Name of the law, Law on the activities of collective investment schemes and of other collective investment undertakings of the Name Bill Bill on the activities of collective investment schemes and other undertakings for collective investment acceptance date 20/09/2011 number/year Official Gazette 77/2011 DECREE No. 205

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 on the activities of collective investment schemes and of other collective investment undertakings, adopted by the National Assembly of the HLI 20 September 2011.

Issued in Sofia, 28 September 2011.

The President of the Republic: Georgi Parvanov

Stamped with the State seal.

Minister of Justice: Margarita Popova

LAW

on the activities of collective investment schemes and of other collective investment undertakings

PART ONE

BASICS

Art. 1. This law shall be governed:

1. the activities of collective investment schemes and management companies;

2. the activities of other undertakings for collective investment;

3. requirements to the persons who manage and control the persons referred to in paragraphs 1 and 2, as well as to persons who own qualifying holdings in management companies;

4. State supervision to ensure compliance with this law.

Art. 2. the purpose of this law is:

1. ensure the protection of the rights and interests of investors, including by creating the conditions to enhance their awareness of the market shares of the undertakings for collective investment;

2. creation of conditions for the development of a fair, open and efficient market shares of undertakings for collective investment;

3. maintain stability and public confidence in the capital market.

Art. 3. The regulation and supervision of the activities and the persons under art. 1 shall be carried out by the financial supervision Commission, hereinafter referred to as "the Commission", and by the Vice-President of the Commission, supervising the management of the investment activity oversight ", hereinafter referred to as" Vice-President ".

PART TWO

COLLECTIVE INVESTMENT SCHEMES

TITLE FIRST

CONDITIONS FOR CARRYING OUT THE ACTIVITY OF A COLLECTIVE INVESTMENT SCHEME

Chapter one

BASICS

Art. 4. (1) a collective investment scheme is a collective investment undertaking which satisfies the following conditions:

1. his only goal is the collective investment in transferable securities or other liquid financial assets referred to in art. 38, para. 1, the funds raised through a public offering, and acting on the principle of risk spreading;

2. the shares are dematerialised and are subject to redemption, directly or indirectly, based on its net asset value upon the request of the holders of the shares.

(2) the actions of the collective investment scheme undertaken in order to ensure that the stock exchange value of its units does not differ significantly from their value as determined on the basis of the net asset value shall be regarded as equivalent to the actions and in the redemption.

(3) the collective investment scheme is not entitled to carry out any other activity outside the Al. 1 except where this is necessary for the conduct of the activity under para. 1 and of the Al. 2. Art. 5. (1) the collective investment scheme is set up as a mutual fund or an investment company.

(2) Mutual Fund is a separate property and is considered to be established by the entry in the register under art. 30, para. 1 of the Act on the financial supervision Commission. For the mutual fund shall apply section XV "company" of the law on obligations and contracts, with the exception of art. 359. 2 and 3, art. 360, 362, art. 363, the letters "c" and "d" and art. 364, in so far as this Act or in the rules of the mutual fund is not otherwise provided for.

(3) the investment company is a joint-stock company with the one-tier system of Government and based in the Republic of Bulgaria, which are set up only a constituent Assembly.

(4) the activities of the collective investment scheme is managed by a management company only pursuant to a contract, respectively, in accordance with the rules of the mutual fund.

(5) the collective investment scheme may not be converted into a collective investment undertaking which is not a collective investment scheme for the purposes of this Act.

Art. 6. (1) for carrying out the activity as a collective investment scheme is required to be issued a licence for carrying out activity as an investment company, permission to organize and manage a mutual fund by the Commission. The resulting license permission gives the right to the collective investment scheme to carry on business within the territory of all the Member States.

(2) no one has the right to carry on business under art. 4, al. 1 to license, permit, respectively.

(3) a person who does not hold a licence, permission to carry out activities under art. 4, al. 1, could not use his name, advertising or other activity the words "investment company", respectively "mutual fund, mutual fund, investment fund or other equivalent words in Bulgarian or foreign language, denoting the conduct of such activity.

Art. 7. (1) the subscribed capital of the investment company shall be not less than 500 000 BGN. In the commercial register shall be entered the capital with which the company is incorporated.

(2) the contributions to the capital can be made only in cash.


(3) not less than 25 per cent of the capital of Pará. 1 must be paid when submitting the application for the issuing of a licence for carrying out activity as an investment company, and the rest – within 14 days of receipt of written notification from the Commission that would issue the license after payment of the full amount of capital.

