliance with the conditions under art. 51, para. 1;

4. the attached tools for restructuring;

5. compliance with the conditions under art. 57, al. 8, item 1;

6. other significant circumstances.

(3) on the basis of a notification under paragraph 1. 2 and the assessment of the Bulgarian National Bank on the possibilities for restructuring the Minister of finance after consultation with the Management Board of the BANK may make a reasoned proposal to the Council of Ministers for a decision on the application of State financial stabilisation tools under art. 86, para. 1 in compliance with the rules on State aid, provided that the implementation of restructuring measures would not be enough to avoid significant adverse effects on financial stability, and to the State financial stabilization under art. 86, para. 1, item 2, the implementation of restructuring measures would not be enough to protect the public interest, if the measures are implemented against the Bank under art. 86, para. 1, item 1.

(4) the Council of Ministers shall take a decision on the proposal of the Minister of finance under subsection. 3, which defines:

1. the objectives to be achieved with the implementation of government instruments for financial stabilization;

2. the present state of art tool. 86, para. 1;

3. the amount by which the State will participate in the Bank's capital in restructuring mode and the type of financial instruments that provide capital support;

4. the transferee of shares and other financial instruments that are recognized as equity by the first or second line;

5. other conditions to be fulfilled in the implementation of relevant State financial stabilization, and measures to be implemented.

(5) the Minister of finance is responsible for the implementation of the decision of the Council of Ministers under para. 5.

(6) in the case of application of State financial stabilisation, the Minister of Finance has all the powers of the authority to restructure under art. 94. In such cases, the Minister of Finance's and administrator of aid within the meaning of § 1, item 4 of the additional provisions of the law on State aid.

Types of government instruments for financial stabilization

Art. 86. (1) the State financial stabilisation tools are:

1. state capital support, and

2. temporary state ownership.

(2) the State capital support is through the participation of the State in the increase of own funds of the Bank under the restructuring by the BANK subject to the requirements of Regulation (EC) no 575/2013 through the acquisition of:

1. Tools of the base own capital;

2. Tools of the additional capital, or

3. instruments of capital from the second row.

(3) the participation of the State in increasing the equity of the institution of the Al. 2 can be directly or by means of a single-member company with State participation in the capital.

(4) the temporary state ownership is applied through the acquisition by the State directly or through single-member company with State participation in the capital of all newly issued shares in the capital of the Bank in restructuring mode, provided that the share of losses is applied to the maximum extent, as shareholders have assumed losses by reducing the equity and cancellation of all the shares.

(5) in the cases referred to in para. 2 and 4 of the Bank shareholders lose their entitlement under art. 194, para. 1 and 2 of the commercial law of acquisition of relevant to their share before the increase in capital of the new shares.

The exercise of the rights of the State

Art. 87. (1) in the cases of art. 86, para. 2 and 4, respectively, the State company under art. 86, para. 3 and 4, in the framework of the joint-stock Bank Management provides rights of commercial and professional basis in compliance with the provisions of all laws and regulations governing the banking business, and with the objectives of the restructuring.

(2) The company respectively under art. 86, para. 3 and 4, sold its participation in the capital of the Bank, acquired by art. 86, para. 2 or 4, the persons in the private sector as soon as commercial and financial circumstances allow it.

An appeal against a decision of the Council of Ministers

Art. 88. (1) the decision of the Council of Ministers under art. 85, para. 4 subject to appeal in accordance with art. 117. An appeal shall not have suspensive effect.

(2) the decision of the Council of Ministers under art. 85, para. 4 and the decision of the Court shall be published in the commercial register at the Bank in restructuring mode.

(3) the revocation of the decision under art. 85, para. 4 shall not affect the validity of the regulatory administrative acts and the rights of third parties in good faith acquired on the basis of the repealed decision or administrative acts issued on the basis of the date of notification of the judgment in the commercial register. In this case, you may seek compensation only for damage sustained.

Chapter fifteen.

WRITE-DOWN OF EQUITY INSTRUMENTS

Requirement for depreciation or conversion of equity instruments

Art. 89. (1) the authority to restructure under art. 2 or under art. 3 may, if necessary, decide on the devaluation or conversion of respective equity instruments in the property of the institution and the society of art. 1, al. 1, item 3 – 5.

(2) the decision on para. 1 can be taken alone or as part of the restructuring operation.

Conditions for decision-making for the devaluation of equity instruments

Art. 90. (1) the authority to restructure under art. 2 or under art. 3 take immediately a decision under art. 89, para. 1 in accordance with the procedure referred to in art. 92, when there is one or more of the following circumstances:

1. restructuring authority has determined that the conditions for restructuring aid under art. 51 before e action taken on restructuring;

2. The Bulgarian National Bank, respectively, the Commission has established that if you do not exercise powers under art. 89, para. 1 in terms of the respective equity instruments, the institution or company under art. 1, al. 1, item 3-5 won't be viable;

3. where the relevant equity instruments are issued by a subsidiary, which is an institution licensed in the Republic of Bulgaria, and are recognized for the purposes of the implementation of the capital requirements on an individual basis of the institution and on a consolidated basis in terms of group, BNB, respectively, the Commission made the decision in conjunction with the appropriate authority of the Member State of the supervisor in accordance with art. 127 which stated that if the powers to be exercised no devaluation or preobrazuvane with respect to these instruments, the band will not be viable;

4. where the relevant equity instruments are issued by a subsidiary of the institution or a financial holding company to which the BANK, respectively, the Commission is in the role of the consolidating supervisor and are recognized for the purposes of the implementation of the capital requirements on an individual basis of the subsidiary and on a consolidated basis in terms of group, BNB, respectively, the Commission made the decision in conjunction with the appropriate authority of the Member State of the subsidiary in accordance with art. 126, para. 5, which States that if the powers to be exercised no devaluation or preobrazuvane with respect to these instruments, the band will not be viable;

5. when the corresponding equity instruments are issued by the institution of the Member State or the institution of the European Union and are recognized for the purposes of the implementation of the capital requirements on an individual basis of the institution and on a consolidated basis, and the BULGARIAN NATIONAL BANK, respectively, the Commission made the decision that if I exercised the powers of devaluation or conversion in respect of these instruments, the band will not be viable;

6. the institution or company under art. 1, al. 1, item 3-5 have requested an extraordinary public financial support beyond the cases under art. 51, para. 3, paragraph 4, point (b).

(2) for the purposes of paragraphs 1 and 2. 1 institution, society of art. 1, al. 1, item 3-5 or group are not viable if the following two conditions are met:

1. the problem is or is likely to become a problem within the meaning of art. 51, para. 3 or within the meaning of para. 3;


2. having regard to the degree of urgency and other relevant circumstances there's no realistic chance of action, including from the private sector, or actions of the Bulgarian National Bank, according to the Commission, in its capacity as the competent authority, including measures for early intervention, different from the devaluation or the conversion of equity instruments, whether exercise alone or simultaneously with restructuring action within a reasonable period of time to prevent the failure of the institution the company, under art. 1, al. 1, item 3-5 or of the group.

(3) the Group is considered to be a problematic or that are likely to become problematic when they are violated, or where there are objective circumstances in support of the finding that is coming up in the near future to be infringed consolidated prudential requirements in a way that would have established the taking of action by the BNB, respectively by the Commission or by any other competent authority, including, but not limited to, due to the fact the band has gained or likely to rack up losses to run out around her own funds or a substantial part of it.

Requirements for the application of devaluation of equity instruments

Art. 91. (1) the relevant equity instruments issued by the institution, licensed in the Republic of Bulgaria, which is a subsidiary may not be impaired or converted according to art. 90, para. 1, item 3 under less favourable conditions compared with the equity instruments with the same order at the level of the parent undertaking which are impaired or converted.

(2) the relevant equity instruments issued by a subsidiary of the institution or a financial holding company, which is subject to supervision by the BNB, respectively by the Commission may not be written down or transformed according to art. 90, para. 1, item 4 under less favourable conditions compared with the equity instruments with the same order at the level of the parent undertaking which are impaired or converted.

(3) before making a finding referred to in art. 90, para. 1, item 3, in terms of institution, licensed in the Republic of Bulgaria, the BULGARIAN NATIONAL BANK, respectively, the Commission shall make the notification and consultation under art. 93.

(4) before making a finding referred to art. 90, para. 1, item 4, in respect of the subsidiary issued the corresponding equity, BNB, respectively, the Commission shall make the notification and consultation under art. 93.

(5) before exercising its powers for depreciation or conversion of equity instruments, BNB, respectively, the Commission provides an assessment under art. 55 of the assets and liabilities of the institution or the company under art. 1, al. 1, item 3 – 5, which serves for the determination of depreciation, which will be applied to the relevant equity instruments in order to take on the losses, as well as the level of conversion, which will be applied to those equity instruments so as to be rekapitalizirana the institution or company.

Policy and procedures for depreciation or the conversion of the equity instruments

Art. 92. (1) the authority to restructure under art. 2 or under art. 3 exercise the powers for depreciation or conversion to the extent necessary to achieve the objectives of the restructuring, in accordance with the order of claims in insolvency proceedings in such a way as to achieve the following results:

1. the first basic elements are reduced their own capital in proportion to the losses or to their full size; The Bulgarian National Bank, according to the Commission, shall take the action under art. 74, para. 1 and 2 in respect of holders of the instruments;

2. the instruments of supplementary capital depreciates and/or transformed into tools of basic private capital to the extent necessary to achieve the objectives of the restructuring or to their full size;

3. the instruments of capital tier depreciates and/or transformed into tools of basic private capital to the extent necessary to achieve the objectives of the restructuring or to their full size.

(2) when an equity instrument concerned is being depreciated:

1. the reduction of the amount of the principal is irreversible, except when you have to compensate by the procedure of art. 73, para. (4);

2. in relation to the size of the write-down of the tool holder is not entitled to claim, except in the case of:

a) where applicable, already accrued interest and other similar obligation;

b) compensation for the damage which may be incurred as a result of the appeal the legality of the exercise of the powers of the devaluation, or

c) providing tools of basic own funds from the first line of the holder of the respective equity instruments in accordance with para. 3;

3. the holder of the instrument may not be paid compensation, other than that referred to in paragraph 1. 3.

(3) in view of the possibility of carrying out the conversion of the respective equity instruments in accordance with para. 1, item 2 and 3, the authority may require the restructuring of the institution or company under art. 1, al. 1, item 3 – 5 to issue equity instruments of the basic first-order in favour of the holders of such instruments. The equity can be converted when the following conditions are met:

1. the instruments of the basic own funds of the first order are issued by the institution or company under art. 1, al. 1, item 3-5 or on its/his parent after consent from BNB, respectively by the Commission or to the body for the restructuring of the parent, when it is different;

2. the instruments of the basic own funds of the first order are issued before the issuance of instruments for property of the institution or company under art. 1, al. 1, item 3-5 with the aim of raising equity capital from the State or from public office or undertaking;

3. the instruments of the basic own funds of the first order are submitted and passed immediately after the exercise of the powers for the conversion;

4. the conversion rate to be determined by the number of the basic tools of private capital, which are available for each equity instrument, is consistent with the principles set out in art. 77.

(4) in view of the possibility of providing the basic tools of private capital in accordance with para. 3 the authority may require the restructuring of the institution or company under art. 1, al. 1, item 3-5 the prior decisions, approvals and authorizations for the issuance of the relevant number of instruments in the underlying equity.

Procedure to reconcile the findings in relation to art. 90

Art. 93. (1) before taking a decision under art. 90, para. 1, item 2 – 4 and 6 in respect of the institution, licensed in the Republic of Bulgaria, which is a subsidiary of the parent undertaking by the European Union and has issued them the equity instruments recognised for the purposes of the implementation of the capital requirements on an individual basis, and on a consolidated basis in terms of group, BNB, respectively, the Commission shall immediately notify the supervisor and if different – the appropriate authority of its Member State.

(2) before taking a decision under art. 90, para. 1, item 4 regarding the institution or company under art. 1, al. 1, item 3-5, which is a subsidiary of the institution or a financial holding company to which the BANK, respectively, the Commission is consolidating supervisor, and was issued the relevant equity instruments recognised for the purposes of the implementation of the capital requirements of individual and consolidated basis, BNB, respectively, the Commission shall immediately:

1. the competent authorities responsible for any institution or society of art. 1, al. 1, item 3-5, the equity instruments issued in respect of that will exercise powers for depreciation or transformation, if such a decision is taken;

2. the appropriate authorities of the Member States, the competent authorities referred to in paragraph 1.

(3) in the notice referred to in paragraph 1. 1 or 2, the Commission accordingly, stating the reasons why it is considered a solution.

(4) where a decision under art. 90, para. 1, item 3-6 in terms of institution or group carrying out cross-border activity, BNB, respectively, and other appropriate authorities take into account the potential impact of the restructuring in all Member States in which the institution or group activity.

(5) after completion of a notification under paragraph 1. 1 or 2, and after consultation with BNB respectively notified bodies, the Commission, carries out the assessment whether:

1. can be applied an alternative measure of the exercise of the powers of devaluation or conversion under art. 90, para. 1;

2. the measure referred to in paragraph 1 may result in reasonable time to remedy the circumstances requiring a decision under art. 90, para. 1.

(6) alternative measures under para. 5, item 1 are early intervention measures under art. 44, measures under art. 103, para. 2 and art. 103 a, para. 1 of the law on credit institutions, respectively, under art. 118, para. 1 of the law on markets in financial instruments, or similar measures of the relevant applicable law, transfer of funds or the increase of the capital of the parent undertaking.

(7) If, after the consultation with the notified bodies assessment under paragraph 1. 5 is positive, BNB, respectively, the Commission ensures the application of such a measure.

(8) if in the case referred to in paragraph 1. 1 and under paragraph 4. 5, BNB, respectively, the Commission considers that it is not possible an alternative measure, she decides to take a decision under art. 90, para. 1.

(9) When the BNB, respectively, the Commission considers that the need to make a decision under art. 90, para. 1, paragraph 4, it shall immediately inform the appropriate authorities of the Member States, which are located in the respective subsidiaries, and the decision is taken jointly under art. 126, para. 5. in the absence of a joint decision, respectively, the Commission did not apply the procedure under art. 90, para. 1, item 4 in respect of the relevant equity instruments.

Chapter sixteen

POWERS TO RESTRUCTURE

General powers


Art. 94. (1) the authority to restructure under art. 2 or under art. 3 apply the instruments of restructuring in terms of institutions and companies under art. 1, al. 1, item 3 – 5 eligible for restructuring.

(2) in the exercise of powers under para. 1 the authority to restructure has the right:

1. to require any person to provide the information necessary for the purposes of updating and supplementing the information in the restructuring plans, as well as the provision of information on-the-spot checks;

2. to take control of the institution in restructuring mode and to exercise all the rights of shareholders and the steering body of the institution in restructuring mode;

3. to transfer ownership of the tools issued by the institution in restructuring mode;

4. to transfer to another entity with his consent rights, assets or liabilities of the institution in restructuring mode;

5. to cut, including to zero, the principal or the amount due on the eligible institution's obligations under the restructuring;

6. to convert the eligible institution's obligations under the restructuring in ordinary shares of that institution or company under art. 1, al. 1, item 3-5, or of the institution concerned;

7. to invalidate debt instruments issued by the institution in restructuring mode, with the exception of the secured obligations and subject to art. 66, para. (2);

8. to reduce to zero, including the nominal value of the shares and other instruments of ownership to the institution in restructuring mode and to invalidate those shares and other instruments of property;

9. to request the institution in restructuring mode or the relevant institution to issue new shares or other equity instruments, including convertible subject;

10. to change the maturity of debt instruments and other reasonable duties, issued by the institution in restructuring mode or to change the amount of the interest due on such tools and other reasonable duties, or the date on which the interest became payable, including to stop payments for a certain period of time, except in the case of collateralised debt obligations and subject to art. 66, para. (2);

11. to close or suspend contracts or financial derivatives contracts in the application of art. 76;

12. release and/or replace one or more members of the management organ or the senior management personnel of the institution in restructuring mode;

13. to request a timely assessment of the person who acquires a qualifying holding, irrespective of the time limits laid down in chapter III, section III of the law on credit institutions, respectively, under art. 26 (b), para. 4 of the law on markets in financial instruments.

(3) in the execution of the decisions referred to in paragraph 1. 1 do not apply restrictions arising from:

1. existing powers for approval or consent of a public or private person, including shareholders or creditors of the institution in restructuring mode, except when applied to art. (4);

2. the existing requirements for advance notification of certain persons, including a requirement for publication of notice or prospectus or for submission, or for the registration of documents in another body, with the exception of notifications under art. 113 and 115 and in the law on State aid and the legal framework of the European Union for State aid.

Additional powers

Art. 95. (1) in exercising the power to restructure the authority to restructure under art. 2 or under art. 3 has the right:

1. in compliance with the art. 110 to create necessary conditions for this transfer should not be burdened with obligations or encumbrances affecting the transferred financial instruments, rights, assets or liabilities, using for this purpose the right to compensation in accordance with this law shall not be considered an obligation or burden;

2. to cancel the rights for future acquisition of shares;

3. to request the relevant authority to terminate or to suspend the admission to trading on a regulated market or the official registration of financial instruments in accordance with the law for public offering of securities or the relevant applicable legislation;

4. to create the necessary conditions for it to be treated as the transferee institution in restructuring mode with respect to any of its rights or obligations or has taken action, including rights and obligations related to the participation in market infrastructure, in application of art. 58 and 60;

5. to request the institution in restructuring mode or by the acquirer to provide the other party with information and assistance;

6. to amend or terminate the contract, in which country is the institution in restructuring mode, or to replace the transferee as a party to the contract.

(2) the authority shall exercise the powers conferred on restructuring under para. 1 only where this is necessary for the attainment of the results of the action on the restructuring or of one or more of the objectives of the restructuring.

(3) the authority to restructure takes measures to ensure the continuity of the business, in order to ensure the achievement of the results of the action on the restructuring and, where applicable, the possibility to transfer the transferee carries out an economic activity.

(4) the measures referred to in paragraph 1. 3 apply through the disposition of the body when the restructuring concern:

1. the continuation of contracts concluded by the institution in restructuring mode so that the transferee to take up its rights and obligations related to the transferred financial instruments, rights, assets or liabilities, and to replace the institution in restructuring mode in all relevant contractual documents;

2. the replacement of the institution in restructuring mode with the transferee in court proceedings related to the transferred financial instruments, rights, assets or liabilities.

(5) the Provisions under para. 4 have effect notwithstanding the existing restrictions on the transfer of claims and obligations under national legislation.

(6) the powers under para. 1, item 4 and al. 4, item 2 shall not affect:

1. the right of an employee of the institution in restructuring mode to terminate a contract of employment;

2. in compliance with the art. 101-103 the right of each party to a contract to exercise rights under the contract, including the right to terminate it when there's this right in accordance with the contractual terms and conditions, resulting from an act or omission on the part of the institution in restructuring mode before the transfer or by the transferee once the transfer has been made.

The power requirement for the provision of services and facilities

Art. 96. (1) the authority to restructure under art. 2, respectively, under art. 3, may request the institution in restructuring mode or of the entities of its group to provide services or facilities which are necessary to enable the transferee to perform effectively transferred its business, and which cannot be provided by another vendor in reasonable time and with less cost. When insolvency proceedings have been instituted in respect of the institution of the first sentence, the administrator provides the implementation of the said requirements.

(2) when the authorities for the restructuring from other Member States have analogous to those referred to in para. 1 obligations in terms of institution or company of the group, established in the Republic of Bulgaria, the restructuring authority has the right to have their respect.