(4) the entry of the company in the commercial register his capital is always equal to the net asset value. It may not be less than EUR 500 000.

(5) the Capital investment company shall be increased or reduced according to the change in net asset value, including as a result of the sold or bought back shares. The provisions of art. 192-203 and 246 of the commercial code do not apply.

(6) investment company issued subordinated cash shares with one vote. Except in the formation of his company shares shall be acquired on issue price fixed on the net asset value. The provisions under art. 176, para. 2 and 3 and article. 188-191 of the commercial code do not apply.

(7) the company may issue bonds and other debt securities.

Art. 8. in so far as this Act provides otherwise, on the procedures for the convening and holding of general meeting of shareholders of an investment company and distribution of dividend shall apply mutatis mutandis the provisions of Chapter 8 of the law on public offering of securities.

Art. 9. (1) the net asset value of the Fund may not be less than EUR 500 000. This minimum must be reached within one year of receiving authorization to organize and manage a mutual fund.

(2) Mutual Fund is considered to be the issuer of the shares, of which it is divided. The shares entitle the relevant part of the assets of the Fund, including the liquidation of the Fund, the right of redemption, as well as other rights provided for in this Act and the Fund rules.

(3) mutual funds may issue on the basis of the net asset value and partial shares against cash contribution made by a specified amount, if the amount paid cannot be given integer partitions.

(4) mutual funds may distribute income in proportion to the shares held under the conditions and in accordance with procedures laid down in the Fund rules.

(5) the conditions for participation in the mutual fund, its organization, management, and termination shall be determined by the rules of the mutual fund.

Art. 10. (1) a person who is selected for the Member of the Board of Directors of an investment company, you must not:

1. convicted for crimes against property, against the holding or against financial, tax and social security system carried out in the Republic of Bulgaria or abroad, unless it was vindicated;

2. any member of the management or supervisory authority or a member having unlimited liability in the company's bankruptcy proceedings, openly or in closed due to bankruptcy a company if you are left unsatisfied creditors;

3. declared bankrupt or is in bankruptcy proceedings;

4. spouse or relative in a straight or collateral relatives up to the third degree inclusive, or by affinity up to the third degree with another Member of the Board of Directors of the company;

5. deprived of right to materialnootgovorna loan Office.

(2) the requirements of paragraphs 1 and 2. 1 also apply to individuals who represent the legal persons-members of the Board of Directors of the investment company.

(3) the requirements of paragraphs 1 and 2. 1 shall also apply to all other persons, who may conclude solely or jointly with another person trades on behalf of the investment company.

(4) the circumstances referred to in paragraph 1. 1, item 1 shall be certified by a certificate of conviction, respectively with the equivalent document, and under para. 1, item 2-5 shall be certified by a declaration.

(5) the persons referred to in para. 1-3 shall notify the Commission of any change in the circumstances of them declared under para. 1 within three business days of the change.

Art. 11. The provisions of this part shall not apply to the activities of:

1. collective investment undertakings which raise funds without a public offer shares for sale within the European Union or in any part thereof;

2. collective investment undertakings whose units pursuant to the Fund rules or the articles of incorporation may be offered to the public only in third countries;

3. undertakings for collective investment governed in part three, as far as in this act otherwise provided;

4. holding companies whose funds are invested through their subsidiary companies primarily in assets other than transferable securities of the type referred to in art. 38, para. 1. Chapter two

ISSUE AND WITHDRAWAL OF AUTHORISATION TO AN INVESTMENT COMPANY AND THE PERMISSION TO ORGANIZE AND MANAGE A MUTUAL FUND

Art. 12. (1) for the issuance of a license for carrying out of the business of an investment firm shall submit an application to the Commission in a form approved by the Vice-President, shall apply:

1. the statutes;

2. data for the subscribed and paid-up capital;

3. data and other necessary documents for the members of the Board of Directors of the investment company, respectively, for natural persons, legal persons, representing the members of the Board of directors or other persons empowered to manage and represent, as well as for their professional qualifications and experience;

4. the contract with the management company and the depositary contract services;


5. the names and particulars of persons who directly or indirectly own 10 or over 10 percent of the shares with voting rights of the applicant or may exercise control over it, and the number of their votes; individuals submit written declarations regarding the origin of the funds from which contributions are made against subscriptions of shares, including whether funds are borrowed, and the taxes paid by them in the last 5 years in a form approved by the Deputy Chairman;

6. rules for the evaluation of portfolio and determine net asset value;

7. the prospectus of the investment company and the document with key information for investors;

8. rules for risk management;

9. other documents and particulars laid down by Ordinance.