(3) the services and facilities in the Al. 1 and 2 shall be limited to the operational services and facilities and do not include financial support.

(4) the services and facilities in the Al. 1 and 2 are provided:

1. When were provided by agreement of the institution in restructuring mode before action taken in restructuring – under the same conditions and terms as those of the agreement;

2. when there is no agreement or expired – at reasonable conditions.

Applicable law in the execution of crisis management measures or measures to prevent crises from other Member States

Art. 97. (1) where, on the restructuring of the institution or company of the group in another Member State to transfer assets which are located in the Republic of Bulgaria, or the rights or obligations set forth under Bulgarian law, the transfer shall be carried out in accordance with this law and the applicable Bulgarian law.

(2) the authority to restructure under art. 2, respectively, under art. 3 provide reasonable assistance to the restructuring authority of a Member State, that carries on or intends to carry out a transfer under paragraph 1. 1, to ensure that the instruments of property or assets, rights or obligations are transferred to the transferee in accordance with applicable law.

(3) shareholders, creditors and third parties affected by the transfer under paragraph 1. 1, do not have the right to challenge or to request deletion of the effects of the transfer on the basis of the provisions of the Bulgarian legislation or any other legislation governing shares, other instruments of ownership, rights or obligations.

(4) where restructuring authority of another Member State has exercised the power of compounding or conversion and the eligible liabilities or equity instruments of the respective institution in restructuring mode include instruments or obligations in respect of which is subject to the legislation of the Republic of Bulgaria, or liabilities to creditors in the Republic of Bulgaria, the principal of these liabilities or instruments shall be reduced or obligations or instruments shall be converted in accordance with the powers to devaluation or conversion exercised by the authority for the restructuring of the other Member State.

(5) Creditors affected by the exercise of those referred to in para. 4 the power of compounding, conversion or do not have the right to challenge a reduction of the amount of the principal of the instrument or of the obligation or its conversion on the basis of the provisions of the legislation of the Republic of Bulgaria.


(6) the restructuring measures under para. 1 and 4 be appealed according to the procedures provided for in the legislation of the Member State in which it is established the appropriate authority restructuring. The legislation of that Member State shall also apply to partial transfers under para. 1, which provides for safeguards in this case.

Applicable law in the execution of crisis management measures or measures to prevent crises in other Member States

Art. 98. (1) where, on the restructuring of the authority for the restructuring under art. 2, respectively, under art. 3 the institution or company under art. 1, al. 1, item 3 – 5 are transferred assets, rights or obligations that are found in another Member State, the transfer shall be carried out in accordance with the applicable legislation of that Member State.

(2) the authority in restructuring under para. 1 may seek the assistance of the authority for the restructuring of the Member State under paragraph 1. 1, to ensure that the instruments of property or assets, rights or obligations are transferred to the transferee in accordance with applicable law.

(3) where the authority to restructure under para. 1 exercise the power of compounding or conversion and the eligible liabilities or equity instruments of the respective institution in restructuring mode include instruments or obligations in respect of which are subject to the legislation of another Member State, or liabilities to creditors in that Member State, the principal of these liabilities or instruments shall be reduced or obligations or instruments shall be converted in accordance with the powers to devaluation or conversion exercised by the authority to restructure under para. 1 under this Act.

(4) the restructuring measures under para. 1 and 3 are appealed by the order of art. 117.

Powers in relation to assets, rights, obligations, shares and other instruments of property located in third countries

Art. 99. (1) where restructuring action includes action in respect of assets that are located in a third State, or of shares or other instruments of ownership, rights or obligations provided for by the legislation of a third State, the authority to restructure under art. 2, respectively, under art. 3, may order:

1. the extraordinary Manager, trustee, or other person exercising control over the institution in restructuring mode, and the transferee to take all necessary measures to effect the transfer, breeds the devaluation, conversion or action;

2. the extraordinary Manager, trustee, or other person exercising control over the institution in restructuring mode, continue to hold the shares, the other instruments of property, assets or rights or obligations on behalf of the transferee as breeds, the depreciation transfer effects, conversion or action;

3. reasonable expenses incurred by the lawful acquirer in conducting the action required pursuant to paragraphs 1 and 2, to be covered by one of the means referred to in art. 57, al. 6.

(2) where the authority to restructure under para. 1 considers that despite the measures taken by the extraordinary administrator, Manager or other person in accordance with para. 1, item 1, there is a high probability that the transfer, depreciation, conversion or action does not affect certain assets located in a third country, or in respect of certain shares, other instruments of ownership, rights or obligations laid down by the legislation of the third country shall not transfer, depreciation, conversion or action. If their performance has been ordered, the order does not take effect in respect of assets or shares, other instruments of ownership, rights or obligations under the first sentence.

Exclusion of certain contractual conditions in early intervention and restructuring

Art. 100. (1) a measure of crisis prevention or crisis management measure applied to an institution or a company under art. 1, al. 1, item 3-5, including the occurrence of an event that is directly related to the implementation of such a measure, it is not considered a default within the meaning of art. 10 of the law on financial collateral agreements or prekratitelna procedure within the meaning of the law on payment services and payment systems under the treaties to which that institution or company is a party, provided that it continues implementing the essential contractual obligations, including obligations to pay and performance, and to ensure security.

(2) Any measure for crisis prevention or crisis management measure is not considered to be a failure or a prekratitelna procedure under para. 1 and under contract, that party is:

1. a subsidiary, if obligations are secured or entered into by the parent undertaking or of another entity of the group, or

2. subject of the group when in the contract included provision for cross-compliance.

(3) when the procedures for the restructuring of a third country recognised in accordance to art. 129 or in other cases where the authority to restructure under art. 2 or under art. 3 has taken a decision to this effect, for the purposes of this article, these procedures are a measure of crisis management.

(4) provided that the fulfilment of the contractual obligations, including obligations to continue payment and performance, as well as for the provision of a security measure for crisis prevention or crisis management measure, including the occurrence of an event that is directly related to the implementation of such a measure, cannot serve as the basis of a party to a contract to carry out the following:

1. to exercise his right of termination, suspension, amendment, netting or set-off, including in relation to a contract concluded by the:

a) subsidiary, if obligations are secured or assumed by the entity of the group, or

(b) the subject of the Group), if it includes provisions cross-default;

2. to obtain the possession, control or obtain the execution of guarantee on the property of the institution or company under art. 1, al. 1, item 3-5, or entity of the group in relation to a treaty that includes provisions cross-default;

3. to affect contractual rights of the institution or company under art. 1, al. 1, item 3-5, or entity of the group in relation to a treaty that includes provisions cross-default.

(5) the provisions of this article shall not affect the exercise of the right under paragraph 1. 4, when the basis for its exercise is an event other than a measure of crisis prevention or crisis management measure or by the occurrence of an event that is directly related to the implementation of such a measure.

(6) the suspension or restriction under art. 101-103 is not considered a breach of contractual obligation for the purposes of paragraphs 1 and 2. 1.

(7) the provisions of this article shall be regarded as overriding mandatory provisions within the meaning of art. 9 of Council Regulation (EC) no 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) (OB, L 177/6 from 4 July 2008).

Powers to suspend the fulfilment of certain obligations

Art. 101. (1) the authority to restructure under art. 2 or under art. 3 may suspend the execution of the payment or delivery obligations under the treaties to which the institution in restructuring mode is a party, as from the time of publication of a notice of suspension in accordance with art. 115, para. 4 to midnight on the next working day.

(2) when the maturity of an obligation for payment or delivery occurs within the period of the suspension, payment or performance becomes due immediately after expiry of the period of suspension.

(3) in the event that the performance under para. 1 is suspended, the fulfilment of the obligations of the institution's counterparties in restructuring mode for payment or delivery in the same contract shall be suspended for the same period.

(4) suspension pursuant to para. 1 shall not apply to:

1. eligible deposits within the meaning of § 1, item 45 of the supplementary provisions;

2. payment and delivery obligations to systems or system operators as defined for the purposes of the Act on payment services and payment systems or the applicable law of a Member State, central counterparties and central banks;

3. the eligible claims within the meaning of title III, Chapter 5, section IV of the law on public offering of securities.

(5) in exercising the powers under this article, the authority shall take into account the restructuring of its possible impact on the normal functioning of financial markets.

Limitation of enforcement of secured interests

Art. 102. (1) the authority to restructure under art. 2 or under art. 3 may limit the right of secured creditors of the institution in restructuring mode to take enforcement action with respect to the assets of the institution in restructuring mode from the moment of publication of the notice of the restriction in accordance with art. 115, para. 4 to midnight on the next working day.

(2) the authority shall not exercise the power restructuring under para. 1 in the case of secured interests of systems or system operators as defined for the purposes of ensuring the finality of settlement pursuant to the law on payment services and payment systems and the relevant applicable law, central counterparties and central banks in connection with the assets pledged by the institution in restructuring mode or submitted by that institution in the form of margin or collateral.

(3) When applied to art. 112 the restructuring within the limits of their powers, ordered the same restrictions under para. 1 for all entities of the group, in respect of which action is undertaken in a restructuring.

(4) in exercising the powers under this article, the authority shall take into account the restructuring of the possible impact of the decision on the proper functioning of financial markets.


Suspension of the exercise of the right of termination

Art. 103. (1) the authority to restructure under art. 2 or under art. 3 may suspend the exercise of rights of termination of each party to a contract with the institution in restructuring mode from the moment of publication of the notice in accordance with art. 115, para. 4 to midnight on the next working day, provided that it continues to fulfil its obligations of payment and delivery and for the provision of security.

(2) the authority may suspend the restructuring exercise of the right of each party to a contract with a subsidiary of the institution in restructuring mode when:

1. the obligations under this contract are guaranteed or secured by the institution in restructuring mode;

2. the right of termination is based solely on insolvency or financial position of the institution in restructuring mode;

3. in respect of the institution in restructuring mode has been exercised or can be exercised the power to transfer, in which:

a) all related to the contract, the assets and liabilities of the subsidiary were transferred or may be transferred to or taken over by the transferee, or

(b) provide for restructuring) the authority otherwise proper protection of those obligations.

(3) the decision to halt the Al. 2 shall take effect from the date of publication of the notice in accordance with art. 115, para. 4 to midnight on the next working day in the Republic of Bulgaria or in the Member State in which the subsidiary is established the institution in restructuring mode.

(4) a suspension under subsection. 1 and 2 shall not apply in respect of systems or system operators to ensure finality of settlement pursuant to the law on payment services and payment systems or the relevant applicable law, central counterparties, or central banks.

(5) a party to a contract with an institution in restructuring mode can exercise his right to terminate it before the end of the period referred to in para. 1 and 3, if received a message from the restructuring, that the rights and obligations under the contract will not be:

1. transferred to another entity, or

2. subject to the write-down or conversion in the implementation of the instrument for the sharing of losses in accordance with art. 65, para. 1, item 1.

(6) where the authority for the restructuring exercise the powers under para. 1 and 2 and has not been sent a message in accordance with para. 5 right of termination may be exercised after the expiry of the period of suspension in accordance with the art. 100, as follows:

1. when rights and obligations under the contract are transferred to another entity, the Contracting Party may exercise the right of termination in accordance with relevant contractual terms and conditions solely in the event of continuing or subsequent event that is a ground for termination of the contract;

2. where the institution in restructuring mode preserves the rights and obligations under the contract and the restructuring is not applied the tool to share losses with respect to this agreement, the Contracting Party may exercise rights of termination is given in accordance with the contractual terms and conditions after the expiry of the suspension referred to in paragraph 1. 1 or al. 3.

(7) in the exercise of a power under this article, the authority shall take into account the restructuring of its possible impact on the normal functioning of financial markets.

(8) the institution or company under art. 1, al. 1, item 3-5 keep detailed records of financial contracts within the meaning of § 1, item 83.

Exercise of powers to restructure

Art. 104. (1) for the purpose of taking action on the restructuring restructuring authority under art. 2 or under art. 3 may exercise control over the institution in restructuring mode, such as:

1. perform the powers of the shareholders and the management body on her, so as to ensure the completion and implementation of the activities and services of the institution in restructuring mode, and

2. manage and dispose of the assets and property of the institution in restructuring mode.

(2) under para. 1 exercise of authority mandatory restructuring arrangements to the steering body of the institution in restructuring mode or by appointments emergency Manager.

(3) during the period of restructuring restructuring authority stops the exercise by shareholders of voting rights on shares of the institution in restructuring mode.

(4) the authority for the restructuring may take action on restructuring and without exercise control under paragraph 1. 1 on the institution in restructuring mode.

(5) the authority to restructure assess in each case whether the restructuring action to be taken by the exercise of supervision pursuant to para. 1 or without exerting control in accordance with para. 4. For the execution of the judgment shall take account of the objectives and general principles of the restructuring, the circumstances with regard to the institution under the restructuring and the need to facilitate the successful restructuring of cross-border groups.

Chapter Seventeen

DEFENSE MECHANISMS

Treatment of shareholders and creditors for partial transfers and when using the tool for sharing of losses

Art. 105. (1) where at the time of action on restructuring the restructuring under art. 2 or under art. 3 has transferred part of the rights, assets and liabilities of the institution under the restructuring, shareholders and creditors, whose claims have not been transferred, receive for their claims at least what you would get if you would be openly against the institution of insolvency proceedings at the date of the decision under art. 114.

(2) where the authority has implemented a restructuring tool for sharing losses, shareholders and creditors, whose claims have been impaired or converted to equity, should not suffer greater losses than those who would suffer, if the institution would be open insolvency proceedings at the date of the decision under art. 114.

Evaluation of the difference in treatment

Art. 106. (1) after completion of the action or the action on restructuring the restructuring under art. 2, respectively, under art. 3, promptly ordered an assessment of whether the independent shareholders and creditors would receive better treatment in insolvency proceedings. This assessment is different from the assessment under art. 55.

(2) the assessment under paragraph 1. 1 shall be determined:

1. the amount that shareholders, creditors or FGVB would have received for their claims, according to the loss that would be suffered in the opening of insolvency proceedings on the date of the decision under art. 114;

2. the actual amount that shareholders and creditors have received for their claims, respectively, which have suffered in the restructuring of the institution;

3. the existence of a difference between the amounts referred to in paragraphs 1 and 2.

(3) in the preparation of the assessment under paragraph 1. 1 shall be granted in respect of the institution in restructuring mode:

1. be open insolvency proceedings at the date of the decision under art. 114 and restructuring action has taken place;

2. do not take into account the possible provision of extraordinary public financial support.

Safeguards for shareholders and creditors

Art. 107. in the event that the assessment under art. 106 it is found that the shareholder, creditor or FGVB has suffered greater losses than they suffered in the dissolution of the institution through bankruptcy proceedings, he shall be entitled to be paid the difference of PBF, FPIP respectively.

Safeguards for counterparties to partial transfers

Art. 108. (1) where the authority to restructure under art. 2 or under art. 3 has taken action on restructuring, which transferred part of the rights, assets and liabilities of the institution in restructuring mode to another person, or in case of application of the instrument for restructuring-part of the rights are transferred, the assets and liabilities of the bridge institution or society for the management of assets to another person and in the exercise of its powers under art. 95, para. 1, item 6 shall apply the protection under art. 109-112 the following contracts and the parties thereto:

1. collateral agreements under which the collateral person has rights, including contingent, on the assets or rights, which are the subject of a transfer, regardless of whether the right was secured by specific assets or rights, or who can be replaced;

2. financial collateral contracts with transfer of ownership under which a collateral provider, to ensure the fulfilment of certain obligations, transfers full ownership of certain assets of the collateral person, provided that the collateral person transferred assets back if those obligations are fulfilled;

3. the offsetting agreements, under which two or more claims or debts due between the institution and the other party to the agreement may be intercepted;

4. netting agreements;

5. the covered bonds;

6. structured finance agreements, including securitisations and tools that are used for the purpose of hedging, which form an integral part of the coverage and which, according to the applicable law of a Member State are covered in a similar way with covered bonds, including presentation and the holding of a security by a party or by a trustee, agent or representative.

(2) paragraph 1 shall apply regardless of:

1. the number of parties to the agreement or contract;

2. from the format and purpose of the agreement or contract;

3. does the agreement or treaty arises or is regulated wholly or partially by the law of another Member State or a third State.

(3) in the cases referred to in para. 1 apply the powers provided for in art. 100 – 103.

Protection of financial collateral arrangements, arrangements for offsetting and netting agreements


Art. 109. (1) in exercising the powers under this Act, the authority to restructure under art. 2, respectively, under art. 3, may not transfer the rights and obligations in part under contract for financial collateral with a transfer of ownership, the interception and agreements on netting agreements, enabling the parties to intercept or to offset their rights and obligations, nor to amend or terminate these rights or obligations.

(2) Notwithstanding para. 1, when it is necessary to ensure the availability of guaranteed deposits, may:

1. transfer the guaranteed deposits covered by any of the agreements referred to in para. 1 without transferring rights or other assets liabilities covered by the same agreement;

2. transfer, modify or terminate such assets, rights or obligations referred to in paragraph 1, without transferring the guaranteed deposits.

Protect the collateral agreements

Art. 110. (1) in exercising its powers under this Act, the authority to restructure under art. 2, respectively, under art. 3 may:

1. to transfer assets, with which it has secured a commitment, unless this obligation and security are also transferred;

2. to transfer the secured obligation unless the collateral is also transferred;

3. to transfer the collateral, unless the collateral obligation is also transferred, or

4. to amend or terminate contracts for security in the exercise of its powers under this Act, if the result of such amendment or termination, the obligation ceases to be secured.

(2) Notwithstanding para. 1, when it is necessary to ensure the availability of guaranteed deposits, the BANK may:

1. to transfer guaranteed deposits covered by any of the agreements referred to in para. 1 without transferring rights or other assets liabilities covered by the same agreement;

2. to transfer, amended or terminated, assets, rights or obligations referred to in paragraph 1, without transferring the guaranteed deposits.

Protection of structured finance agreements and covered bonds

Art. 111. (1) in exercising its powers under this Act, the authority to restructure under art. 2, respectively, under art. 3 may:

1. to transfer partial assets, rights and obligations that constitute or are part of a structured finance agreements, including those on art. 108, para. 1, item 5 and 6, in which a party's institution in restructuring mode;

2. in exercising his powers under this Act to terminate or amend the assets, rights and obligations that constitute or are part of a structured finance agreements, including those on art. 108, para. 1, item 5 and 6, in which a party's institution in restructuring mode.

(2) Notwithstanding para. 1, when it is necessary to ensure the availability of guaranteed deposits, the BANK may:

1. to transfer guaranteed deposits covered by any of the agreements referred to in para. 1 without transferring rights or other assets liabilities covered by the same agreement;

2. to transfer, amended or terminated, assets, rights or obligations referred to in paragraph 1, without transferring the guaranteed deposits.

Protection systems to ensure finality of settlement

Art. 112. (1) the application of an instrument for restructuring does not affect the operation and rules of payment systems and securities settlement systems, which provide for finality of settlement under the law on payment services and payment systems and the relevant applicable law, where the authority to restructure under art. 2 or under art. 3:

1. transfer to another part of the assets, rights or obligations of the institution in restructuring mode, and

2. exercise the powers under art. 95 to invalidate or amend the terms of a contract to which the institution in restructuring mode is a party, or to replace the acquirer as a party to it.