(2) for the issuance of authorization to organize and manage a mutual fund management company shall submit an application to the Commission in a form approved by the Vice-President, shall apply:

1. the Fund rules;

2. the decision of the competent authority of the management company to organize the mutual fund;

3. rules for the evaluation of portfolio and determine net asset value;

4. the contract for depository services;

5. the prospectus of the Fund and the document with key information for investors;

6. rules for risk management;

7. other documents and particulars laid down by Ordinance.

(3) on the basis of the documents submitted, the Commission shall establish the requirements for the issuing of a licence, permit, respectively. If the submitted information and documents are incomplete or substandard or need any additional information or evidence for the correctness of the data, the Commission sends a message and set a time limit for the removal of the identified deficiencies and non-conformities or for the submission of additional information and documents, which may not be less than one month and longer than two months.

(4) If the notice under paragraph 1. 3 do not be accepted by the applicant to the designated mailing address, the time limit for their submission runs from putting the message on a specially defined place in the building of the Commission. This circumstance shall be certified by a Protocol drawn up by officials designated by order of the President of the Commission.

(5) the Commission shall take a decision on the application within two months of receiving it, and when they were requested additional information and documents – within two months of receiving them, respectively, by the end of the period referred to in paragraph 1. 3, second sentence.

(6) Simultaneously with the issuance of the licence of an investment company and the authorization of the management company to organize and manage a mutual fund prospectus and the Commission confirms the document with key information for investors of the collective investment scheme.

(7) the applicant shall be notified in writing of the decision within 7 days.

(8) upon issue of a license for carrying out the activity as an investment company, permission to organize and manage a mutual fund investment company, according to the contract fund fits into its register by the Commission under art. 30, para. 1 of the Act on the financial supervision Commission.

Art. 13. (1) in addition to the data required under the commercial law, the statutes of incorporation must include:

1. the main aims and limits of investment activity, as well as the investment policy of the investment company;

2. the share of investments by types of assets;

3. remuneration and the methods for calculating the remuneration of the management company, respectively, of the members of the Board of Directors;

4. the allocation of rights and obligations between the Board of Directors of the company and the management company;

5. the conditions and procedures for the calculation of the net asset value, the issue value and the price of shares in the buyback and the dividend if such is provided for;

6. terms and conditions for the redemption of the shares and the conditions for the suspension of the redemption and distribution of the dividend when one is provided, or for reinvestment;

7. the conditions for the return of the depository bank and the rules for ensuring the interests of the shareholders in the event of such substitution;

8. the conditions for the replacement of the management company and the rules for ensuring the interests of the shareholders in the event of such replacement.

(2) the rules of mutual fund should contain:

1. the name of the mutual fund;

2. information about the person who organizes or manages the mutual fund;

3. the main objectives and restrictions on investment activities, as well as the investment policy;

4. detailed rules for the calculation of the net asset value, the issue value and the price of shares in "buy-back" programme;

5. methods of valuation of assets and liabilities;

6. the rights that give the shares;

7. the remuneration of the management company, the fees are deducted from the asset management company for sale and redemption of shares, and other fees, if any, as well as methods for their calculation;

8. rules for determining the remuneration of the depository bank;

9. terms and conditions for the redemption of its shares and the conditions for the suspension of the redemption;

10. terms and conditions for distribution of income or reinvestment;

11. the conditions for the return of the depository bank and the rules for ensuring the interests of unit-holders in the event of such substitution;


12. the conditions for the replacement of the management company and the rules for ensuring the interests of unit-holders in the event of such replacement.

Art. 14. (1) a licence Issued by the Commission for the carrying out of the activity as an investment company or permission to organize and manage a mutual fund have effect within the territory of all the Member States.

(2) the Commission may not require collective investment scheme to be solely managed by the management company, originating in the Republic of Bulgaria, as well as to require the management company originating in another Member State to exercise its activities by delegating the activities on the territory of the Republic of Bulgaria.

Art. 15. (1) the Commission shall refuse to issue a license to perform the activity as an investment company, if:

1. the statutes of the company does not comply with the law;

2. the subscribed capital shall not satisfy the requirements of art. 7, para. 1;

3. the contract with the management company does not meet the requirements of this law and its implementing acts;

4. the members of the Board of Directors does not meet the requirements of art. 10;

5. persons who hold, directly or indirectly, 10 and more than 10 percent of the votes in the general meeting of the investment company, with the activity or the impact on decision making can harm the security of investments;

6. persons who hold, directly or indirectly, 10 and more than 10 percent of the votes in the General Assembly, have made contributions with borrowed funds;

7. the depository bank or the Treaty with the depository bank do not meet the requirements of the law or its implementing acts;

8. the prospectus and/or document with key information for investors of the investment company do not comply with the requirements of this law and its implementing acts;

9. in accordance with the law or the statutes are the investment company may not offer their shares to the territory of the Republic of Bulgaria;

10. are not sufficiently insured interests of investors;

11. the management company is authorized to carry out the activity in accordance with Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ L 302/57 from 17 November 2009), hereinafter referred to as "the directive 2009/65/EC", in their Member State of origin.

(2) the Commission shall refuse to issue a permit to organize and manage a mutual fund, if:

1. the applicant does not comply with the requirements of the law;

2. mutual fund rules do not meet the requirements of the law and its implementing acts;

3. the depository bank or the Bank depositary does not meet the requirements of the law or its implementing acts;

4. the prospectus and the document with key information for mutual fund investors do not comply with the requirements of the law and its implementing acts;

5. According to the law or rules, mutual fund may not offer their shares to the territory of the Republic of Bulgaria;

6. are not sufficiently insured interests of investors;

7. the management company is authorized to carry out the activity in accordance with Directive 2009/65/EC in their Member State of origin.

(3) in the cases referred to in para. 1, item 1 – 4, 7 and 8, respectively, under para. 2, item 2, 3 and 4, the Commission may refuse to issue a license, permission only if the applicant has not remedied any deficiencies or has not provided the required documents within a period specified by the Office, which may not be less than one month.

(4) the refusal of the Commission be motivated in writing.

Art. 16. In cases of refusal under art. 15 the applicant may make a new application for the issuing of a licence, permit, respectively no earlier than six months from the entry into force of the decision of refusal.

Art. 17. (1) the registry Agency entered an investment company in the trade register, be submitted after the relevant licence issued by the Commission.

(2) the investment company shall notify to the Commission for registration within 7 days of the transfer.

Art. 18. (1) a change in the rules, respectively, in the Statute of a collective investment scheme, replacing the depository bank and the management company, a change in the rules for risk management, portfolio valuation rules and establishing net asset value and change the custody agreement is permitted after approval by the Vice-President.

(2) for approval under subsection. 1 an application in a form approved by the Deputy Chairman. The Vice-President shall issue or refuse to issue an approval under paragraph 1. 1 within 14 days of receipt of the application with the annexes thereto, and if the requested additional information and documents from receipt.

(3) on the basis of the documents presented Vice President lays down the requirements for the issuance of the requested approval. If the submitted information and documents are incomplete or substandard or need additional information, the President sends a message and set a time limit for the removal of the identified deficiencies and non-conformities or to provide additional information and documents.


(4) If the notice under paragraph 1. 3 do not be accepted by the applicant to the designated mailing address, the term for elimination of deficiencies and non-conformities, respectively, for the submission of additional information and documents from the placement of the message of the special place in the premises of the Commission. This circumstance shall be certified by a Protocol drawn up by officials designated by order of the Vice-President.

(5) the Vice President refused to issue an approval under paragraph 1. 1 if you have not complied with the requirements of the law or of the instruments for its implementation, or are not insured the interests of investors. The surrender shall be motivated in writing.

(6) the applicant shall be notified in writing of the decision within three days.

(7) the registry Agency entered in the commercial register the change in the statutes of incorporation upon presentation of the approval of the Vice President.

Art. 19. (1) the Commission takes the issued license, if the investment company:

1. do not begin to carry out the activity concerned within 12 months of the issuance of the license, expressly renounces the authorisation is issued, or not carried out activities for more than 6 months;

2. for 6 consecutive months of varshets in net asset value is less than 500 000 BGN.;

3. submitted false data, which served as the basis for the issuance of the licence;

4. no longer fulfils the conditions under which the licence was issued;

5. does not meet the requirements for liquidity, provided for in the Ordinance;

6. gross or systematic breaches the provisions of this law or its implementing acts.

7. don't chose a new management company or not is itself in the cases under art. 157, para. 1, item 2.