(2) transfer, cancellation or amendment under paragraph 1. 1 shall be made in accordance with the terms of irrevocability of transfer order, the requirements for the implementation of translation and netting and collateral protection in payment systems and securities settlement systems with the finality of settlement pursuant to the law on payment services and payment systems and the relevant applicable legislation.

Chapter eighteen

PROCEDURAL OBLIGATIONS

Requirements for notification

Art. 113. (1) the Management Board respectively the Governors, the Board of Directors of the institution or company under art. 1, al. 1, item 3-5 shall notify BNB, respectively, the Commission, in its capacity as competent authority under the law on credit institutions, respectively, under the law on markets in financial instruments, where it considers that the institution or company are problematic or is likely to become a problem within the meaning of art. 51, para. 3.

(2) the competent authority under paragraph 1. 1 inform the relevant authorities of restructuring for all notifications received under paragraph 1. 1 and of the measures to prevent crises or actions which require to be taken by the institution or company under art. 1, al. 1, item 3 – 5 in the application of supervisory measures under the Act on credit institutions, respectively, under the law on markets in financial instruments.

(3) where it finds that, in respect of the institution or company under art. 1, al. 1, item 3-5 are there conditions under art. 51, para. 1, paragraphs 1 and 2, the competent authority referred to in paragraph 1. 1 inform:

1. the competent authorities of all branches of the institution or company under art. 1, al. 1, item 3-5;

2. the authorities of restructuring for all branches of the institution or company under art. 1, al. 1, item 3-5;

3. the Central Bank, where applicable;

4. the Governing Board of the FGVB, according to the FKI, it is likely to take action, in accordance with their statutory powers;

5. the restructuring of the group, where applicable;

6. The Ministry of finance;

7. the supervisor, in the event that the institution or company under art. 1, al. 1, item 3-5 fall within the scope of supervision on a consolidated basis;

8. the European systemic risk Board.

Decision on restructuring the authority for acting on restructuring

Art. 114. After evaluating whether there are conditions for restructuring in relation to an institution or society of art. 1, al. 1, item 3-5, on the basis of the notification according to art. 113, para. 1 or on its own initiative the authority to restructure under art. 2, respectively, under art. 3, decide whether to take action on the restructuring, the decision shall contain at least the following:

1. the reasons for this decision, including considering whether the institution satisfies the conditions for restructuring aid under art. 51;

2. the instruments of restructuring, which the authority intends to implement the restructuring, restructuring actions it intends to take, the powers to restructure, which intends to exercise, or when it is appropriate – a proposal to proceed with the withdrawal of the licence and liquidation or to withdrawal of the licence and making a request to the competent court for the opening of insolvency proceedings.

Procedural obligations of the authority for the restructuring

Art. 115. (1) after restructuring action in accordance with the decision referred to in art. 114, para. 1, the authority shall notify restructuring the institution in restructuring mode, as well as:

1. the competent authorities for branches of the institution in restructuring mode;

2. The Bulgarian National Bank, where the institution is an investment firm;

3. the Governing Board of the FGVB, according to the Board of FKI;

4. the restructuring of the group level where appropriate;

5. The Ministry of Finance of the Republic of Bulgaria;

6. the supervisor in cases in which the institution under the restructuring falls within the scope of supervision on a consolidated basis;

7. The European Commission, the ESRB, the EBA, the ECB, the European Securities and markets authority and the European insurance and occupational pensions authority;

8. operators of payment systems and securities settlement systems, in which the institution is involved.

(2) The notification referred to in para. 1 a copy of the Act applies, take action on restructuring, with an indication of the date on which they give rise to consequences.

(3) a copy of the Act, to take action on restructuring, or a message about the consequences of it for the customers of the institution under the restructuring, as well as the procedure and the time limit in the event of suspension or restriction under art. 101-103 shall be published:

1. the website of the Bulgarian National Bank, according to the Commission;

2. on the Internet site of the institution in restructuring mode;

3. at the request of the authority for the restructuring-in the commercial register when the restructuring entails a change of circumstances subject to entry;

4. in the event that the instruments of property or debt instruments of the institution in restructuring mode are admitted to trading on a regulated market in accordance with the arrangements for disclosure of regulated information.

(4) If the instruments of property or debt instruments not admitted to trading on a regulated market, restructuring the authority sends the messages in al. 3 the shareholders and creditors of the institution in restructuring mode, which can be established through the registers or databases of the institution under the restructuring, which are available to the authority for the restructuring.

(5) where restructuring activities include the granting of State aid, including the use of funds from the PBF, FPIP, respectively the decision under art. 114, para. 1 shall be taken, respectively, the Act which take action on restructuring, be taken after receipt of a positive or conditional decision by the European Commission on the compatibility of State aid with the internal market. In these cases, the relevant authority is the administrator of restructuring aid within the meaning of § 1, item 4 of the additional provisions of the law on State aid.

Privacy policy


Art. 116. (1) in respect of the use of information acquired by and produced in conjunction with the recovery and restructuring of institutions and entities under art. 1, al. 1, item 3 to 7, shall apply the requirements of this article for professional secrecy, as this information is only used for the performance of duties arising from this Act.

(2) the requirements of professional secrecy are required to:

1. The Bulgarian National Bank;

2. The financial supervision Commission;

3. The Ministry of Finance of the Republic of Bulgaria;

4. exceptional or temporary managers;

5. potential acquirers, the restructuring authority under art. 2 or under art. 3 has made a proposal, whether it is done as a preparation for the use of the instrument of sale of business and whether the proposal has led to a purchase transaction;

6. Auditors, accountants, legal and professional advisors, appraisers and other experts, employed directly or indirectly by the BANK, the Commission, the Ministry of finance or of the potential acquirers, referred to in paragraph 5;

7. The Fund for guaranteeing bank deposits;

8. the investor compensation fund;

9. other bodies involved in the process of restructuring, where applicable;

10. mostovata an institution and an asset management company;

11. any other person who, directly or indirectly, provides or a permanent or temporary basis is provided services to the persons referred to in item 1 – 10;

12. staff members of the management and control bodies, and all other persons working for the bodies or entities referred to in item 1-11, before, during and after their appointment.

(3) in order to ensure compliance with the requirements of this article, the persons referred to in paragraph 1. 1.1-3 and 7-10, adopted internal rules, including rules to ensure the maintenance of professional secrecy by the persons directly involved in the restructuring process.

(4) the persons referred to in para. 1 shall not disclose confidential information covered by professional secrecy, which they received from BNB, by the Commission or by any other competent authority, or a body of restructuring in accordance with and for the purposes of this Act in the performance of their activities, unless the information is disclosed in the exercise of their functions under this Act in summary form so that they cannot be identified institutions or entities referred to in art. 1, al. 1, item 3 – 7, to which it relates, or after the explicit and prior consent of the Bulgarian National Bank, Commission, authority, institution, or the entity referred to in art. 1, al. 1, item 3 – 7, which provided the information.

(5) upon the disclosure of information in the cases referred to in para. 4 evaluate the possible consequences of its disclosure on: public interest connected with the financial, monetary or economic policy; the commercial interests of natural and legal persons; the purpose of the checks carried out; investigations and audits. The procedure for assessing the implications of disclosure of information ensures that a specific assessment is made of the consequences of the disclosure of the contents and details of plans for restructuring and recovery and the outcome of the assessments of recovery plans and the possibility of restructuring.

(6) the requirements of paragraphs 1 and 2. 1-5 do not prevent:

1. employees and persons working for the bodies or entities referred to in para. 1, item 1-10, to exchange information with each other within each organ or entity, or

2. employees and persons working for the BANK, respectively, for the Commission, to exchange for the purposes of the planning or execution of an act on restructuring information with each other, with other restructuring authority in the Republic of Bulgaria, with other bodies for restructuring in the European Union, with other competent bodies of the European Union, with the Ministry of finance, with FGVB, with FKI, a competent court for bankruptcy proceedings with the Auditors of the financial statements of the institutions or bodies referred to in art. 1, al. 1, item 3-7, with the bodies of EBA or third countries that perform functions, restructuring or, subject to the confidentiality requirements – a potential acquirer.

(7) Notwithstanding the other provisions of this article, the Commission accordingly, in full compliance with the requirements of confidentiality may share information with other entities where that is necessary for the purposes of the planning and implementation of the action on the restructuring.

(8) This article shall be without prejudice to the disclosure of information for the purposes of court proceedings in civil or criminal cases, which shall be carried out in the relevant line.

Chapter nineteen

RIGHT OF APPEAL AND THE EXCLUSION OF OTHER ACTIONS

Right of appeal of decisions

Art. 117. (1) the decision to take measure to prevent crises or the decision on the exercise of a power under this Act, other than the application of the measure for crisis management, subject to appeal before the Supreme Administrative Court (SAC).

(2) the decision to undertake crisis management measure is subject to an appeal to you from all the affected parties. In these cases, the Court shall decide in due time and justifying its assessment on the checks carried out by the BULGARIAN NATIONAL BANK, respectively, by the Commission, the complex economic assessments of the facts.

(3) an appeal under para. 1 and 2 did not stop the implementation of the decisions of the BULGARIAN NATIONAL BANK, according to the Commission.

(4) the cancellation of the decisions of the Bulgarian National Bank, according to the Commission, under par. 1 and 2 shall not affect the validity of the subsequent administrative acts and the rights of third parties in good faith acquired on the basis of the repealed decision or administrative acts issued on the basis of it. In this case, you may seek compensation only for damage suffered as a result of the unlawful decision or action of the Bulgarian National Bank and the Commission.

Limitations of other legal proceedings

Art. 118. (1) where the conditions for restructuring, insolvency proceedings in respect of the company under art. 1, al. 1, item 2-5 is found only at the request of the authority, to restructure under art. 2, respectively, under art. 3, or after prior consent of the authority for the restructuring.

(2) in the cases referred to in para. 1, the Court shall notify the authority of restructuring for each application for opening of insolvency proceedings under art. 1, al. 1, item 2 – 5. In these cases, the Court shall decide on the request after receiving information from the restructuring that he does not intend to take action on restructuring in respect of an investment firm or entity of the group. The restructuring provides the information to the Court within seven days from the date of the notification referred to in the first sentence.

(3) the authority to restructure may ask the Court to stop any legal action or proceedings to which the institution in restructuring mode is or will be a party if this is necessary for the effective implementation of the tools and powers for the restructuring, and without prejudice to the limits of performance in relation to secured interests imposed pursuant to art. 102.

Chapter twenty

RESTRUCTURING OF CROSS-BORDER GROUPS

General principles concerning the decision-making process with the participation of more than one Member State

Art. 119. In making decisions or taking action in accordance with this law that may have an impact on one or more other Member States, the Commission, accordingly, comply with the following principles:

1. in taking action on the restructuring into efficient solutions to minimize the costs of restructuring;

2. decisions are made and actions are undertaken in a timely manner and with due dispatch, where necessary;

3. to ensure a coordinated and effective decision-making, the Commission accordingly BANK cooperates with the relevant authorities to restructure, competent authorities and other authorities of the Member States;

4. where an institution licensed in the Republic of Bulgaria, is a subsidiary of the parent undertaking by the European Union, respecting the interests of the Member State in which the undertaking is established, including mother the impact of any decision or action or inaction on financial stability, fiscal resources, the mechanism for the financing of the restructuring, the deposit-guarantee scheme or scheme to compensate investors of that Member State;

5. respect to the interests of individual Member States in which they are established subsidiaries of parent – subject to supervision by the BNB, respectively by the Commission, including the impact of any decision or action or inaction on financial stability, fiscal resources, mechanisms to finance restructuring, guarantee schemes or compensation schemes of the Member States;

6. to respect the interests of each Member State in which is situated a significant branch of the institution, licensed in the Republic of Bulgaria, including the impact of any decision or action or inaction on the financial stability of these Member States;

7. respect to achieve a balance between the interests of the Member States and the avoidance of unjust or unjustifiable damage protection of the interests of the Republic of Bulgaria or other EU Member State, including the avoidance of unfair distribution of the burden between Member States;

8. any obligation under this law for consultation with the authority before a decision is taken or action taken, means at least an obligation to consult with that body concerning the elements of the proposed decision or action that may have consequences for the parent, a subsidiary or a branch or a significant impact on the stability of the Member State in which he is established or is the parent of the European Union , a subsidiary or a significant branch;


9. in taking action on BANK restructuring, respectively, the Commission shall take into account and implement the restructuring plans, unless the BANK, respectively, the Commission and the authorities concerned consider that the restructuring in case the purpose of the restructuring will be achieved more effectively through actions which are not provided for in the restructuring plans;

10. provide the necessary degree of transparency, where a proposed decision or action may have consequences for financial stability and fiscal resources of the Republic of Bulgaria and the Member States concerned, PBF, FGVB, FPIP, FKI, as well as for restructuring funds, deposit-guarantee schemes and investor compensation schemes of other Member States, and

11. coordination and cooperation with the aim of reduction of the overall costs of the restructuring.

Colleges for restructuring

Art. 120. (1) the Bulgarian National Bank, the Commission accordingly, where authority for the restructuring of the group level, creates associations to restructure, which carry out the tasks under art. 17 – 20, 27, 30, 71, art. 72, para. 9, art. 125, 126 and 128 and provide cooperation and coordination with the authorities for the restructuring of third countries, where appropriate.

(2) the College for restructuring under para. 1 consists of the following bodies:

1. The Bulgarian National Bank, respectively the financial supervision Commission as a body for the restructuring of the Group and level of the consolidating supervisor;

2. the Ministry of Finance of the Republic of Bulgaria;

3. The Fund for guaranteeing bank deposits, where the BANK is consolidating supervisory authority;

4. The European banking authority shall be non-voting;

5. the authorities of restructuring by each Member State in which it has established a subsidiary, falling within the scope of supervision on a consolidated basis, under the responsibility of the BNB, respectively by the Commission;

6. the authorities of the Member States for the restructuring in which the company is established in art. 1, al. 1, item 5, which is part of the Group and is the mother of one or more institutions in the Group;

7. the authorities of the Member States for the restructuring, which are significant branches;

8. the competent authorities of the Member States, for which the authority to restructure is a member of the College;

9. the competent ministries, if you do not have authority to restructure;

10. the agency responsible for the deposit-guarantee scheme of the Member State where the relevant authority for the restructuring is a member of the College.

(3) the Bulgarian National Bank, according to the Commission, the other bodies for restructuring and other competent authorities participate in the work of the Chambers for the restructuring under para. 1 in accordance with the powers vested in them to perform the following goals and objectives:

1. Exchange of information on the development of the plan for the restructuring of the group, the exercise of preparatory and preventive powers in respect of the Group and its restructuring;

2. develop a plan for the restructuring of the Group;

3. assessment pursuant to art. 27 the possibility of restructuring the Group;

4. exercise pursuant to art. 30 the powers to overcome or eliminate obstacles in terms of opportunity for the restructuring of the Group;

5. a decision on the establishment of a scheme for the restructuring of the group under art. 125 and 126;

6. coordination of public relations strategy and scheme for the restructuring of the Group;

7. coordination of the use of the mechanisms for financing the restructuring;

8. determination of the minimum requirements under art. 69-71 and art. 72, para. 9 on group level and at the level of the subsidiaries.

(4) if the competent authority of a Member State under paragraph 1. 2, item 8 is not a Central Bank, it may decide to be accompanied by a representative of the Central Bank.

(5) When the parent undertaking or institution – part of the Al group. 1 have a subsidiary or a branch, which would be considered significant if it is located in the European Union, the authorities of restructuring the third States may, at their request, to be invited to participate in the College for restructuring as observers, provided that the BNB, respectively, the Commission considers that these authorities to restructure apply confidentiality requirements that are equivalent to those of art. 133.

(6) the Bulgarian National Bank, respectively, the Commission directs the activities of the College in al. 1, as:

1. approve the written rules and procedures for the operation of the College after consultation with the other members;

2. coordinate all activities of the College for restructuring;

3. convene and conduct all meetings in advance and provided to all members of the College fully informed concerning the Organization of the meetings, the main issues for discussion and the points that will be considered;

4. notify the members of the College for all scheduled meetings so that they can indicate their participation;

5. decide which members and observers will be invited to attend certain meetings of the College on the basis of the urgency of the matter, which will be discussed for these members and observers, including the potential impact on financial stability in the Member States;

6. regularly inform all members of the College for the decisions and the results of meetings under item 5.

(7) the Bulgarian National Bank, according to the Commission, and the Ministry of finance, the Governing Council of the FGVB maintain close cooperation with the members of the College in al. 1. When the College under para. 1 shall be chaired by the Commission, it shall be authorized to invite her to participate in a representative of the BANK as a Central Bank.

(8) in carrying out the assessment under paragraph 1. 6, item 5, the Commission accordingly BNB, invites:

1. all authorities for restructuring, members of the College, where the agenda included issues which are subject to the process of codecision, or

2. the appropriate authority restructuring, where the agenda included issues relating to the person of the group, established in the Member State;

3. The European banking authority.

(9) the Bulgarian National Bank, the Commission accordingly, you may not establish a College in al. 1 if another group or association shall carry out the functions and tasks under para. 3 and the conditions and procedures referred to in this article and in article 8. 123, as in this case, under the Association of restructuring within the meaning of this law shall be deemed that other group or association.

Participation in association of restructuring

Art. 121. (1) the Bulgarian National Bank, according to the Commission, the Ministry of finance and FGVB participate in the Association of restructuring, organized by the appropriate authority restructuring at the level of the group or in another group or association that performs the same functions and tasks where:

1. The Bulgarian National Bank, according to the Commission, is a body of restructuring on an individual basis to an institution that is a subsidiary of the parent undertaking of the European Union;

2. in the Republic of Bulgaria has established a significant branch of the institution of the group, or

3. the subsidiary established in the Republic of Bulgaria, is the parent of one or more institutions within the Group and is a company under art. 1, al. 1, item 5.

(2) upon participation in the College under para. 1 the Commission, respectively, perform the tasks under art. 120, para. 3 in accordance with the powers conferred.

(3) the Bulgarian National Bank, according to the Commission, have the right to participate in each meeting of the College under para. 1, where the agenda included issues which are subject to the process of codecision or that are associated with the institution, licensed in the Republic of Bulgaria, or with a company under art. 1, al. 1, item 3-5 from the group.

(4) the Bulgarian National Bank, according to the Commission, the Ministry of finance and FGVB maintain close cooperation with the members of the College in al. 1. The Commission shall take part in the College under para. 1, she has the right to invite to participate in it and a representative of the BANK as a Central Bank.

European Association for restructuring

Art. 122. (1) where the parent undertaking from a third State institution – subsidiary company licensed in the Republic of Bulgaria, as well as subsidiaries established in other Member States, or an institution of a third country has meaningful branch, established in the Republic of Bulgaria, as well as significant branches established in other Member States, the appropriate authority restructuring under art. 2, al. 1 or under art. 3, al. 1 of this Act and the restructuring of other Member States shall establish a European Association for the restructuring.

(2) where a financial holding company is established in the European Union in accordance with art. 106, para. 7 of the law on credit institutions, or with art. 70 of the law on markets in financial instruments directive, or with the equivalent provision in the legislation of a Member State, the European Association for the restructuring under para. 1 shall be chaired by the BNB, respectively by the Commission when it is authority for the restructuring of the group level.

(3) where a financial holding company is not established under para. 2, restructuring the authority under art. 2, respectively, under art. 3, and the other members of the European Association of Pará. 1 determine the President of the College.

(4) the European Association for the restructuring run on. 120 features and tasks in respect of subsidiary institutions and, where applicable, in respect of the relevant branches.