(2) the Commission takes the issued authorization to organize and manage a mutual fund:

1. If, for one year from the receipt of the authorization on the net asset value of the Fund balance does not reach 500 000 BGN.;

2. in the cases referred to in para. 1, item 1 – 5 and 7;

3. If this is necessary to protect the interests of investors.

Art. 20. The Commission shall publish on its website the laws, regulations and administrative procedures that are related to the establishment and operation of a collective investment scheme, the Bulgarian and English version and update them in the event of a change in a timely manner.

Chapter three

PUBLIC OFFERING AND REDEMPTION OF UNITS OF A COLLECTIVE INVESTMENT SCHEME

Art. 21. (1) the collective investment scheme is obliged to offer its shares to investors at the issue price based on the net asset value, and at the request of the holders of shares to buy them at a price based on the net asset value, under conditions and in accordance with procedures laid down in this Act, the acts for its implementation and in the statutes, the rules in the mutual fund except in the case referred to in art. 22, para. 1, 3 and 5.

(2) the issue value and the redemption price shall be calculated from the depository bank or of the management company under the supervision of the depository bank.

(3) the issue value and the redemption price shall be determined at least twice a week at regular intervals.

(4) if provided for in the Statute, respectively in the rules of the collective investment scheme, the issue may not exceed the net asset value per share by the amount of the costs of the issue.

(5) if provided for in the Statute, respectively in the rules of the collective investment scheme of redemption price may be lower than the net asset value per share by the amount of the cost of redemption.

(6) the obligation for redemption is implemented within 10 days of a written request and submission of a price based on the price of redemption for the day following the day on which the request is made.

(7) all orders for the purchase of shares of collective investment scheme and all orders to buy back its shares received in the period between the two dates for the izčislâvaniâ of the issue value and the redemption shall be carried out according to the same value.

(8) the collective investment scheme issue, sell and buy back their shares through a management company on the basis of a written contract with the client.

(9) the management company provides for entry to the national registration system, led by the "central depository" ad, information about novoemitiranite and bought back shares, as well as for those who bought shares and whose shares are bought back.

Art. 22. (1) the collective investment scheme may suspend the redemption of its shares under the conditions and in accordance with the procedure laid down in the statutes, respectively, in the rules, but only in exceptional cases, if circumstances so require and the suspension is justified in view of the interests of holders of shares, including in the following cases:

1. where the regulated market on which a material part of the assets of the collective investment scheme are admitted or traded, the conclusion of transactions is terminated, suspended or is subject to restriction;

2. where cannot be properly evaluated the assets or liabilities of the collective investment scheme or it may not dispose of them without damaging the interests of holders of shares;

3. when a decision is taken to suspend or convert through a merger or acquisition of a collective investment scheme under the conditions and by the order of chapter fourteen.


(2) in the cases referred to in para. 1 the collective investment scheme shall notify the Commission and the competent authorities of all Member States in which its shares offered for the decision taken by the end of the working day accordingly notify the resumption of redemption by the end of the working day preceding the resumption.

(3) in making a decision under paragraph 1. 1 the collective investment scheme is bound to cease immediately and the issuance of shares during the period of suspension of the redemption.

(4) the collective investment scheme management company accordingly are obliged to inform the holders of the shares in the cases referred to in para. 1 of the decision taken to suspend redemption, as well as in the subsequent decision for his recovery. Collective investment scheme management company, accordingly discloses on its website the decision on the suspension of the re-purchase of its resurgence, respectively, and when its shares are admitted to trading on a regulated market, should inform and market within the time limit referred to in paragraph 1. 2.

(5) the Commission shall take a decision on the suspension of the redemption, in the event that the interests of the unit-holders or of the market so require.

Art. 23. (1) the rules for the calculation of the net asset value of the collective investment scheme and the rules for the calculation of the net asset value and the redemption price shall be determined in the statutes, respectively in rules of the collective investment scheme.

(2) the requirements of the rules for determining the net asset value, the issue value and the redemption of collective investment scheme shall be determined by Decree.

(3) distribution and reinvestment of revenues from the collective investment scheme is carried out in accordance with the Statute, respectively, the rules of collective investment scheme.

Art. 24. (1) the collective investment scheme is not entitled to issue shares, the issue price is not paid in full.

(2) the restriction under paragraph 1. 1 shall not apply in the case of allocation of shares as bonuses under conditions and in accordance with procedures laid down in the statutes, respectively, in the rules of the collective investment scheme.

Chapter four

GENERAL REQUIREMENTS

Art. 25. (1) the depository bank, as well as members of the governing and supervisory bodies to her may not be the same or a related person to the management company, with the members of the management or supervisory bodies or by the persons under art. 10 or with any person who performs management functions in an investment company, as well as with persons as control an investment company.