(5) the authority to restructure under art. 2, respectively, under art. 3, and other bodies to restructure under para. 1 may, by mutual consent, waive the requirement for the establishment of the European College in al. 1 if another group or association, including Association for the restructuring under art. 120 and 121, perform the duties and tasks referred to in paragraph 2 – 4 and fulfils the conditions and procedures referred to in this article and in article 8. 123, as in this case, under the European Association of restructuring within the meaning of this law shall be deemed that other group or association. In this case, is required and the consent of the other members of the group or association.

Exchange of information


Art. 123. (1) subject to the requirements of art. 116 the Commission, respectively, granted at the request of other authorities of restructuring and other competent bodies with all information necessary for the performance of their tasks in connection with the recovery and restructuring of institutions and entities of their groups.

(2) where the authority is the restructuring of the group level, the Commission accordingly, coordinate the exchange of information between all relevant bodies to restructure, including providing timely restructuring of other authorities all necessary information in order to facilitate the implementation of the tasks referred to in art. 120, para. 3, item 2-8.

(3) the Bulgarian National Bank, respectively, the Commission provides information, obtained from the restructuring authority of a third country, only after explicit agreement of that authority.

(4) the Bulgarian National Bank and the Commission shall exchange information with the Ministry of finance, where the information concerns a decision or issue that requires notification, approval or consent of the Department or may have consequences for the public finances.

The restructuring of the group, with the participation of the Republic of Bulgaria of subsidiary

Art. 124. (1) when an institution licensed in the Republic of Bulgaria, the Republic of Bulgaria or established company under art. 1, al. 1, item 3-5, which are subsidiaries of group, qualify for restructuring, restructuring authority under art. 2 or under art. 3 shall immediately transmit to the authority for the restructuring of the group level, the supervisor and the bodies involved in the College for the restructuring of the group, the following information:

1. the decision that the institution or company under art. 1, al. 1, item 3-5 qualify for restructuring;

2. restructuring actions or such, leading to the opening of insolvency proceedings, which the authority to restructure under art. 2, respectively, under art. 3, considered appropriate to that institution or company under art. 1, al. 1, item 3 – 5.

(2) the authority to restructure under art. 2 or under art. 3 may take action on al. 1, when:

1. the authority to restructure the group level determines after consultation with the other members of the College for the restructuring, restructuring actions or procedures are not likely to lead to the fulfilment of the conditions for the restructuring of the group in relation to a person in another Member State, or

2. within 24 hours of receipt of the notification under paragraph 1. 1 by the authority for the restructuring of the group level did not commit the discretion referred to in paragraph 1.

(3) the time limit referred to in paragraph 1. 2, item 2 may be extended with the consent of the authority to restructure under art. 2 or under art. 3.

(4) When the conditions are not met under para. 2, at the proposal of the authority for the restructuring of the group level is accepted scheme for the restructuring of the group in the form of a joint decision of the authority, the authority to restructure under art. 2 or under art. 3 restructuring and to subsidiaries included in the scheme.

(5) the authority to restructure under art. 2 or under art. 3 may request the assistance of the EBA to achieve the joint decision referred to in paragraph 1. (4) in accordance with art. 31 (c) of Regulation (EC) no 1093/2010.

(6) where the authority to restructure under art. 2, respectively, under art. 3, does not agree with the proposed restructuring of the group level scheme for the restructuring of the group, as well as when there is intent to depart from it or believes that in the interest of financial stability should take in relation to an institution or society of art. 1, al. 1, item 3 – 5 solo action or restructuring procedures other than proposed in the scheme, he shall set out in detail the reasons for disagreement or the diversion of scheme to the authority for the restructuring of the group level and other bodies covered by the restructuring scheme, and inform them of the actions or measures it will take. Upon exposure to the grounds for their opposition to the restructuring authority under art. 2, respectively, under art. 3, take into account the potential impact on financial stability in the Member States, as well as the potential consequences of individual actions or measures in other parts of the group.

(7) the joint decision referred to in paragraph 1. 4, as well as the decision under paragraph 1. 6 restructuring authority under art. 2 or under art. 3 is final.

The restructuring of a subsidiary outside of the Republic of Bulgaria, when BNB, respectively, the Commission's authority to restructure the group level

Art. 125. (1) after receiving the notification from the authority of a Member State for restructuring, a subsidiary of the group, for which the BANK, respectively, the Commission's authority to restructure the group level, fulfils the conditions for restructuring and after consultation with the other members of the College for the restructuring, BNB, respectively, the Commission assessed the likely impact that proposed by the authority in respect of the subsidiary actions for restructuring and other measures could have on the Group and on the faces of the group in the Republic of Bulgaria and other Member States, and whether the restructuring or other measures is likely to lead to the fulfilment of the conditions for restructuring aid in respect of the person of the group in the Republic of Bulgaria or other EU Member State.

(2) where, after consultation with the other members of the College to restructure the authority to restructure the group level in the Al. 1 considers that the actions of the restructuring or other measures, for which it has received a notification under paragraph 1. 1, are likely to lead to the fulfilment of the conditions for restructuring aid in respect of the person of the group in the Republic of Bulgaria or Member State concerned no later than 24 hours after receipt of the notification under paragraph 1. 1 it offers a scheme for the restructuring of the Group and shall submit it to the College for the restructuring.

(3) the time limit referred to in paragraph 1. 2 may be extended with the consent of the authority for the restructuring of the other Member State under paragraph 1. 1.

(4) the scheme for the restructuring of the group under para. 2:

1. complies with and follows the restructuring plan, unless the relevant authority for the restructuring of the group level and other authorities consider that the restructuring objectives of restructuring will be achieved more effectively through actions which are not provided for in the plan;

2. determine the restructuring to be undertaken by the Bulgarian National Bank, respectively by the Commission and other bodies with regard to the restructuring of the parent from the European Union and of the entities of the group in order to achieve the objectives of the restructuring under art. 50 and to comply with the principles of art. 53;

3. describe how the coordination of restructuring activities under item 2;

4. contain a financing plan that conforms to the plan for the restructuring of the group, sharing principles of liability set out in art. 17, al. 6, so 6 and para. 7, and for the joint use of resources under art. 143.

(5) the scheme for the restructuring of the group under para. 2 shall be adopted in the form of a joint decision of the authority for the restructuring of the group level and in terms of restructuring the subsidiary companies involved in the scheme.

(6) the authority to restructure the group level may request the assistance of the EBA to reach a joint decision pursuant to paragraph. 5 in accordance with art. 31 (c) of Regulation (EC) no 1093/2010.

(7) where one or more authorities for restructuring have expressed disagreement or have intentions to implement a restructuring scheme under para. 2, BNB, respectively, the Commission and other bodies for the prestrukturirane can reach a joint decision on restructuring scheme under para. 5.

(8) Joint decisions on al. 5 and 7 are final.

The restructuring of the group, when BNB, respectively, the Commission's authority to restructure the group level

Art. 126. (1) where the Commission, respectively, is authority for the restructuring of the group level and determines that the parent of the European Union fulfils the conditions for restructuring aid, it shall communicate the information referred to in art. 124, para. 1 the members of the College for the restructuring of the group.

(2) Actions under art. 124, para. 1, item 2 may include the application of the scheme for the restructuring of the group, prepared in accordance with art. 125, para. 4 If there is one of the following circumstances:

1. actions at the level of the parent undertaking, communicated in accordance with art. 124, para. 1, item 2, is likely to lead to the fulfilment of the conditions for restructuring aid in respect of the person of the group in another Member State;

2. actions applicable only at the level of the parent undertaking are not sufficient to resolve the problem situation or are not likely to lead to optimal results;

3. one or more subsidiaries eligible for restructuring aid in accordance with the findings of the authorities for the restructuring of these subsidiaries, or

4. restructuring actions or procedures at group level will be of benefit to the subsidiaries, making the appropriate application of the scheme for the restructuring of the group.

(3) where the authority to restructure the group level action on al. 1 does not include a scheme for the restructuring of the group, it shall take its decision, after consulting with the members of the College for the restructuring.

(4) the decision referred to in paragraph 1. 3 take into account:

1. the restructuring plan unless the authority to restructure the group level and other authorities consider that the restructuring objectives of restructuring will be achieved more effectively through actions which are not provided for in the plan;

2. the financial stability of the Member States concerned.

(5) where the proposed action on al. 1 include a scheme for the restructuring of the group, this scheme is in the form of a joint decision of the authority for the restructuring of the group level and in terms of restructuring the subsidiary undertakings included in the scheme.


(6) the authority to restructure the group level may request the assistance of the EBA to reach a joint decision pursuant to paragraph. (3) in accordance with art. 31 (c) of Regulation (EC) no 1093/2010.

(7) where one or more authorities for restructuring have expressed disagreement or have intentions to deviate from the restructuring scheme under para. 3, the authority for the restructuring of the group level and other bodies to restructure can reach a joint decision on the restructuring scheme.

(8) Joint decisions on al. 5 and 7 are final.

The restructuring of the group, when BNB, respectively, the Commission is the authority for the restructuring of a subsidiary

Art. 127. (1) where the authority to restructure the group level proposed the adoption of a scheme for the restructuring of the Group and the scheme involves action in respect of a subsidiary institution, licensed in the Republic of Bulgaria, or the society of art. 1, al. 1 3-5 of the group, this scheme shall be adopted by joint decision of the authority, the authority to restructure under art. 2 or under art. 3 and other authorities for the restructuring in respect of subsidiaries included in the scheme.

(2) the authority to restructure under art. 2 or under art. 3 may request the assistance of the EBA to reach a joint decision pursuant to paragraph. 1 in accordance with art. 31 (c) of Regulation (EC) no 1093/2010.

(3) the authority to restructure under art. 2 or under art. 3 participate in the consultation on the initiative of the authority for the restructuring of the group level, which includes an affiliate institution, licensed in the Republic of Bulgaria, or the society of art. 1, al. 1 3-5 of the group, when that authority determines that the parent of the group by the European Union eligible for restructuring, but did not propose a scheme for the restructuring of the group in accordance with para. 1.

(4) where the authority to restructure under art. 2 or under art. 3 does not agree with the proposed restructuring of the group level scheme for the restructuring of the group, as well as when there is intent to depart from it or believes that in the interest of financial stability must take in terms of institution or company under art. 1, al. 1, item 3 – 5 solo actions or procedures other than proposed in the scheme, he shall set out in detail the reasons for disagreement or the diversion of scheme to the authority for the restructuring of the group level and other bodies covered by the restructuring scheme, and inform them of the actions or measures it will take. Upon exposure to the grounds for their opposition to the appropriate authority restructuring under art. 2 or under art. 3 take into account the potential impact on financial stability in the Member States, as well as the potential consequences of actions or measures in other parts of the group.

(5) the joint decision referred to in paragraph 1. 1, and the decision of the appropriate authority restructuring under art. 2 or under art. 3 and para. 4 is final.

Cooperation in restructuring of the entities of the Group

Art. 128. (1) where not applicable scheme for the restructuring of the Group and the authority to restructure under art. 2 or under art. 3 take action in respect of restructuring entity of the group, he cooperates closely with other bodies to restructure within the College of restructuring with a view to achieving a coordinated strategy for the restructuring of all entities of the group who are troubled or likely to become dysfunctional.

(2) when taking action in respect of restructuring entity of a group restructuring authority under art. 2, respectively, under art. 3, regularly and thoroughly informed about it and on the progress made, the members of the College for restructuring.

(3) the authority to restructure under art. 2, respectively, under art. 3, be made immediately applicable actions under art. 124-127 and in this article, taking into account the urgency of the situation.

Chapter twenty one

RELATIONS WITH THIRD COUNTRIES

Recognition and enforcement procedures for the restructuring of third country

Art. 129. (1) the Procedures for the restructuring of third countries shall be recognised and enforced in accordance with the interstate agreements. Where there are no such agreements, have not entered into force or which do not contain provisions concerning recognition and enforcement procedures for restructuring, apply the provisions of this article.

(2) where there is a European Association to restructure the authority to restructure under art. 2, respectively, under art. 3, participate as a member in making a joint decision on the recognition of the procedure for the restructuring of a third State in respect of an institution or a parent from that third country, when there is not concluded and entered into force agreement, which governs the recognition and enforcement procedures for the restructuring of the third country and within the limits of art. 130.

(3) the joint decision on the recognition of the procedure for the restructuring of a third State under paragraph 1. 2 shall apply to the extent not contrary to the Bulgarian legislation.

(4) if it is not established European Association for restructuring or joint decision is not reached by the authorities involved in restructuring the European Association for the restructuring, restructuring authority under art. 2, respectively, under art. 3, take a decision independently within the limits of art. 130 on the recognition and implementation of the procedure for the restructuring of the third country concerned in respect of the institution or the parent undertaking of that State, taking into account the interests of the Republic of Bulgaria and the other Member States in which the institution operates, or the parent, including the potential impact of the recognition and the implementation of procedures for the restructuring of the third State on the other parts of the Group and financial stability in these Member States.

(5) in the decision to implement the restructuring procedure of third country authority to restructure under art. 2, respectively, under art. 3 shall have the right to use the powers in restructuring provided for in this Act.

(6) where appropriate, the protection of the public interest RATES, respectively, the Commission may take action in respect of restructuring a parent undertaking which is a body of restructuring, when in the opinion of the competent authority of the third country institution of that State shall be eligible for restructuring aid in accordance with national legislation. When taking action on the restructuring applies to art. 100.

(7) the recognition and the implementation of procedures for the restructuring of a third country shall not apply in the case of insolvency proceedings under the law of Bank bankruptcy or under part IV of the commercial code.

Right to refuse recognition or execution of the procedures for the restructuring of third country

Art. 130. the authority to restructure under art. 2, respectively, under art. 3, may refuse to recognise or execute the procedure for the restructuring of a third country, and in the European Association for restructuring – in consultation with other bodies to restructure if it considers that:

1. the procedure for the restructuring of the third State would have adverse consequences for financial stability in the Republic of Bulgaria or in another Member State;

2. the necessary restructuring action independently pursuant to art. 131 as regards the branch in the Republic of Bulgaria, in order to achieve the objectives of restructuring;

3. the recognition or execution of the procedure for the restructuring of the third State would lead to unequal treatment of creditors, including depositors, who are located in or on which payment shall be due in the Republic of Bulgaria or other EU Member State creditors, including depositors, by the third State with similar rights;

4. recognition or execution of the procedure for the restructuring of the third State would have a significant fiscal consequences for the Republic of Bulgaria, or

5. the consequences of recognition or enforcement would be contrary to the Bulgarian legislation.

The restructuring of the branch of the institution from a third country

Art. 131. (1) where the procedure does not apply to the restructuring of a third State in respect of a branch of an institution, licensed to carry on business in the Republic of Bulgaria, or the authority to restructure under art. 2, respectively, under art. 3, has refused recognition of the procedure on the grounds of art. 130, he applied his powers to restructure under this law. When taking action on the restructuring applies to art. 100.

(2) the authority to restructure under art. 2 or under art. 3 may exercise powers under para. 1, when it considers that the Act of restructuring is in the public interest and if at least one of the following conditions:

1. the branch in the Republic of Bulgaria no longer meets or is likely to meet the conditions for the issuing of a licence by an institution with its head office in a third country to carry out banking activities, according to the activity as an investment firm through a branch, and the conditions for carrying out the activity, and that there is no possibility, within a reasonable time, action in the private sector , supervisory actions or action of the authority of the third country concerned to ensure compliance with the requirements or to prevent the institution unable to perform his duties;

2. subject to the discretion of the authority for the restructuring under art. 2, respectively, under art. 3 the institution of the third State cannot or does not wish, or are likely to pay their obligations to the creditors of the Republic of Bulgaria or other EU Member State, or the liabilities incurred by or posted in the balance sheet of the branch or administered by him, and within a reasonable time is not initiated or will be initiated for the restructuring of the institution of insolvency proceedings or in accordance with the legislation of the third country;


3. the competent authority of the third country has begun a restructuring procedure in respect of the institution by the third country or has notified the authority to restructure under art. 2, respectively, under art. 3, of its intention to initiate such a procedure.

(3) when the taking of appropriate authority restructuring under art. 2, al. 1 or under art. 3, al. 1 self restructuring action in respect of a branch in the Republic of Bulgaria shall take into account the objectives of the restructuring, subject to:

1. the principles laid down in art. 53;

2. the applicable requirements related to the use of the instruments of restructuring.

Cooperation with the authorities of the third country

Art. 132. (1) when there is concluded by the EBA framework agreements for cooperation with the relevant authorities of a third State, the Bulgarian National Bank and the Commission may also conclude with them non-binding cooperation agreements, where appropriate, in accordance with the framework agreements.

(2) non-binding cooperation agreements under paragraph 1. 1 may govern the following questions:

1. the exchange of information necessary for the preparation and maintenance of the restructuring plans;

2. the consultations and cooperation in developing restructuring plans, including the principles for the exercise of implementing powers conferred pursuant to art. 129 and 131 and similar powers under the legislation of the third country concerned;

3. the exchange of information necessary for the application of the tools for restructuring and for the exercise of implementing powers conferred to the restructuring and similar powers under the legislation of the third country concerned;

4. early warning of the parties to the agreement or consultation with them before taking significant action under this law or the law of the third country concerned, when it affects the institution or group to which the agreement relates;

5. coordination of public relations in joint actions under the restructuring;

6. the procedures and arrangements for the exchange of information and cooperation in accordance with paragraphs 1-5, including, where appropriate, through the establishment and operation of crisis management groups.

(3) the Bulgarian National Bank and the Commission shall communicate to the EBA for each cooperation agreement concluded in accordance with para. 1.

Exchange of confidential information

Art. 133. (1) the Bulgarian National Bank, the Commission and the Ministry of finance provide information that represents professional secrecy referred to in art. 116, to the relevant authorities for the restructuring, the competent authorities and the competent ministries from third countries if:

1. these bodies have obligations to maintain the confidentiality of information equivalent to the requirements of art. 116 and complying with the law of the European Union and the Republic of Bulgaria for the protection of personal data;

2. the information is necessary for the relevant authorities of third countries only for the performance of their assigned functions under national legislation for the restructuring, which are comparable to the tasks entrusted to them under this Act.

(2) Information originating from another Member State, which represents professional secrecy may be made available to the relevant authorities of third countries only with the consent of the authorities of the Member State and for the purpose for which consent was given.

(3) in another Member State providing the information, which is covered by professional secrecy, the Commission and the Ministry of finance may indicate that the information may be disclosed only after the explicit consent of the Bulgarian National Bank, respectively, the Commission or the Department of finance, and to identify the purposes for which give consent.

Chapter twenty-two

MECHANISMS FOR FINANCING THE RESTRUCTURING

Fund for the restructuring of banks

Art. 134. (1) a Fund for the restructuring of the banks (PBF) for the purpose of funding the implementation of the tools and powers to restructure under this Act in respect of the banks.

(2) the Fund for the restructuring of the banks is governed by the Governing Council of the FGVB. The costs associated with the management of this Fund, are part of the overall administrative costs of the FGVB and shall be financed in accordance with the procedure laid down in the law on deposit insurance in banks line.

(3) the Management Board of FGVB defines the units in the structure of FGVB, which assist him in the exercise of his functions, the management and use of the PBF. In the performance of its functions under Chapter Eleven and chapter twelve of the Management Board shall be assisted by the FGVB unit which is separate and apart from the structural units involved with the tasks on deposit in the banks.

(4) the Management Board shall draw up the FGVB separate financial statements of the PBF.

(5) the Bulgarian National Bank as the restructuring authority under art. 2 decide on the use of funds from the PBF and instructs the Board of FGVB the implementation of this decision.

(6) the decision referred to in paragraph 1. 5 may be taken only in accordance with the objectives of the restructuring under art. 50 and principles of art. 53.

Fund for the restructuring of the iinvesticionni firms

Art. 135. (1) a Fund for restructuring of investment firms for the purpose of funding the implementation of restructuring tools under this Act in respect of investment firms under art. 1, al. 1, item 2.

(2) the Fund for the restructuring of investment firms shall be governed by the Governing Council of the FKI. The costs associated with the management of this Fund, are part of the overall administrative costs of the FKI and shall be financed in accordance with the procedure laid down in the law on public offering of securities order.

(3) the Management Board of FKI shall draw up separate financial statement of FPIP.

(4) the Commission in its capacity as the authority to restructure under art. 3 decide on the use of funds from FPIP and instructs the Board of FKI implementation of this decision.

(5) the decision referred to in paragraph 1. 4 may be taken only in accordance with the objectives of the restructuring under art. 50 and principles of art. 53.

Management of the funds for restructuring

Art. 136. (1) the Management Board of FGVB, according to the FKI, decide to:

1. collection of banks, investment firms, respectively, in annual instalments in accordance with art. 139;

2. collection of banks, investment firms, respectively, of the extraordinary contributions according to art. 140, when the contributions referred to in paragraph 1 are insufficient, and

3. conclusion of contracts to borrow funds and other forms of support and provision of loans under the conditions and by the procedure of art. 141 and 142;

4. the investment of the funds of the PBF, FPIP, respectively;

5. appointment of the registered auditor to perform an independent financial audit of the annual financial statement of the PBF, FPIP, respectively;

6. execution of assigned by this law, including obligations under Chapter Eleven and chapter twelve;

7. adoption of the annual financial statement of the PBF, FPIP, respectively, and its publication by 31 March.

(2) the funds of the PBF, FPIP, respectively, are invested in compliance with the principles of security, liquidity and diversification.

(3) the means of, respectively, the PBF FPIP, may invest in financial instruments, as follows:

1. deposits in BGN and EUR or other financial instruments offered by the Bulgarian National Bank;

2. deposits in euro for foreign banks, which have one of the three top credit ratings from two credit rating agencies;

3. debt instruments in euro, without embedded options issued by foreign States, foreign banks, international financial institutions, international financial organizations, foreign agencies or other foreign companies which instruments or issuers have one of the three top credit ratings from two credit rating agencies.

(4) the Fund for the restructuring of the banks have the right, FPIP, respectively:

1. to carry out repo transactions (transactions repurchase) in euros with foreign banks, foreign financial institutions or international financial organizations, which have one of the three top credit ratings from two credit rating agencies;

2. to provide the loan against the equivalent collateral debt instruments held by them under paragraph 1. 3, item 3 of the foreign banks, foreign financial institutions or international financial organizations, which have one of the three top credit ratings from two credit rating agencies.

(5) subject to the requirements of this law and the law on the National Bank means the PBF FPIP, respectively, may be awarded for management of the BNB for remuneration.

(6) the rules and restrictions on the investment of the funds of the PBF, FPIP, respectively, as well as amendments thereto shall be adopted by the Management Board of FGVB, according to the FKI.

Use of the funds for restructuring

Art. 137. (1) the authority to restructure under art. 2, respectively, under art. 3, shall take a decision on the use of funds from the PBF, FPIP respectively, to the extent necessary to ensure the effective implementation of the instruments for the restructuring. With these funds may finance one or more of the following:

1. ensuring assets or obligations or lending institution in restructuring mode, its subsidiaries, the bridge Bank, Mostow of an investment firm or asset management company;

2. the purchase of the assets of the institution in restructuring mode;

3. the acquisition of common shares issued by the Bank bridge, Mostow's investment firm, a financial holding company or by the bridge company for asset management;

4. payment of benefits to shareholders, associates or creditors pursuant to art. 102;

5. contributions to the institution in restructuring mode, when you apply the tool to share losses, and the authority to restructure under art. 2, respectively, under art. 3, has decided to exclude certain creditors from the scope of the sharing of losses in accordance with art. 67;


6. lending to other funding mechanisms on a voluntary basis.

(2) when applying the instrument of sale of business operations under para. 1 may be taken in respect of the buyer.

(3) funds from the PBF, respectively from FPIP, may not be used to directly take on the losses of an institution or society of art. 1, al. 1, item 3 – 5, nor for the recapitalisation of the institution or company. When the use of funds under para. 1 leads to a partial transfer of losses of an institution or society of art. 1, al. 1, item 3 – 5 to PBF, according to FPIP, apply the requirements of art. 67.

Target level and sources of fundraising

Art. 138. (1) the target level of funds collected in the PBF is two per cent of the amount of guaranteed deposits in banks licensed in the Republic of Bulgaria.

(2) target level of FPIP is one percent of the amount of the cash compensation of clients of investment firms and branches of third countries, licensed in the Republic of Bulgaria.

(3) sources of raising funds in PBF FPIP, respectively, in are:

1. annual and extraordinary contributions from banks, investment firms, respectively;

2. income from investment of the money raised in the PBF FPIP, respectively, in money;

3. received by PBF from FPIP, amounts of recovery of funds used for the purpose of restructuring in accordance with the procedures referred to in the application of relevant tools for restructuring, as well as the related income and compensation;

4. other sources.

(4) the Bulgarian National Bank is the custodian of the funds of the PBF and FPIP.

Annual contributions

Art. 139. (1) the authority to restructure under art. 2, respectively, under art. 3, to 31 March of the current year shall determine the total amount of annual contributions for the year in question, taking into account the stage of the economic cycle and the corresponding effect on the financial situation of banks, investment firms, respectively. The restructuring under art. 2, respectively, under art. 3, shall inform the Management Board of FGVB, according to the FKI, to the total amount of the annual contributions to the PBF, respectively in the period, FPIP sentence first.

(2) before 1 may of the current year, the authority to restructure under art. 2, respectively, under art. 3, determine the individual annual instalments to banks, according to investment firms licensed in the Republic of Bulgaria, as well as to branches of third countries within the limits of the amount referred to in paragraph 1. 1 and shall submit to the Management Board of FGVB, according to the FKI, the information specified for individual contributions within the same period.

(3) the authority to restructure under art. 2, respectively, under art. 3, notify any Bank, respectively, an investment firm, licensed in the Republic of Bulgaria, and a branch of the Bank, according to an investment firm of a third country on the size of individual annual installment of PBF, respectively, within the term under FPIP al. 2.

(4) an institution licensed in the Republic of Bulgaria, or a branch of a third country shall submit to the PBF, respectively, in the individual designated FPIP annual contribution within 30 days from the date of the notification under paragraph 1. 3.

(5) the contribution referred to in paragraph 1. 2 in the PBF is proportional to the relative size of the sum of the obligations of the Bank or branch of a third country (with the exception of equity), reduced by the amount of guaranteed deposits in this bank or branch, in relation to the General obligations of all banks and branches of third countries (with the exception of equity), reduced by the total amount of guaranteed deposits. The amount of the contribution into account and risk profile of the Bank or branch and shall be calculated in accordance with the rules laid down by the Delegated Regulation (EC) No 2015/63 of the Commission of 21 October 2014, supplementing Directive 14/59/EC of the European Parliament and of the Council as regards the preliminary contributions to funding mechanisms of restructuring (OJ, L 11/28 from 17 January 2014) , hereinafter referred to as the Delegated Regulation (EC) No 2015/63.

(6) the contribution referred to in paragraph 1. 2 in FPIP is proportional to the relative size of the sum of the obligations of the investment firm or branch of a third country (with the exception of equity) to the General obligations of all investment firms and branches of third countries (with the exception of equity). The amount of the contribution into account and risk profile of the investment firm or of the branch and shall be calculated in accordance with the rules laid down by the Delegated Regulation (EC) No 2015/63.

(7) when it is reached the target level of resources under art. 138, para. 1, respectively, under art. 138, para. 2, restructuring the authority under art. 2, respectively, under art. 3, shall take a decision to suspend the collection of annual installments. In the subsequent use of the PBF, FPIP, respectively, with the result that the collected funds fall below the target level of art. 138, para. 1, respectively, under art. 138, para. 2 raise the annual contribution shall be resumed until the target level is reached.

(8) where the funds of the PBF, FPIP, respectively, run down to size, less than two-thirds of the target level is recovers the collection of annual contributions and they are set so that the target level to be reached within a period of six years.

(9) the authority to restructure under art. 2, respectively, under art. 3, exercise control on the implementation of the obligations of the institutions and branches referred to in this article. The Management Board of FGVB, according to the FKI, shall inform the authority to restructure under art. 2, respectively, under art. 3, for the payment of annual contributions and assist him in the exercise of control in the first sentence.

(10) in the non-payment of the annual fee within the prescribed period, the Management Board of FGVB, according to the FKI, charge for the duration of the delay interest on the amount due at the rate of legal interest.

(11) in the event that an institution or a branch of an institution by a non-Member State does not pay the due contribution in the period, the Management Board of FGVB, according to the FKI, shall immediately inform the authority to restructure under art. 2, respectively, under art. 3.

(12) the annual contributions of the institutions are recorded as financial expenses for the current year.

Exceptional contributions

Art. 140. (1) where the amount of the funds accumulated in the PBF in FPIP, is not sufficient to cover the expenditure related to the financing of the restructuring, raise exceptional contributions from banks, investment firms, respectively, licensed in the Republic of Bulgaria, as well as branches of third countries.

(2) the authority for the restructuring under art. 2, respectively, under art. 3, determine the total amount of contributions, which is not greater than three times the size of the last annual installment.

(3) the total amount referred to in paragraph 1. 2 is allocated to individual extraordinary contributions between banks, respectively between investment firms licensed in the Republic of Bulgaria, as well as branches from third countries in accordance with the rules laid down in art. 139, para. 5, according to art. 139, para. 6.

(4) a decision under paragraph 1. 2 for the restructuring authority under art. 2, respectively, under art. (3), lays down the period within which the extraordinary contributions are paid in full.

(5) if payment of the extraordinary contributions would jeopardise the liquidity or solvency of the institution, licensed in the Republic of Bulgaria, or a branch of a third country, the authority for the restructuring under art. 2, respectively, under art. 3, may postpone for up to 6 months in whole or in part fulfilment of the obligation. The postponement may be extended for up to six months at the request of the institution or of the branch and after assessment of its acceptability.

(6) control requirements under art. 139, para. 9 apply for exceptional contributions.

(7) the rules of art. 139, para. 10 and 11 shall apply to non-payment within a period of extraordinary contribution.

Alternative means of financing

Art. 141. When the available funds collected from annual contributions and extraordinary contributions are not sufficient to cover the expenditure related to the financing of the restructuring, PBF, FPIP, respectively, can be accurately with borrowing or assisted with other forms of support from banks, financial institutions or other third parties in the event that such opportunities are immediately available on reasonable terms.

Borrowing between funding mechanisms

Art. 142. (1) the Fund for the restructuring of banks, is accordingly FPIP, may make a request to borrow funds from other funding mechanisms of restructuring in the European Union, in the event that:

1. the momentum generated by annual instalments amount is not sufficient to cover the cost of the PBF, FPIP, respectively, in connection with restructuring;

2. extraordinary contributions were not collected in due course;

3. the borrowing of funds and other forms of assistance under art. 141 are not immediately accessible on reasonable terms.

(2) the Funds of the PBF, FPIP, respectively, can be used to provide loans to other funding mechanisms of restructuring in the European Union. Decision to grant such loans shall be taken by the Governing Council of FGVB, according to the FKI, after approval from the Ministry of finance and by the restructuring under art. 2, respectively, under art. 3, and if such loans are contacted as a result of the analogous to those described in para. 1.

(3) the Ministry of finance, the authority for the restructuring under art. 2, respectively, under art. 3, and the Board of FGVB, according to the FKI, carry out their assessments and take appropriate decisions on al. 2 in accordance with the time-limits in accordance with the request of the mechanism for financing by the other Member State.

(4) the interest rate, term of payment and other terms of the loan under para. 1 or 2 shall be agreed between the Board of FKI, respectively FGVB, and controls the other participating funding mechanisms of restructuring. The agreed interest period and conditions apply to all participating in an agreement for the loan, unless the participants otherwise agree.


(5) the amounts respectively PBF FPIP, participates in the provision of loans at par. 2 shall be agreed by the Governing Board of the FGVB, according to the FKI. The agreement provides the distribution of commitments for funds among the participating funding mechanisms, in proportion to the relative size of the guaranteed deposits in the Member State concerned to the total amount of guaranteed deposits of the countries participating in the agreement, unless otherwise agreed.

(6) upon the granting of a loan under para. 2 the sum of the allocations is not reduced, taking into account the implementation of the target level of funds collected in PBF in FPIP.

Use of the funds for restructuring under the restructuring of the Group

Art. 143. (1) upon preparation of a scheme for the restructuring of the group in accordance with art. 124-127 BNB, respectively, the Commission as a body for the restructuring of the group level or authority involved in the restructuring, take a decision on the participation of the PBF, FPIP, respectively to the financing of restructuring in accordance with an agreed plan for financing the restructuring actions at the level of the group.

(2) the financing plan includes:

1. assessment under art. 55 as regards the entities in the Group;

2. the losses that will be recognized by each affected entity in the group in respect of the use of the instruments of restructuring;

3. for each affected entity in the Group – losses that will be incurred by each class of shareholders and creditors;

4. the contributions that would have been made by FGVB in accordance with art. 144 and other deposit insurance schemes;

5. the total contribution of the funding mechanisms of restructuring, including its purpose and form;

6. the basis for calculating the amounts that the PBF, FPIP, respectively, and other mechanisms for financing the restructuring of Member States, which are located in the affected entities of the group, should provide for the financing of the restructuring, in order to reach that total contribution under item 5;

7. the amounts that the PBF, FPIP respectively, and the rest of the funding mechanisms of the affected entities in the Group should provide for the financing of restructuring, and the form of such contributions;

8. the amount of funds that PBF FPIP, respectively, and other mechanisms for financing the restructuring of Member States that are affected by the Group entities may obtain a loan by institutions, financial institutions and other third parties;

9. time limits for the use of the PBF, FPIP respectively, and other mechanisms for financing the restructuring of Member States who are established in the entities of the group, which can be extended if necessary.

(3) unless otherwise agreed in the financing plan, the basis for a proportional contribution of PBF FPIP, respectively, in the Al's contribution. 2, item 5 is consistent with the principles of art. 17, al. 6, t. 6, taking into account:

1. the proportion of risk-weighted assets of the group, which is held by institutions and companies under art. 1, al. 1, item 3 – 5, established in the Republic of Bulgaria;

2. the portion of the value of the assets of the group, which is held by institutions and companies under art. 1, al. 1, item 3 – 5, established in the Republic of Bulgaria;

3. the part of the losses that led to the need for a restructuring of the group, which is due to the entities under the supervision of the NATIONAL BANK, respectively, and

4. the portion of the total contribution under para. 2, item 5, which, in accordance with the financing plan is expected to be used directly for the benefit of entities of the group, established in the Republic of Bulgaria.

(4) in making a decision under paragraph 1. 1 the authority to restructure under art. 2, respectively, under art. 3, together with the Board of FGVB, according to the FKI shall provide for the measures necessary to ensure that the opportunities for immediate payment of the instalment in the financing plan on taking action on the restructuring.

(5) for the implementation of the obligations under para. 4 the Governing Board of the FGVB, according to the FKI, may conclude pursuant to art. 141 loan agreements or other form of support, as well as provide guarantees under contracts concluded by the mechanism to finance the restructuring of group level in accordance with the agreed funding plan.

(6) income or benefits derived from the use of the mechanisms for financing the restructuring of the group level shall be allocated among the relevant funding mechanisms in accordance with their contributions under para. 2.

Use of FGVB in the process of restructuring

Art. 144. (1) where the BANK Act on restructuring, FGVB commits itself to contribute to the financing of the restructuring with a cash contribution to cover losses, provided it retains access to the depositors their savings and subject to the following restrictions:

1. when using the tool for sharing of losses – the amount of the contribution of FGVB is determined by the amount by which the guaranteed deposits would be impaired to assume the losses of the Bank in accordance with art. 73, para. 1, item 1, if the guaranteed deposits until their arrival in the scope of the instrument and were still subject to impairment as claims of a creditor with a line under art. 94, para. 1, item 4 of the banking law bankruptcy;

2. when using other tools for restructuring – the amount of the contribution of FGVB is determined by the amount of losses that the depositors, whose deposits are guaranteed, would suffer in bankruptcy proceedings as a lender with a row of claims according to art. 94, para. 1, item 4 of the law on Bank bankruptcy.

(2) the amount of the fee under paragraph 1. 1 cannot exceed the lesser of two amounts:

1. the amount of the loss that would have suffered FGVB in insolvency proceedings under the law of Bank bankruptcy;

2. the minimum amount of the available funds of FGVB under § 8 of the transitional and concluding provisions of the law on deposit insurance in banks.

(3) When the tool is used for sharing of losses, the FGVB cannot be used to recapitalise under art. 73, para. 1, item 2 of the Bank or the Bank mostovata.

(4) the determination of the amount due by the payment on FGVB al. 1 performed as part of the assessment under art. 55.

(5) where the eligible deposits at a bank in restructuring mode are transferred to another person through the sale of business or the Bridge Bank, depositors have no right of claim against FGVB for the portion of their deposits in the Bank under the restructuring, which has not been passed, if the amount of funds transferred is equal to or greater than the total amount of the security referred to in chapter three section I of the law on deposit insurance in banks.

Chapter twenty three

ADMINISTRATIVE PENAL PROVISIONS

Administrative offences and sanctions

Art. 145. (1) upon failure to comply with the requirements of art. 6, 8 or 9 for preparation, maintenance or updating of the recovery plans, with art. 14, para. 9 and 11, art. 40, para. 1 or of art. 113, para. 1 the need of:

1. a natural person — a fine of up to the equivalent of $ 5 million. Euro;

2. a legal person – the penalty at a rate of up to 10 percent of the total annual net turnover; When the entity is a subsidiary, net turnover shall be adopted in accordance with the turnover consolidated accounts of the parent undertaking by the European Union in the previous year.

(2) where the value of the realized gain or loss as a result of izbegnatata infringement under para. 1 can be determined, the person having a fine, penalty payment accordingly, up to twice the performance, respectively izbegnatata loss.

(3) where the natural person referred to in paragraph 1. 1, item 1 is a member of the governing body or of the senior management personnel of the Bank, according to the investment firm or company as per art. 1, al. 1, item 3-5, or another individual who is responsible, with the punishment under para. 1, item 1 or under para. 2 may be imposed and temporary ban for taking up positions in banks, investment firms or companies under art. 1, al. 1, item 3 – 5.

(4) except in the cases referred to in paragraph 1. 1-3, in the performance or completion of admission offence under this Act or the regulations for its implementation, if the Act constitutes a crime, it is necessary to:

1. a natural person — a fine of 1000 to 4000 BGN, and for repeat offenders, from 3000 to 12 000 BGN.;

2. institution, a financial institution or a parent – a penalty payment in the amount of 50 000 to 200 000 BGN, and for repeated infringement – from 200 000 to 500 000 BGN.;

3. legal person other than the institution, a financial institution or a parent – a penalty payment in the amount of 5000 to 20 000 BGN, and for repeated infringement – 20 000 to 50 000.