(2) in the performance of their duties the depository bank shall act independently and solely in the interest of the holders of shares in a collective investment scheme.

Art. 26. (1) the contract with the management company can be terminated by an investment company with three months ' notice, after approval by the Vice-President of the replacement of the management company.

(2) upon cancellation of the contract under paragraph 1. 1 of the investment company for default of the management company last terminate immediately the management of the activities of the investment company. Pending the conclusion of a contract with another management company or the investment company's transformation through a merger or acquisition, the management authority of incorporation carried out, by way of exception management activities for a period not exceeding three months.

(3) upon the withdrawal of the licence to perform the activity in the event of winding up or bankruptcy of the management company, which manages the Fund, it shall terminate the administration of the Fund and shall immediately forward of the depository bank of the Fund all available to him information and documentation in connection with the management of the Fund. Pending the conclusion of a contract with another management company or to a conversion of the Fund through a merger or acquisition, the depository bank performed exceptionally, management actions for a period not exceeding three months.

(4) the contract with the depository bank may be terminated by an investment company, respectively, by the management company on behalf of mutual fund with three months ' notice, after approval by the Vice-President of the replacement of the depository bank.

Art. 27. (1) the investment company, as well as the management company and the depositary bank, when acting on behalf of the collective investment scheme may not use loans except in cases under para. 2 and 3.

(2) the collective investment scheme may acquire foreign currency by means of compensation loan on terms laid down by regulation.

(3) the President may authorize the collective investment scheme to use a loan worth up to 10 percent of its assets, if both the following conditions are met:

1. the loan is for a period not exceeding three months, and is required to cover the obligations of the redemption of the units of the scheme;

2. the terms of the loan contract are not less favourable than usual for the market and the statute or the rules of the collective investment scheme allowed the conclusion of such a contract.

(4) the Vice-President shall issue or refuse to issue an authorization under paragraph 1. 3 by the procedure of art. 18, al. 2-6.

(5) acts performed in violation of the Al. 1, are invalid in relation to the holders of the shares.


Art. 28. (1) the investment company, as well as the management company and the depositary bank, when acting on behalf of the collective investment scheme may not provide loans or guarantees to third parties.

(2) acts performed in violation of the Al. 1, are invalid in relation to the holders of the shares.

(3) Notwithstanding the limitations under para. 1 the persons referred to in para. 1 can acquire transferable securities, money market instruments or other financial instruments referred to in art. 38, para. 1, item 5, 7, 8 and 9, when their value is not fully paid.

Art. 29. An investment company and the management company and the depositary bank when operating at the expense of the collective investment scheme, cannot conclude a contract for short sales of transferable securities, money market instruments or other financial instruments referred to in art. 38, para. 1, item 5, 7, 8 and 9.

Art. 30. (1) the remuneration and expenses, which the management company is entitled to charge for the expense of the collective investment scheme, as well as the methods for the calculation of this remuneration shall be determined under the conditions and in accordance with the procedure laid down in this law, in its implementing acts or statutes, respectively in the rules of the collective investment scheme.

(2) a management company may charge fees that are not provided for or exceed the amount provided for in the statutes of incorporation, respectively in the rules on mutual fund fees.

Art. 31. The investment company may not exercise control over the management company.

Art. 32. An investment company and the management company shall adopt rules concerning the personal transactions of the members of the Board of Directors of the investment company, according to members of the management or supervisory bodies of the management company, to ensure that it will not be concluded personal transactions or investments supported by these individuals, allowing them together or separately to exercise significant influence over the issuer, or which would lead to a conflict of interest or are the result of misuse of information, which they acquired in connection with his professional activity within the meaning of the law against market abuse in financial instruments.

Art. 33. other requirements for the activity, the structure of assets and liabilities and liquidity of the collective investment scheme aimed at protecting the interests of investors, including the maintenance and preservation of the records of the collective investment scheme, the annual and six-monthly statements and their spread, the method and the procedure for the assessment of the assets and liabilities of the collective investment scheme, disclosure of information, the content of your marketing messages in connection with shares of collective investment scheme , the activity of sale of shares, the contents of the contract of the investment company with the management company and the depositary bank and the contents of the contract of the asset management company with the depository bank shall be determined by Decree.

Chapter five

OBLIGATIONS OF THE DEPOSITARY BANK

Art. 34. (1) non-cash financial instruments owned by the collective investment scheme shall be entered in a depository institution to the sub-account of the depository bank and the remaining assets are stored in a depository bank. The depository bank shall carry out all payments on account of collective investment scheme.