Establishment of offences and the imposition of penalties

Art. 146. (1) the acts establishing the offences under art. 145 shall be drawn up by the authorised by the Manager of the Bulgarian National Bank faces when the infringement was committed by entities referred to in art. 1, al. 1, which are under the supervision of the NATIONAL BANK, members of the administrative authorities or their senior management staff, or individuals who are accountable for these entities.

(2) in the cases referred to in para. 1 penal provisions shall be issued by the Governor of the Bulgarian National Bank or by persons authorized by him for the subjects of art. 1, al. 1, which are under the supervision of the NATIONAL BANK, their governing bodies or members of senior management staff, or individuals who are accountable for these violations.

(3) the acts establishing the offences under art. 145 shall be drawn up by the President of the Commission empowered by the parties when the infringement was committed by entities under art. 1, al. 1, which are under the supervision of the Commission, their governing bodies or members of senior management staff, or individuals believed to be responsible for these entities.


(4) in the cases referred to in para. 3 penal provisions shall be issued by the President of the Commission, or by officials authorised by him on the subjects of art. 1, al. 1, which are under the supervision of the Commission, their governing bodies or members of senior management staff, or individuals believed to be responsible for these entities.

(5) the compilation of acts, the issue, the appeal and the implementation of the penal provisions shall be carried out in accordance with the law for the administrative offences and sanctions.

Publication of information on administrative penalties imposed

Art. 147. (1) the Bulgarian National Bank, respectively the financial supervision Commission, published in its official website information for all penal provisions in force, which imposed penalties for violations of this law and its implementing acts, including infringement, the offender, the type and amount of punishment.

(2) the Bulgarian National Bank, respectively the financial supervision Commission, publish the information under para. 1 in summary form, when it considers that:

1. publication of personal information about an individual who has imposed administrative penalty is excessive;

2. publication would endanger the stability of the financial markets or pending criminal proceedings;

3. the publication would cause excessive damage to the Bank, according to the investment firm or the company under art. 1, al. 1, item 3-5, and the affected individuals.

(3) the publication referred to in paragraph 1. 1 shall be postponed for a reasonable period of time if there is a likelihood that the circumstances under para. 2 to lapse.

(4) the published information is available on the official website of the BULGARIAN NATIONAL BANK, according to the Commission, within a period of not less than 5 years.

(5) subject to the requirements of professional secrecy pursuant to art. 111 BNB, respectively, the Commission shall inform the EBA for all administrative penalties imposed, including any appeal by them and the results thereof.

ADDITIONAL PROVISIONS

§ 1. Within the meaning of this law:

1. "Shareholders" are holders of proprietary tools.

2. Senior management personnel "are individuals who exercise executive functions within the institution and in charge and report to the governing body in relation to its current management.

3. the "Depositor" is a concept within the meaning of § 1, item 6 of the supplementary provisions to the law on deposit insurance in banks.

4. the "Ic" is a contract by which an entity of the group guarantees the obligations of another entity of the group in front of a third person.

5. "Guaranteed deposits are deposits in chapter three of the law to guarantee bank deposits worth up to the specified size.

6. "group" is a parent and its subsidiaries.

7. "action on the restructuring" is the solution:

a) Bank or company under art. 1, al. 1, item 2-4 to be placed in a restructuring mode according to art. 51 or 52;

(b)) to apply the instrument for restructuring;

in) the exercise of one or more powers to restructure.

8. "Derivatives" is a concept within the meaning of article 2, item 5 of Regulation (EC) No 648/2012 to the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (OB, L 201/1 of 27 July 2012), hereinafter referred to as the Council Regulation (EC) No 648/2012.

9. ' debt instruments ' within the meaning of art. 94, para. 2, item 7 and 10 are bonds and other forms of negotiable debt instruments, which creates or acknowledges a debt instruments and giving rise to rights for the acquisition of debt instruments.

10. "subsidiary" is a concept within the meaning of article 4, paragraph 1, item 16 of Regulation (EC) no 575/2013.

11. "the creditor Concerned" is a creditor whose claim is linked to the obligation that is reduced or transformed in shares through the exercise of the power of compounding conversion or as a result of the use of the tool for sharing the losses.

12. "a significant branch is a branch, which would be set for significant within the meaning of art. 87 87 or (b) of the law on credit institutions, respectively, under art. 68 a of the law on markets in financial instruments.

13. "Extraordinary public financial support" is State aid within the meaning of article 107 (1) of the Treaty on the functioning of the European Union, the law on State aid or any other public financial support to supranational level which, if provided at the national level, would constitute State aid which is granted for preservation or restoration of viability, the liquidity or solvency of an institution or society of art. 1, al. 1, item 3-5 or of the group, of which this institution or company.

14. "the extraordinary convenience of a fixed amount" is the provision of the Central Bank of its cash or any other facility, which could lead to an increase in cash from the Central Bank, the Bank of solvent or solvent group of banks facing temporary liquidity problems, without this operation part of monetary policy.

15. "investment firm" is a concept within the meaning of article 4, paragraph 1, item 2 of Regulation (EC) no 575/2013, to which it is applied for initial capital requirement laid down in article 28, paragraph 2 of Directive 2013/36/EC of the European Parliament and of the Council of 26 June 2013 on access to the pursuit of the business of credit institutions and on the prudential supervision of credit institutions and investment firms amending Directive 2002/87/EC and repealing directives 2006/48/EC and 2006/49/EC (OJ L 176/338 of 27 June 2013).

16. "investor" is an investor within the meaning of the law on public offering of securities.

17. "institution" means a credit institution or investment firm.

18. "institution in a Member State" is a concept within the meaning of article 4, paragraph 1, item 28 of Regulation (EC) no 575/2013.

19. "the institution of the European Union" is a concept within the meaning of article 4, paragraph 1, item 29 of Regulation (EC) no 575/2013.

20. "institution in restructuring mode" is a Bank, investment firm, financial institution, financial holding company, a mixed financial holding company, a mixed-activity holding company, a financial holding company in a Member State, the parent financial holding company in the European Union, a mixed financial holding company in a Member State or a mixed financial holding company by the European Union in respect of which action is undertaken in a restructuring.

21. "the Institution of a third country" is a person whose head office is established in a third country, which would be consistent with the definition of institution or investment firm, if it was found in the European Union.

22. the "tools of the base own capital are equity instruments which fulfil the conditions laid down in article 28, paragraphs 1 to 4, article 29, paragraphs 1 to 5, or article 31 (1) of Regulation (EC) no 575/2013.

23. the "tools of the additional capital" are equity instruments that meet the conditions laid down in article 52 (1) of Regulation (EC) no 575/2013.

24. the "tools of capital from the second row are equity or subordinated loans that meet the conditions laid down in article 63 of Regulation (EC) no 575/2013.

25. the "tools of property" are shares, other tools, which give the right to property, tools, which can be converted into shares or other instruments of ownership or confer the right to acquire any such, and tools that constitute rights in shares or other instruments of ownership.

26. "capital requirements" means the requirements of articles 92 – 98 of Regulation (EC) no 575/2013.

27. "branch" is a concept within the meaning of article 4, paragraph 1, item 17 of Regulation (EC) no 575/2013.

28. "conversion factor" is the coefficient that determines the number of shares that will be converted to the obligation of a particular class in respect of an instrument in this class or a specific unit of the value of the debt-claim.

29. ' competent authority ' is a concept within the meaning of article 4, paragraph 1, point 40 of Regulation (EC) no 575/2013, including the European Central Bank in respect of the special tasks assigned to her in accordance with Regulation (EC) no 1024/13 of 15 October 2013 for the award of the European Central Bank specific tasks concerning policies relating to the prudential supervision of credit institutions (OJ , L 287/63 of 29 October 2013).

30. "competent ministries" are the ministries of finance and other ministries of the Member States, who are responsible for decisions in the economic, financial and budget at the level of the Member State in accordance with the allocation of competence.

31. "Consolidating supervisor" is a concept within the meaning of article 4, paragraph 1, item 41 of Regulation (EC) no 575/2013.

32. "credit institution" is a concept within the meaning of article 4, paragraph 1, item 1 of Regulation (EC) no 575/2013.

33. "Critical functions, services or activities are operations whose interruption could lead in the Republic of Bulgaria or in another Member State to collapse in the provision of services essential for the real economy or to disrupt financial stability due to the size, market share, internal and external interconnection, complexity or cross-border activities of the institution or group of terms in particular of substitutability of these activities , services or operations.

34. "funding mechanism at the level of the group is a mechanism or mechanisms for the funding of the Member State in which is situated the authority to restructure the group level.

35. "micro, small and medium-sized undertaking" means an undertaking whose annual turnover does not exceed the annual turnover, determined in art. 3, al. 1, item 2 of the law on small and medium-sized enterprises.


36. "measure to prevent crises: the pursuit of power for immediate removal of gaps or barriers to recoverability under art. 7, para. 7 and 8, the exercise of powers to overcome or eliminate barriers to opportunity for restructuring under art. 29, the application of a measure of early intervention under art. 44, the appointment of temporary Manager under art. 46, or the exercise of the powers of devaluation or conversion under art. 89.

37. "measure for crisis management" is the Act of restructuring or the appointment of an emergency Manager in accordance with art. 54.

38. On a consolidated basis "is a concept within the meaning of article 4, paragraph 1, item 48 of Regulation (EC) no 575/2013.

39. "Supervisory College" is a College of supervisory authorities within the meaning of art. 92 (e) or art. 92 of the law on credit institutions.

40. "Secured obligation" means an obligation in which the right of the creditor to receive payment or other form of execution is guaranteed through gravity, pledge or real collateral or other security agreement, including duties as a result of repurchase transactions, and other agreements for the transfer of collateral.

41. "Mirror transaction" is a transaction that is concluded between two subjects of the group in order to transfer all or part of the risk created by another transaction concluded between one of those entities in the Group and a third party.

42. the restructuring "is the authority designated by a Member State empowered to apply the tools for restructuring and to exercise the powers to restructure.

43. the restructuring of the group level "is the authority for the restructuring of the Member State in which it is established, the consolidating supervisor.

44. the "basic economic activities" are economic activities, and related services, which represent substantial sources of income or profit or who have other added value to an institution or group.

45. "eligible deposits are deposits within the meaning of § 1, item 5 of the additional provisions of the law on deposit insurance in banks or under similar legislation of a Member State.

46. "Appropriate authority" means the authority of a Member State who possesses the powers of devaluation or conversion of equity instruments.

47. "Covered bonds" is a concept within the meaning of art. 129 of Regulation (EC) no 575/2013.

48. "the potential for recovery is the ability of the institution to recover its financial situation after significant deterioration.

49. "the legal framework of the European Union for State aid" is the framework created by articles 107, 108 and 109 of the Treaty on the functioning of the European Union and the regulations, and other instruments, including guidelines, communications and notices drawn up or adopted in accordance with article 108, paragraph 4 or article 109 of the Treaty on the functioning of the European Union.

50. the "right of termination" has the right to terminate the contract, the right to notification of chargeability, forced early completion, set-off or netting of obligations or similar methods of modification, suspension, or termination of the contract or regulations that prevent the emergence of a contractual obligation, which in other cases would have occurred.

51. "parent undertaking" is a concept within the meaning of article 4, paragraph 1, item 15 (a) of Regulation (EC) no 575/2013.

52. "parent undertaking by the European Union" is the institution of the European Union, the parent financial holding company from the European Union or a mixed financial holding company by the European Union.

53. "parent undertaking from a third country" means a parent financial holding company or a mixed financial holding company parent, established in a third country.

54. "Restructuring" is the application of an instrument for restructuring in order to achieve one or more objectives of the restructuring.

55. The restructuring of the group is:

a) taking action on restructuring at the level of the parent undertaking or institution subject to supervision on a consolidated basis, or

(b) the application of coordination) tools for restructuring and of the exercise of powers to restructure by the BANK or any other body in relation to the restructuring of Group entities eligible for restructuring.

56. "Reasonable obligations" means obligations and equity instruments that are not included in the basic tools of its own capital, supplementary capital and capital from the second row of an institution or society of art. 1, al. 1, item 2-4 who are not excluded from the scope of the instrument for the sharing of losses pursuant to art. 66, para. 2.

57. "Transferee" is the subject, the person you devolve the tools property, debt instruments, assets, rights or obligations or any combination thereof, from the institution in restructuring mode.

58. "insolvency proceedings" be universally enforced, leading to partial or complete exemption from the assets of the debtor and the appointment of a liquidator or trustee, which applies to institutions in accordance with the applicable legislation and which is specific to these institutions or is universal for every person.

59. Procedures for the restructuring of the third-country national "means actions under the legislation of a third country for the purpose of management of non-fulfilment of obligations on the part of the institution from a third country or a third country parent undertaking, which is comparable in terms of the objectives and expected results with restructuring actions in accordance with this Act and the Directive 14/59/EC of the European Parliament and of the Council of 15 may 2014. to create a framework for reconstruction and reorganisation of credit institutions and investment firms and amending Council Directive 82/891/EEC and Directive 2001/24/EC and 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU 2012/30/EC and 13/36/EC and Council regulations (EC) no 1093/2010 and (EC) No 648/2012 to the European Parliament and of the Council (OJ L 173/190 of 12 June 2014).

60. "working day" means a day other than a Saturday, Sunday or any other day which is a public holiday in the Republic of Bulgaria.

61. "regulated market" means a regulated market within the meaning of the law on markets in financial instruments.

62. "Recapitalisation" is the restoration of the proportion of the basic own funds of the first order.

63. "governing body" is a Management Board and a supervisory board, Board of directors or other authority designated in accordance with national legislation, which has the power to define the strategy, objectives and overall direction of the institution or company under art. 1, al. 1, item 3-5 and which exercises control and supervision over decision-making at the management level and includes the persons who carry out the actual management of its activities.

64. a "systemic crisis" was a collapse in the financial system, which may have significant adverse implications for the markets and the real economy, such as systematic significance can be all kinds of financial intermediaries, markets and infrastructure.

65. "mixed financial holding company" is a concept within the meaning of article 4, paragraph 1, item 21 of Regulation (EC) no 575/2013.

66. "mixed financial holding company in a Member State" is a concept within the meaning of article 4, paragraph 1, item 32 of Regulation (EC) no 575/2013.

67. "mixed financial holding company parent of European Union" is a concept within the meaning of article 4, paragraph 1, item 33 of Regulation (EC) no 575/2013.

68. "equity" is a concept within the meaning of article 4, paragraph 1, item 118 of Regulation (EC) no 575/2013.

69. "netting agreement" means an agreement under which several claims or obligations may be converted to a netirano-making, including a close-out netting agreements under which, on the occurrence of an event requiring enforcement, the obligations of the parties become payable or are terminated early, as in both cases are converted into a single claim or netirano shall be replaced by such, including "close-out netting provisions" within the meaning of the law on payment services and payment systems and netting "within the meaning of Chapter five" (a) "of the law on payment services and payment systems.

70. "interception" is an arrangement under which two or more claims or obligations between the Bank in restructuring mode and counterparty can be intercepted.

71. "financial collateral arrangement" is an arrangement for title transfer financial collateral arrangement within the meaning of the law on payment services and payment systems.

72. "from the group" is the legal entity which is part of the group.

73. A deposit-guarantee scheme "is a deposit-guarantee scheme, introduced by the law on deposit insurance in banks or similar legislation of another Member State.

74. "a corresponding authority of a third country" is an authority of a third country, responsible for implementation of features comparable to those of the authorities for the restructuring or of the competent authorities in accordance with this law.

75. "Relevant institution" is an institution in a Member State, the institution of the European Union, a financial holding company, a mixed financial holding company, a mixed-activity holding company, a financial holding company in a Member State, the parent financial holding company in the European Union, a mixed financial holding company in a Member State or a mixed financial holding company by the European Union, in relation to which the tool is applied to share losses.

76. "relevant equities" are tools of the additional capital and the capital of the second row.

77. "Cross group" is a group in which there are entities of the group, established in more than one Member State.

78. "conditions for restructuring" are the conditions referred to in art. 51 and 52.

79. "financial holding company" is a concept within the meaning of article 4, paragraph 1, item 20 of Regulation (EC) no 575/2013.

80. "parent financial holding company in a Member State" is a concept within the meaning of article 4, paragraph 1, item 30 of Regulation (EC) no 575/2013.


81. "parent financial holding company in the European Union" is a concept within the meaning of article 4, paragraph 1, item 31 of Regulation (EC) no 575/2013.

82. "financial institution" is a concept within the meaning of article 4, paragraph 1, item 26 of Regulation (EC) no 575/2013.

83. "financial contracts" are following: treaties and agreements

a) securities contracts, including:

AA) contracts for buying, selling, or lending of a security group or index of securities;

BB) options on a security group or index of securities;

BB) repo or reverse repo transaction in relation to any such security group or index;

(b) contracts for goods), including:

AA) contracts for buying, selling, or lending of a product group or index of goods provided for future delivery;

BB) options on commodity or group of commodities index;

BB) repo or reverse repo transaction in relation to any such product, group or index;

c) futures and forward contracts, including contracts (other than commodity contracts) for the purchase, sale or transfer of the goods or property of another character, service, law or part of a particular price on a future date;

d) swaps agreements, including:

AA) interest rate swaps and options; spot or another kind of currency swap agreements; foreign exchange swaps and options; swaps and equity options on indices or individual equity instruments; swaps and options on debt indices or individual debt instruments; swaps and options on commodity indices or individual goods; swaps and options on weather conditions, emissions or inflation;

BB) swaps for total yield or credit spreads and credit swaps;

BB) agreements or transactions, similar to an agreement under subparagraphs "AA" and "BB", subject to the subsequent trading on the markets for swaps or derivatives;

e) interbank lending agreements with a term of three months or less;

f) framework agreements for some of the contracts or agreements referred to in letters "a", "e".

84. "mixed-activity holding company" is a concept within the meaning of article 4, paragraph 1, item 22 of Regulation (EC) no 575/2013.

85. "central counterparty" is a concept within the meaning of article 2, point 1 of Regulation (EC) No 648/2012.

86. "restructuring targets" are the objectives of the restructuring referred to in art. 50, para. 2.

§ 2. (1) in applying the tools for restructuring and the exercise of powers to restructure by the BANK in respect of financial institutions and parent undertakings falling within the scope of this law, the provisions of chapter thirteen of the law on credit institutions.

(2) in applying the tools for restructuring and the exercise of powers for the restructuring of the Commission with regard to financial institutions and parent undertakings falling within the scope of this law, the provisions of chapter II, section II a of the law on markets in financial instruments.

§ 3. In applying the tools for restructuring and the exercise of powers to restructure by the BNB, respectively by the Commission with regard to financial institutions and parent undertakings falling within the scope of this Act shall not apply to art. 72, 150, 151, 152, 153, art. 192, para. 2 and 3, art. 192a, 193, 194, art. 196, para. 1, art. 197, 199, 200, 201, 202, art. 222, para. 3, art. 231, para. 3 and 4, the provisions concerning conversion pursuant to Chapter sixteen, section II and section V of the Trade Act.

§ 4. This law introduces the requirements of Directive 2014/59/EC of the European Parliament and of the Council of 15 may 2014. to create a framework for reconstruction and reorganisation of credit institutions and investment firms, and amending Council Directive 82/891/EEC and Directive 2001/24/EC and 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC , 2011/35/EU 2012/30/EC and 13/36/EC and Council regulations (EC) no 1093/2010 and (EC) No 648/2012 to the European Parliament and the Council.

TRANSITIONAL AND FINAL PROVISIONS

§ 5. The Ministry of Finance shall notify the European Commission of the EBA and the powers of the NATIONAL BANK and of the Commission for financial supervision in restructuring and determined the BNB as contact point for the purposes of cooperation and coordination with the relevant bodies in other Member States.

§ 6. (1) the target level of funds in the PBF FPIP, respectively, in art. 138, para. 1, respectively, under art. 138, para. 2, to be achieved by 31 December 2024.

(2) within the period referred to in paragraph 1. 1 the annual contributions to the PBF, FPIP, respectively in distributed evenly over time until the target level.

(3) evenly under para. 2 shall be carried out taking account of the economic cycle and the impact that the contributions may have on the financial position of the participating banks, respectively, of the participating investment firms.

(4) If, within the period referred to in paragraph 1. 1 of the PBF be used over 0.5 percent of guaranteed deposits of banks licensed in the Republic of Bulgaria, the time limit for achieving target level can be extended by decision of the BULGARIAN NATIONAL BANK no later than December 31, 2028.

§ 7. The Bulgarian National Bank sets the annual amount of the contribution referred to in art. 139, para. 1 and the individual instalments under art. 139, para. 2 for 2015 within three months of the entry into force of this law.

§ 8. The financial supervision Commission determines the annual amount of the contribution referred to in art. 139, para. 1 and the individual instalments under art. 139, para. 2 for 2017 by 31 March 2017.

§ 9. (1) with a view to ensuring the effective functioning of the financial system and the need to ensure greater transparency in the operations of the financial market in the Republic of Bulgaria and in line with the national reform programme 2020, adopted by decision No 28 of the Council of Ministers by 2015, BNB organized review of the quality of the assets of the entire banking system, including checking the quality and adequacy of the assessments of the value of assets , the accepted collateral and obezcenâvane practices and provisioning, with the participation of outside independent persons with high professional reputation. The review in the first sentence shall be made within 12 months of the entry into force of this law.

(2) the review under para. 1 shall be carried out at the corresponding to the methodology applied by the European Central Bank, in setting up the single supervisory mechanism and taking into account the need to ensure financial stability and strengthen confidence in the financial system.

(3) taking account of the results of the review referred to in paragraph 1. 1 BANK stress tests carried out on the entire banking system within the meaning of art. 80 (b) of the law on credit institutions in order to establish the ability of banks to absorb unexpected losses in emergency stress situations.

(4) on the basis of the results of the review referred to in paragraph 1. 1 and stress tests under para. 3 BNB shall take the necessary measures within the legal powers to ensure coverage by the banks of the potential capital shortfall, established as a result of the review of the quality of the assets, or due to the need for strengthening the banking system's ability to absorb unexpected losses in emergency stress situations.

(5) the costs associated with the review referred to in paragraph 1. 1 for a specific bank, at the expense of the Bank.

§ 10. (1) with a view to ensuring the effective functioning of the financial system and the need to ensure greater transparency in the operations of the local financial market and in line with the national reform programme 2020, adopted by decision No 28 of the Council of Ministers by 2015, the FSC organized a review of assets of pension funds and the balance sheets of insurance companies with participation of independent external persons and institutions with high professional reputation. The review in the first sentence shall be made within 12 months of the entry into force of this law.

(2) the review under para. 1 shall be based on a methodology developed by the financial supervision Commission in cooperation with the competent authorities of the Member States.

(3) the financial supervision Commission shall determine and disclose the persons who carry out the review under para. 1, with costs for the conduct of this review shall be borne by the pensionnoosiguritelnite companies and insurers.

§ 11. Bank Bankruptcy Act (promulgated, SG. 92 of 2002; amended 67/2003, 36/2004, no. 31 and 105 by 2005, issue 30, 34, 59 and 80 in 2006 and 53/59 of 2007, 67/2008 No. 105 from 2011, 98/by 2014. , PC. 22, 41 and 50 by 2015) make the following changes and additions:

1. In art. 9, para. 2, second sentence, the words "issued the order to the Governor" are replaced by "a decision of the Governing Board of the Central Bank.

2. In art. 11, para. 3, after the word "Quaestors" insert "or appointed by the order of art. 12, al. 1 2 temporary receivers. "

3. In art. 12, al. 1, paragraph 2, after the words "proposed by the Fund" shall be affixed to the end point, and the text is deleted.

4. In art. 13, para. 4, after the words "and to the Quaestors ' is added to the" receivers ".

5. In art. 19, para. 1, after the word "Quaestors" insert "or" receivers.

6. In art. 49:

(a)) in the Al. 1 and 2, after the word "Quaestors" insert "or" receivers;

(b)) is hereby set up al. 5:

"(5) in cases where not appointed interim receivers, the actions referred to in this article shall be carried out by liquidators after taking office."

7. In art. 50, at para. 2 and 3, after the word "Quaestors" insert "or" receivers.

8. In art. 94, para. 1:

a) in item 3 the end is added "as well as the expenses of the Central Bank, Ministry of finance, the Fund for the restructuring of banks and the restructuring fund of investment firms in connection with restructuring actions in the Recovery Act and the restructuring of credit institutions and investment firms;

(b) in item 4) after the word "subrogiral" is put a semicolon and text until the end shall be deleted;

in) a new item 4 (a):


' 4A. the claims of depositors who are natural persons or micro-, small and medium-sized enterprises, for the part that exceeds the amount of the security referred to in the law on deposit insurance in banks; "

d) creates item 4 (b):

"4B. claims of the other depositors, which is not covered by the deposit insurance system;"

(e)) the current item 4 item 4 is in.

9. In § 1 of the additional provisions:

a) a new item 6:

"6." micro, small and medium-sized undertaking "means an undertaking whose annual turnover does not exceed the annual turnover, determined in art. 3, al. 1, item 2 of the law on small and medium-sized enterprises ";

(b)) the current item 6 becomes item 7.

§ 12. Paragraph 11, point 8 shall not apply to insolvency proceedings opened before the entry into force of this law.

§ 13. The Bulgarian National Bank (official SG. 46 of 1997; amended and 49/153 of 1998 No. 20 and 54 of 1999, 109/2001, no. 45 of 2002, no. 10 and 39 since 2005, issue 37, 59 and 108 of 2006, no. 52 and 59 since 2007, issue 24 , 42 and 44 of 2009, PCs. 97 and 101 of 2010 and PC. 48 by 2015.) in art. 16 is made the following changes and additions:

1. a new item 17:

"17. adopts decisions as authority for restructuring in the cases provided for in the law for the recovery and restructuring of credit institutions and credit intermediaries;".

2. an item 18:

"18. adopts decisions under art. 20, para. 1, item 2 of the law on deposit insurance in banks that deposits at the Bank were unavailable; ".

3. Current item 17 becomes t. 19.

§ 14. In the Act on the financial supervision Commission (official SG. 8 of 2003; amend., no. 31, 67 and 112 since 2003, 85/2004, no. 39, 103 and 105 by 2005, issue 30, 56, 59 and 84 of 2006, 52/97 and 109 from the 2007 No. 67 of 2008, issue 24 and 42 by 2009. , PC. 43 and 97 from 2010, PC. 77 by 2011, issue. 21, 38, 60, 102 and 103 of the 2012 issue. 15 and 109 from 2013 and St. 34 by 2015.) make the following changes and additions:

1. In art. 1, al. 2, paragraph 1, after the words "the law on markets in financial instruments directive" a comma and add "Recovery Act and the restructuring of credit institutions and investment firms.

2. In art. 12, al. 1:

a) in paragraph 2, the words "and the law on markets in financial instruments directive" shall be replaced by ' the law on markets in financial instruments and the recovery and restructuring of credit institutions and investment firms;

(b)) a new item 9:

"9. the restructuring is a body within the meaning of the law for the recovery and restructuring of credit institutions and investment firms;"

in the past) became item 9 item 10.

3. In art. 13, para. 1:

a) in paragraph 4, after the words "the law on markets in financial instruments directive" is added "Recovery Act and the restructuring of credit institutions and investment firms;

(b)) a new item 13:

"13. exercise the powers of the authority to restructure under the recovery and restructuring of credit institutions and investment firms;".

4. In art. 15, para. 1 creating a new item 12:

"12. the exercise envisioned powers in Law for the recovery and restructuring of credit institutions and investment firms as a competent authority that are not provided in an explicit competence to the Commission;".

5. In art. 17A, al. 1 creating the second sentence: "the Member of the Commission under art. 3, item 5 shall assist the Commission in the exercise of its powers as the authority to restructure and make proposals to the Commission for decision making under the recovery and restructuring of credit institutions and investment firms. "

6. In art. 18 everywhere after the words "the law on markets in financial instruments directive" is added "Recovery Act and the restructuring of credit institutions and investment firms.

7. In art. 19, para. 2, paragraph 1, after the words "the law on markets in financial instruments directive" is added "Recovery Act and the restructuring of credit institutions and investment firms.

8. In art. 24, para. 5, paragraph 1, after the words "the law on markets in financial instruments directive" is added "Recovery Act and the restructuring of credit institutions and investment firms.

9. in art. 27, al. 1:

a) in paragraph 1, after the words "the law on markets in financial instruments directive" is added "Recovery Act and the restructuring of credit institutions and investment firms;

b) 11 is created:

11. review and assessment of the recovery plan for the Recovery Act and the restructuring of credit institutions and investment firms. "

§ 15. In the law on financial collateral agreements (official SG. 68 of 2006; amend., issue 24 of 2009, issue 101 of 2010/2011 77 and 70 and 109 from 2013) in art. 16 is made the following changes and additions:

1. The current text becomes paragraph 1.

2. a para. 2:

"(2) the provisions of art. 8, 10 and 11 shall not apply in respect of the restrictions on the performance of contracts for financial security, restrictions on the operation of the contract security financial collateral, netting clause or for offsetting, applicable by virtue of the fifteenth and sixteenth chapters of the Recovery Act and the restructuring of credit institutions and investment firms, or restrictions applicable under the relevant legislation of the Member State of the European Union whose purpose is to facilitate the restructuring of the person under art. 3, al. 1, item 6 and 15, which is the subject of protection at least equivalent to the protection under Chapter Seventeen of the recovery and restructuring of credit institutions and investment firms. "

§ 16. In the public offering of securities (official SG. 114 since 1999; amend., SG. 63 and 92 of 2000, issue 28, 61, 93 and 101 in 2002, no. 8, 31, 67 and 71 in 2003, 37/2004, no. 19, 31, 39, 103 and 105 by 2005, issue 30, 33, 34, 59 , 63, 80, 84, 86 and 105, 2006, issue. 25, 52, 53 and 109 from 2007, PCs. 67 and 69 by 2008, PCs. 23, 24, 42 and 93 from 2009, PCs. 43 and 101 of 2010, PC. 57 and 77 from 2011, issue. 21, 94 and 103 by 2012 PCs. 109 by 2013 and St. 34 by 2015.) make the following changes and additions:

1. an art. 120 (b):

"Art. 120 (b). (1) the provisions of art. 115-116 and art. 117 shall not apply in cases where restructuring measures or exercise powers and mechanisms under the law for the recovery and restructuring of credit institutions and investment firms.

(2) in the case of capital increases of public company required to avoid the occurrence of conditions for restructuring under the recovery and restructuring of credit institutions and investment firms, the call for the convening of a general meeting may be declared and published in shorter than the period provided for in art. 115, para. 4 time limit, but no less than 10 calendar days, if the General Assembly decided to convene by a two-thirds majority of the capital or amend the provisions of the Statute concerning the convening of the general meeting and provided that the measures are implemented under art. 44 and 46 of the Act on restoration and restructuring of credit institutions and investment firms. "

2. In art. 148 (h):

and the current text) became al. 1;

(b)) is hereby set up al. 2:

"(2) the obligation to register the tender offer does not arise in implementing the restructuring measures or the exercise of powers and the use of mechanisms under the law for the recovery and restructuring of credit institutions and investment firms."

§ 17. In the law on markets in financial instruments (promulgated, SG. 52 of 2007; amend., SG. 109 (2007), no. 69 since 2008, issue 24, 93 and 95 of 2009, 43/2010/2011 77, no. 21, 38 and 103 from 2012, issue 70 and 109 in 2013, no. 22 and 53 by 2014 and PCs. 14 and 34 by 2015) the following amendments and supplements shall be made :

1. In art. 20:

(a)) in the Al. 2. t 6 is created:

"6. If the remedial measures undertaken under art. 23 and remained without result. ";

(b)) is hereby set up al. 8:

(8) an extract from the decision of the Commission on the withdrawal of the authorisation of an investment firm referred to in art. 8, al. 1 and 2 shall be published in the official journal of the European Union, as well as in two national dailies of each Member State in which the investment firm has a branch. An extract from the decision provided to the Bulgarian language ".

2. In art. 21 establishes al. 7:

"(7) an Winding under para. 1 the investment firm under art. 23 (a) shall not preclude the taking of remedial measures or the opening of winding-up proceedings.

3. In chapter II section Iia is created with art. 23A-23 at:

Section IIa

Remedial measures and suspension procedures

Art. 23. (1) the Remedial measures are measures which are intended to preserve or restore the financial situation of an investment firm referred to in art. 8, al. 1 and 2 and which might affect the existing rights of third parties, including measures related to the possibility of a suspension of payments, suspension of enforcement activities or reduction of claims. These measures include the implementation of the instruments for adjustment and restructuring exercise of powers under the law for the recovery and restructuring of credit institutions and investment firms or the respectively applicable law of another Member State.

(2) the measures referred to in paragraph 1. 1 are those applied by the Commission, respectively, by the Deputy Chairman and the competent authorities of another Member State measures in their capacity as supervisors and authorities for the restructuring.

(3) in the event that applies to art. 115 of the law on reconstruction and reorganisation of credit institutions and investment firms, the provisions of art. 23 (b), para. 3 do not apply.

(4) the provisions of this section shall apply to the entities referred to in art. 1, al. 1, item 3-7 of the law on reconstruction and restructuring of credit institutions and investment firms.


Art. 23B. (1) the Commission, Vice-President, respectively, are the competent authorities in the application of remedies in relation to an investment firm referred to in art. 23 (a), including in relation to its branches in other Member States.

(2) the conditions and procedure for the application of such measures and their legal consequences are governed by Bulgarian law, unless otherwise provided.

(3) When remedial measures applied in relation to an investment firm referred to in art. 23 (a), which has branches in other Member States, the Commission shall inform immediately prior to the implementation of the measures competent authorities of those Member States of its decision, and where this is not possible – at the same time as their application. In the notification the Commission shall indicate the consequences of the application of the measure.

(4) the acts of the Commission, Vice-President, respectively, for the application of the reorganisation measures shall be published on the Commission's website and in two central daily newspaper in the Republic of Bulgaria within two working days from the date of issue.

(5) a statement of the acts of the Commission, Vice-President, respectively, for the application of remedial measures, including the instruments for the implementation of remedial measures against a branch of an investment firm of a Member State, shall be published in the official journal of the European Union, as well as in two national dailies of each Member State in which the investment firm has a branch. The extract of the Act shall be provided to the Bulgarian language.

(6) the summary of the Act under para. 4 should contain a description of the legal and factual grounds for issuance of the Act, the name and address of the Court in which the Act can be challenged, as well as the time limit for appeal.

Art. 23. Before applying reorganisation measures to a branch of an investment firm of a third country which has branches on the territory of one or more Member States, the Commission shall inform the competent authorities of those Member States of its intention to implement remedial measures against such a branch, as well as their consequences. In cases where it is not possible, prior notification to the competent authorities, the Commission shall notify them immediately after the application of the measures.

Art. 23. (1) the Remedial measures taken by the competent authority of a Member State in relation to an investment firm, licensed in that Member State shall be recognised directly and without formalities in the Republic of Bulgaria and of the moment are subject to enforcement, have effect in relation to this branch of an investment firm, carrying out activity in the Republic of Bulgaria, as well as against third parties in the Republic of Bulgaria. The legal consequences of the remedial measures shall be governed by the law of the Member State concerned, unless this Act provides otherwise.

(2) persons who administer the territory of the Republic of Bulgaria, the remedial measures taken by the competent authority of a Member State, shall enjoy the same status and authority as may have under the law of that Member State. These persons apply the Bulgarian legislation on the disposal of the assets of the investment firm in the territory of the Republic of Bulgaria and in the settlement of employment relationships arising in the territory of the Republic of Bulgaria.

(3) the Remedial measures taken by the competent authority of a Member State in relation to a branch of an investment firm authorised in a third country are recognised directly and without formalities in the Republic of Bulgaria and of the moment enforceable shall have effect against third persons in the Republic of Bulgaria.

Art. 23 (1) competent for the winding-up or the opening of insolvency proceedings of an investment firm, licensed in the Republic of Bulgaria are Bulgarian judicial or administrative authorities. The decision of those authorities have action and the firm's branches in other Member States.

(2) except as in this act otherwise provided, in the case of winding-up proceedings and bankruptcy proceedings of an investment firm, licensed in the Republic of Bulgaria, the Bulgarian legislation shall apply, including:

1. the personal property that are the subject of the proceedings and the legal regime governing movable property acquired by the firm after the opening of the proceedings;

2. the rights of the investment firm and the powers of its liquidator;

3. the conditions under which compensation can be made;

4. the consequences of the opening of proceedings on current contracts to which the investment firm is a party;

5. the effects of production on the works, led by individual creditors against the investment firm;

6. claims which are brought to the firm, as well as their legal regime, if they arose after the opening of the proceedings;

7. the terms and requirements for submission and acceptance of the claims to the investment firm;

8. the rules on the distribution of the cash raised from the realisation of assets, the order of the claims of the creditors of the firm, as well as the rights of creditors who have obtained partial satisfaction after the opening of insolvency proceedings as a result of the realization of the collateral property or through a set-off;

9. the conditions for termination of the insolvency proceedings and the consequences of this;

10. the rights of creditors after termination of the proceedings;

11. arrangements concerning the costs of a trial;

12. the conditions and procedures for the notification of legal acts damaging the interests of the creditors, null and void, invalid or neprotivopostavimi to them.

Art. 23. (1) the Commission shall inform in good time the competent authority of the Member State in which an investment firm carries on business through a branch that has begun winding by informing it of the consequences resulting from them.

(2) the procedure for the notification under paragraph 1. 1 shall also apply in the case of termination of a branch in the Republic of Bulgaria of the firm with its head office in a third country, when the same investment firm has a branch in another Member State. In these cases, the Commission and the competent authority shall coordinate their activities within the framework of the proceedings with the competent administrative and judicial authorities of the other host Member States.

Art. 23. The invitation of the liquidator under art. 267 of the commercial law is with the title of all the official languages of the European Union "invitation to lodge a claim. Time limits that must be respected. "

Art. 23. (1) every creditor in the insolvency proceedings, including where a public authority has the right to lodge claims or to submit an objection concerning them in the official language or one of the official languages of the Member State concerned. In this case, the bringing of the claim under the title of the Bulgarian language "lodgement of claim".

(2) the liquidator shall have the right to require the submission of a translation of the Bulgarian language of the documents referred to in para. 1.

(3) unless otherwise provided by law, every creditor in the liquidation shall send copies of supporting documents has been taken, if any, and shall indicate the nature of the claim, the date of occurrence and size, the invocation of the privilege, the property collateral or lien, and what assets are covered by his security.

(4) the claims of all creditors of the firm under art. 23 (a), for which the winding up shall be treated equally and have the order for payment on the basis of the same criteria, regardless of whether they are incurred in the territory of the Republic of Bulgaria or on the territory of other Member States.