(2) the liability of the depositary bank in accordance with art. 37 is not altered by the fact that it has transmitted all or part of the assets for storage in a third party.

(3) the depositary Bank shall: 1. ensure the issuance, sale, redemption and cancellation of units of the collective investment scheme in accordance with the law and with the articles of Association, rules, respectively;

2. to ensure compliance with the law and the rules of the collective investment scheme in calculating the value of the shares;

3. to dispose of the assets entrusted to the collective investment scheme only on the instructions of the management company, unless they are contrary to the law, the Statute, according to the rules of the collective investment scheme or of the depositary service;

4. to monitor the translation within the usual deadlines for the benefit of the collective investment scheme of all monies arising out of transactions with the assets of the portfolio;

5. to ensure the collection and use of the income of collective investment scheme in accordance with the law and with the articles of Association accordingly to the rules;

6. regularly report to the collective investment scheme for the entrusted assets and operations.

Art. 35. (1) the depositary bank, the Bank may be included in the list approved by the Vice-President, which meets the following requirements: 1. received a license from the National Bank to carry out banking activities, or is a Bank of a Member State, that carries out banking activities on the territory of the Republic of Bulgaria through a branch;

2. She had permission to carry out transactions in financial instruments;

3. received permission to perform depository or trustee institution pursuant to art. 2, al. 2, item 4 of the law on credit institutions;

4. license, business transactions or operations are not limited to a degree that would impede or will make it impossible the implementation of the measures provided for in this Act or in the contract for the depository services;


5. in the last 12 months are not applied her measures under art. 103, para. 2, item 14, 19, 20 or 21 of the law on credit institutions or is not sanctioned for violation of the requirements of this Act;

6. has the personnel and information resources for the effective performance of depositary functions and duties in accordance with the requirements of this law and its implementing acts.

(2) for inclusion in the list under para. 1 the depository bank shall submit an application in a form approved by the Deputy Chairman. Bank is excluded from the list, when it ceases to meet any of the requirements under paragraph 1. 1. (3) the Bulgarian National Bank shall inform the Commission in good time of any measure or sanction, which limited license, transactions or operations of the depository bank to an extent which makes it difficult to make or will make it impossible the implementation of the measures provided for in this Act or in the custody agreement obligations.

Art. 36. (1) the depositary Bank shall take account of individual assets of the collective investment scheme of their own assets and from other client assets. The depository bank shall not be responsible for its obligations to its lenders with assets of the collective investment scheme.

(2) the depositary Bank shall assist the collective investment scheme for the obtaining of information and participation of the General meetings of issuers whose financial instruments the collective investment scheme is invested and assume other duties related to entrusted assets under contract. The remuneration of the depository bank may not exceed the usual services.

(3) upon request, the depositary bank shall provide the Commission with all information in its possession in connection with the performance of their duties.

(4) where a collective investment scheme originating in the Republic of Bulgaria has concluded the contract with the management company originating in another Member State, the depository bank shall conclude a written agreement with the management company, with the information necessary for the performance of its functions under this Act and its implementing acts. The contents of the written agreement between the depositary bank and the management company shall be determined by Decree.

Art. 37. (1) the depositary Bank shall be responsible to the management company and the unit-holders of the collective investment scheme for all damages suffered by them as a result of non-compliance, including by incomplete, inaccurate and non-timely implementation, when it is due to reasons for which the Bank is responsible.

(2) holders of shares can seek the responsibility of the depository bank directly or indirectly through the management company depending on the nature of the relationship between the depository bank, the management company and the unit-holders.

Chapter six

OBLIGATIONS RELATED TO THE INVESTMENT POLICY OF THE COLLECTIVE INVESTMENT SCHEME

Art. 38. (1) the investment of collective investment schemes may only consist of:

1. transferable securities and money market instruments admitted to or dealt in on a regulated market referred to in art. 73 of the law on markets in financial instruments;

2. transferable securities and money market instruments traded on a regulated market, different from that under art. 73 of the law on markets in financial instruments, in the Republic of Bulgaria or other EU Member State, operating regularly, recognized and open to the public, as well as securities and money market instruments issued by the Republic of Bulgaria or other EU Member State;

3. the transferable securities and money market instruments admitted to trading on the official market of the stock exchange or traded on another regulated market in a third country, operating regularly, recognized and open to the public, which are included in the list approved by the Vice-President, or are laid down in the statutes, respectively in the rules of the collective investment scheme;