Art. 23. the liquidator and regularly and appropriately inform the creditors of the firm under art. 23 and who carry out liquidation, on the course of the proceedings.

Art. 23 HP. for the purposes of reorganisation measures or the opening of the firm suspension procedures under art. 23 and the legal consequences are governed as follows:

1. for employment contracts and relationships related to them – by the law of the Member State applicable to the employment contract;

2. for contracts giving the right of use or acquisition of immovable property, from the law of the State in which the property is located, as defined, and which things are real and movable;

3. the rights of the firm in relation to immovable property, a ship or an aircraft subject to registration rights for public directory – by the law of the Member State where the register is kept.

Art. 23 l. (1) application of reorganisation measures or the opening of the suspension procedures against the investment firm under art. 23 (a) shall not affect the property rights arising from the securities of creditors or third parties in respect of tangible or intangible assets, including real or movable, customized or generic certain items or sets of items that belong to the investment firm under art. 23 a, but are located on the territory of another Member State during the application of such measures or the opening of the procedure for the investment firm prekratitelnata under art. 23A.

(2) the rights under paragraph 1. 1 include the right:

1. wants to redeem or to cash assets and satisfy from the liquidation proceeds, including when the assets are subject to a lien or a mortgage;

2. preferred, including under bet on making or assignment as security;

3. a person who has rights to the property, to require its return or refund from whoever has it or used without legal basis;

4. use of the fruits of the assets as collateral.

(3) the right, recorded in a public register and enforceable against third parties, and which may be an acquired right under para. 1, is considered to be right on par. 1.


(4) the provisions of para. 1 does not exclude the possibility to request notification of certain legal acts null and void, invalid or neprotivopostavimi by the order of art. 23 e, para. 2, item 12.

Art. 23 m. (1) application of reorganisation measures or the opening of a procedure for the investment firm prekratitelna under art. 23 a, who is a buyer of property does not affect the seller's rights over the asset in a contract of sale with a retention of title until full payment of the price, when at the time of the application of such measures or the opening of the procedure for the investment firm prekratitelna under art. 23 and the property was located on the territory of another Member State.

(2) application of reorganisation measures or the opening of a procedure for the investment firm prekratitelna under art. 23 a, which is a property under contract at al. 1, gives no ground for rescission or termination of the contract, if the property was delivered as and does not constitute an obstacle to the acquisition of the ownership of the property by the purchaser, at the time when the application of such measures or the opening of the procedure for the investment firm prekratitelnata under art. 23 but the thing – the object of purchase and sale, was located on the territory of another Member State.

(3) the provisions of paragraphs 1 and 2. 1 and 2 shall not exclude the possibility to request notification of certain legal acts null and void, invalid or neprotivopostavimi by the order of art. 23 e, para. 2, item 12.

Art. 23. (1) the application of the reorganisation measures or the opening of a procedure for the investment firm prekratitelna under art. 23 (a) shall not affect the right of creditors to offset any of its claims against claims of the investment firm under art. 23 and, when necessary, under the law applicable to the claim of the investment firm under art. 23A.

(2) the provisions of para. 1 does not exclude the possibility to request notification of certain legal acts null and void, invalid or neprotivopostavimi by the order of art. 23 e, para. 2, item 12.

Art. 23 Oh. for the purposes of reorganisation measures or the opening of a procedure for the investment firm prekratitelna under art. 23 and the legislation applicable is:

1. the right of ownership or other rights to financial instruments within the meaning of art. 4, paragraph 1, item 50 (b) of Regulation (EC) no 575/2013, the existence or transfer of which presupposes their recording rights in the register, account or centralized in the depository institution is located or kept in a Member State – the law of the State where it is located or kept the relevant register, account or centralized deposit institution;

2. for netting agreements – legislation that applies to the Treaty, which provides for netting in accordance with the provisions of art. 100 and 103 of the recovery and restructuring of credit institutions and investment firms or relevant legislation of a Member State;

3. agreements to repurchase – legislation that applies to the redemption, provided that it does not violate the s. 1 subject to the provisions of art. 100 and 103 of the recovery and restructuring of credit institutions and investment firms or relevant legislation of a Member State;

4. for transactions carried out on a regulated market – the law applicable to the contract in respect of such transactions, provided that it does not violate point 1;

5. pending litigation regarding the property or the rights taken away by the investment firm under art. 23A – legislation of the Member State where the relevant case.

Art. 23 p. (1) persons who administer remedies, liquidator or other competent judicial or administrative authority of the sending State shall take all necessary measures for the registration of the remedy or the initiation of a procedure for the investment firm prekratitelna under art. 23 and in the commercial, property or another public register in the territory of the Republic of Bulgaria in cases where such registration is compulsory under the Bulgarian legislation.

(2) the costs of entry are considered part of the cost of the remedy or procedure for the investment firm prekratitelnata under art. 23A.

Art. 23 b. (1) the provision of art. 23 e, para. 2 shall not apply to rules declaring null and void, invalid or neprotivopostavimi of acts harmful to all creditors, where the beneficial owner of the Act, provides evidence that the injurious act, all lenders are subject to the legislation of another Member State and that law doesn't allow the disputing of the Act in this case.

(2) where the relief, as determined by the judicial authority, contains rules relating to the voidness, voidability or unenforceability referred to acts, damaging all lenders that acts have been committed prior to the enforcement of the measure itself, the rule in art. 23, para. 1, the second sentence shall not apply in the cases referred to in para. 1.

Art. 23. the validity of the Act, concluded after the application of therapeutic measure or after the initiation of the procedure for the investment firm prekratitelna under art. 23 and, by virtue of which the investment firm under art. 23 and dispose a consideration with immovable property, a ship or an aircraft subject to registration in a public register, or in financial instruments within the meaning of art. 4, paragraph 1, item 50 (b) of Regulation (EC) no 575/2013, or rights in such instruments the existence or transfer of, which implies their acceptance in the register, account or centralized in the depository institution is located or leads in another Member State, be governed by the legislation of that Member State, where this property or register is kept Bill or depository institution.

Art. 23 (1) all persons who give or receive information in connection with the notification or consultation procedures in this section are required to protect professional secrecy.

(2) paragraph 1 shall apply, in the event that the application is not art. 116 of the law on reconstruction and restructuring of credit institutions and investment firms.

Art. 23. (1) the decision of the competent authority in a Member State for the appointment of a person who administers the remedy or mandatory procedures for the investment firm under art. 23A, licensed in a Member State, shall have effect in the territory of the Republic of Bulgaria. Individuals demonstrate their assignment with presentation of a certified copy of the instrument of appointment, accompanied by a translation into Bulgarian language that is not legalized.

(2) persons Appointed under subsection. 1, as well as authorised by them have the right to exercise their powers, which derive from the legislation of the Member State, and to a branch of an investment firm referred to in art. 23 and in the territory of the Republic of Bulgaria, unless this Act provides otherwise. They assist the creditors of the investment firm under art. 23 and in the Republic of Bulgaria in connection with the exercise of their rights.

(3) when exercising its powers on the territory of the Republic of Bulgaria, the recruits under para. 1 must comply with Bulgarian legislation, including the procedures for liquidation of assets and the provision of information to employees. In the exercise of these powers they can't exercise coercion or to resolve legal disputes. "

4. Article 25 shall be amended as follows:

"Art. 25. Investment firm, with the exception of those referred to in art. 1, al. 1, item 2 of the recovery and restructuring of credit institutions and investment firms shall submit to the Commission for approval a healthy program when significant deterioration of its financial position. The requirements to the recovery program and the procedure for approval, as well as the procedure for the adoption of recovery plans shall be determined by Decree. "

5. Article 25 (b) is repealed.

6. In art. 122, para. 1, item 2, after the word "intermediary" is added in cases where the investment firm does not fall within the scope of art. 1, al. 1, item 2 of the recovery and restructuring of credit institutions and investment firms or the conditions are not present for the appointment of temporary Manager under art. 46 of the same law. "

§ 18. The law shall enter into force on the day of its publication in the Official Gazette with the exception of:

1. Article 139, para. 1 – 4, para. 6 and para. 9-11 coming into force in respect of investment firms by 1 January 2017.

2. Article 139, para. 7 and 8, which shall enter into force on 1 January 2025.

The law was passed by the National Assembly-43 on July 30, 2015 and is stamped with the official seal of the National Assembly.

President of the National Assembly Tsetska Tsacheva:

Annex No 1 to art. 6, al. 6

Content of the recovery plan:

1. A summary of the main elements of the plan and of the overall potential of the institution.

2. Summary of significant changes in the institution after the last presented to the BULGARIAN NATIONAL BANK, according to the Commission, the recovery plan.

3. Plan for public relations and disclosure of information describing the ways in which the institution intends to cope with the possible negative effects on the market.

4. A set of actions relating to capital and liquidity necessary for the maintenance or restoration of viability and financial health of the institution.

5. Provisional timetable for the implementation of each essential element of the plan.

6. A detailed description of any significant barriers to the effective and timely implementation of the plan, including analysis of the impact on the rest of the group, customers and counterparties.

7. Identification of critical functions.

8. A detailed description of the process for determining the value of the main business activities, operations and assets of the institution and the possibility of their sale.


9. A detailed description of how the planning of the restoration complies with the corporate governance structure of the institution, as well as of policies and procedures relating to the approval of the recovery plan, and an indication of the individuals in the organization responsible for the design and implementation of the plan.

10. rules and measures for the conservation or restoration of the institution's own funds.

11. Rules and measures, providing appropriate access to the institution's financing sources in emergency situations, including sources of liquidity; assessment of the available assets that can be used as collateral and the assessment of the ability to transfer liquidity between individuals and business activities of the group, to ensure the continuity of the operations and performance of its obligations when due.

12. Rules and measures to reduce the risk and the level of leverage.

13. Rules and measures for the restructuring of obligations.

14. Rules and measures for the reorganization of economic activities.

15. Rules and measures to ensure uninterrupted access to financial markets.

16. Rules and measures to ensure continuity of operational processes in the institution, including access to the infrastructure of the financial markets, information services.

17. Preparatory measures to facilitate the sale of assets or businesses in time to allow quick recovery of financial stability.

18. Other actions or strategies to guide the restoration of financial stability and the estimated financial implications.

19. the Preparatory measures that the institution has taken or plans to take to facilitate the implementation of the recovery plan, including the measures required to facilitate the timely recapitalisation of the institution.

20. A framework of indicators, which sets out the situations in which the can be taken out in the action plan.

Annex 2 to the art. 14, para. 11 and 12

Content of the restructuring plan:

1. A summary of the main elements of the plan.

2. Summary of significant changes occurring in the institution after the date of the last information in connection with the restructuring.

3. justification of the approach to the legal-organizational and functional differentiation of the critical functions and the main economic activities of the other functions of the institution, so that, if necessary, to ensure their continuity in the event of any of the conditions under art. 51, para. 3.

4. evaluation of the implementation of the schedule for any essential aspect of the plan.

5. A detailed description of the assessment of the possibility of restructuring carried out in accordance with art. 14, para. 4 and art. 26.

6. Description of all the measures required under art. 29, to overcome or eliminate barriers to opportunity for restructuring, identified as a result of the assessment pursuant to art. 26.

7. a description of the approaches to assessment of the value and opportunities for marketing of critical functions, the main business activities and assets of the institution.

8. A detailed description of the measures to ensure that the required pursuant to art. 16 information is up to date and at any time is available, according to the Commission.

9. the justification for the funding of the restructuring options to ensure that none of the means set forth in art. 14, para. 6.

10. A detailed description of the various restructuring strategies that can be applied depending upon the different possible scenarios and applicable deadlines.

11. a description of the significant commitment between functions and departments within the institution, and affiliation with external systems and markets.

12. a description of the possibilities for the preservation of access to payment and clearing services or to other critical infrastructure as well as an evaluation of the possibility of transferring the items to customers.

13. Analysis of the impact of the plan on employment relationships with employees of the institution, including the evaluation of all related costs.

14. Plan for relations with the means of mass communication and public relations.

15. The minimum requirement of own funds and eligible obligations under art. 69, para. 1 and a deadline for reaching this level, where applicable.

16. The minimum requirement for equity and financial instruments contractual sharing of losses pursuant to art. 70, para. 1 and a deadline for reaching this level, where applicable.

17. A description of the most important operations and systems to maintain the continuous operation of the operational processes of the institution.

18. Where appropriate, the opinion of the institution in connection with the restructuring plan.

Annex 3 to the art. 16, al. 1, item 2 the minimum information which the authority requires a restructuring of the institutions on the individual level and at the level of the group necessary for the development and updating of plans for restructuring:

1. A detailed description of the organizational structure of the institution, including a list of all entities of the group.

2. Indication of shareholders, their shares and voting rights, expressed in absolute and percentage in each legal person.

3. Location, the jurisdiction which is incorporated, licences and main managers for each entity of the group.

4. Outline of critical operations and the main economic activities of the institution, including all material assets, holdings and obligations related to the operations and activities, with an indication of the relevant entities of the group.

5. A detailed description of the obligations of the institution and of the entities of the group, at least the type and amount of short-term and long-term debt, secured, unsecured and subordinated obligations.

6. Details of the eligible liabilities of the institution.

7. a description of the processes to determine in whose favour the institution has provided a guarantee, the person who kept the collateral, and the jurisdiction in which it is located.

8. a description of the off-balance-sheet positions of the institution and the entities of the group, including their compliance with the critical operations and core business activities.

9. the Essential hedging of the institution, including the legal entities referred to in paragraph 1.

10. determination of the main or most important partners of the institution, and an analysis of the impact of the failure to fulfil obligations on their part on the financial situation of the institution.

11. The systems that the institution used to major in number or value commercial operations, including their corresponding legal persons referred to in paragraph 1, the critical operations and the main economic activities of the institution.

12. Payment and clearing and settlement systems, in which the institution is a member, directly or indirectly, including their corresponding legal persons referred to in paragraph 1, the critical operations and the main economic activities of the institution.

13. A detailed list and description of the main management information systems, including those for risk management, accounting, financial and supervisory reporting, including their corresponding legal persons referred to in paragraph 1, the critical operations and the main economic activities of the institution.

14. An indication of the persons responsible for the systems referred to in paragraph 13, the corresponding service level agreements and software systems or licences, including their corresponding legal persons referred to in paragraph 1, the critical operations and the main economic activities of the institution.

15. A scheme of legal persons referred to in paragraph 1, and the inter-linkages between them vzaimozavisimostite, including:

a) common or shared premises, staff and systems;

(b) arrangements for the provision of) capital funding or liquidity;

in the existing or contingent) credit exposures;

d) agreements for mutual guarantee agreements for cross-use of collateral, cross-default provisions and netting agreements against the institution and its related persons;

e) transfers of risk and mirror agreements commercial operations, service level agreements.

16. name – for any legal person referred to in paragraph 1 to the competent authority and the authority to restructure.

17. Members of the management body responsible for providing the information necessary for the preparation of the plan for the restructuring of the institution, as well as individuals, if they are different, responsible for legal persons under item 1, the critical operations and core business activities.

18. a description of the mechanisms implemented by the institution, who shall ensure that, where appropriate, by restructuring the restructuring will have all the information it considers necessary for the application of the tools and powers for the restructuring.

19. All agreements entered into by the institution and legal persons referred to in paragraph 1 with the third parties who may be terminated as a result of the decision of the authority to implement restructuring tool for restructuring, with an indication whether the consequences of termination may affect the implementation of the instrument for the restructuring.

20. a description of the possible sources of liquidity to support restructuring.

21. Information on weights on the assets, liquid assets, off-balance-sheet activities, strategies for hedging and accounting practices.

Annex 4 to the art. 26, al. 5 and art. 27, al. 6 Questions, which the authority to examine restructuring in assessing the possibility of restructuring the institution or group:

1. The extent to which the institution can distribute economic activities and critical operations under the relevant legal persons.

2. The extent to which the legal and corporate structure with the essential economic activities, and critical operations.

3. The degree of availability of effective mechanisms for securing key personnel, infrastructure, funding, liquidity and capital to support and maintain the essential economic activities, and critical operations.


4. The extent to which the agreements on the level of service that the institution uses, are effectively applicable to restructuring.

5. The extent to which the institution's management structure facilitates the management and application of its internal rules in terms of service level agreements.

6. The extent to which the institution has a procedure for transfer to third parties for services provided by service level agreements, in the event of the formation of critical features or major economic activities in a new legal person.

7. The extent to which there are contingency plans and measures to ensure continuity of access to payment systems and settlement systems.

8. How are appropriate management information systems to ensure the possibility of restructuring the authority where necessary to obtain accurate and complete information on essential economic activities, and critical operations in order to facilitate rapid decision-making process.

9. The capacity of management information systems to provide at any time the information essential for the effective restructuring of the institution, including b″rzopromenâŝi conditions.

10. The extent to which the institution is testing its management information systems in terms of the stress scenarios that have been set by the BNB, respectively by the Commission.

11. The extent to which the institution can provide continuity of its management information systems both in itself and in relation to the new Bank, where there are separate critical operations and core business activities.

12. The extent to which the Bank has appropriate processes to ensure that the Bank and other authorities for the restructuring will be provided with the information needed for the determination of the depositors and the amounts guaranteed by the FGVB or by the deposit guarantee scheme of the Member State.

13. When the group uses intercompany guarantees or mirror transactions – the extent to which these guarantees or transactions are concluded at market conditions, and to what extent are reliable systems for managing risk in respect of these guarantees.

14. The extent to which the use of guarantees and transactions under item 13 increases the risk of spreading problems in the whole group.

15. The extent to which the legal structure of the Group shall prevent the application of tools for restructuring due to the number of legal persons, the complexity of the structure of the group or the difficulty of economic activities to be referred to the designated entities of the group.

16. The size and type of eligible obligations of the institution.

17. Where the estimate affect the mixed-activity holding company – the extent to which the restructuring of institutions and financial institutions of the Group may have a negative impact on non-financial part of the group.

18. The availability and security of service level agreements.

19. If the authorities of the third country concerned have the tools needed to support the restructuring of the restructuring of the NATIONAL BANK and other authorities for the restructuring of the European Union, and the scope of coordinated action between the BULGARIAN NATIONAL BANK, as well as the bodies of the European Union, and of the third State.

20. The extent to which it is possible to use the tools for restructuring in a way that meets the objectives of the restructuring, taking into account the existing instruments and the structure of the institution.

21. The extent to which the structure of the group allows the BNB, respectively, and of other bodies for restructuring to restructure the entire group or one or more of its people without causing significant direct or indirect adverse effects on the financial system, on the confidence of the market or the economy, and in order to achieve the optimum value of the group as a whole.

22. The mechanisms and the means by which it can facilitate restructuring, if the group includes subsidiaries established in different jurisdictions.

23. Reliability of the use of the instruments of restructuring in a way that achieves the objectives of the restructuring, taking into account their possible impact on lenders, contractors, customers and employees and the possible actions you can take organs from third countries.

24. The extent to which the impact of the restructuring of the institution on the financial system and confidence in the financial markets can be adequately assessed.

25. The extent to which the restructuring of the institution can have a significant direct or indirect adverse effects on the financial system market confidence and the economy.

26. The extent to which the problems spread to other banks or the financial markets may be limited by the application of tools and powers for the restructuring.

27. The extent to which the restructuring of the institution may lead to significant effects on payment and settlement systems.

When assessing the possibility of restructuring the group, references to the Bank in this annex shall be construed as including any institution or society of art. 1, al. 1, item 3-5 within the group.

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