4. the recently issued transferable securities, whose feed included a commitment to she wants admission, and within not more than one year from their issue, be admitted to trading on the official market of the stock exchange or on another regulated market, operating regularly, recognized and open to the public, which are included in the list approved by the Vice-President or are laid down in the statutes, respectively in the rules of the collective investment scheme;

5. shares of collective investment schemes and/or other collective investment undertakings which fulfil the conditions of art. 4, al. 1, regardless of whether they are based in a Member State, provided that:

(a)) other collective investment undertakings subject to the following conditions:

AA) received are authorised by law, according to which the supervision is carried out on them, which the President considered the equivalent of supervision according to the law of the European Union, and cooperation between supervisory authorities is sufficiently ensured;

BB) the level of protection of the holders of shares in them, including rules for asset allocation, usage and provision of loans of transferable securities and money market instruments, as well as for the sale of securities and money market instruments, which are collective investment undertakings do not possess, are equivalent to the rules and the protection of the holders of shares of collective investment schemes;


CC) reveal information by periodically prepare and publish annual and six-monthly reports to allow for the assessment of assets, liabilities, income and operations over the reporting period, and

 (b)) not more than 10 per cent of the assets of the collective investment schemes or other collective investment undertakings, the acquisition is expected to be made, may, under the founding their acts or their rules to be invested in shares of the other collective investment schemes or in other undertakings for collective investment;

6. deposits at credit institutions, payable on demand, or for which there is a right to be downloaded at any time, and date to maturity not more than 12 months; credit institutions in a third country must comply with the rules and are subject to supervision, which the President considers equivalent to those under the law of the European Union;

7. financial derivative instruments, including equivalent instruments, obligations which may be satisfied by cash payment, traded on regulated markets under item 1 – 3;

8. derivative financial instruments traded on OTC markets, provided that:

a) underlying assets are instruments under para. 1, financial indices, interest rates, currency exchange rates, or in which the collective investment scheme may invest according to its investment policy laid down in the statutes, respectively in the rules;

(b)) the opposing party to the transaction with these derivative financial instruments is an institution – subject to prudential supervision, and complies with the requirements approved by the Vice-President;

in) are subject to reliable and verifiable valuation daily and at any time on the initiative of the collective investment scheme can be sold, liquidated or closed by means of offset transaction at fair value;

9. money market instruments other than those traded on a regulated market referred to in § 1, item 6 of the supplementary provisions, if the issue or issuer of such instruments is carried out supervision in order to protect investors or savings and meet the following conditions:

a) issued or guaranteed are central, regional or local authorities in the Republic of Bulgaria or in another Member State, by the Bulgarian National Bank, the Central Bank of another Member State, by the European Central Bank, the European Union or the European Investment Bank, from the third country concerned and, in the case of a federal State – by one of the members of the Federal State, by a public international organization in which at least one Member State is a Member;

(b)) are issued by an issuer whose feed securities are dealt in on a regulated market referred to in item 1-3;

in) are issued or guaranteed by a person on prudential supervision is carried out in accordance with the criteria laid down by the law of the European Union, or by a person who is subject to and complies with rules adopted by the relevant competent authority that are at least as stringent as the requirements laid down by the law of the European Union;

d) are issued by issuers, other than those referred to in letters "a", "b" and "c", meeting the criteria, approved by the Vice-President to ensure that:

AA) investments in these tools are the subject of investor protection equivalent to the protection of which shall be subject to investment in letters "a", "b" and "c";

BB) the issuer is a company whose capital and reserves are at a rate not less than the equivalent in LEVs of 10 0000 0000 euro, which presents and publishes annual financial statements in accordance with the Fourth Council directive of 25 July 1978 on the grounds of art. 54, § 2, letter (g) of the Treaty on the annual accounts of certain types of companies (78/660/EEC) or with Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards, and is a person who financed a group of companies, involving one or more companies admitted to trading on a regulated market or a person who finances the securitisation companies, benefiting from a banking liquidity line.

(2) the Collective investment schemes may not invest in transferable securities and money market instruments other than those referred to in paragraph 1. 1 more than 10% of their assets.

(3) collective investment schemes may not acquire valuable (precious) metals and certificates on them.

(4) the Collective investment schemes may hold ancillary liquid assets, the requirements for which are laid down in the Ordinance.

Art. 39. Additional requirements for the conditions to be satisfied by the securities, money market instruments and other assets under art. 38, shall be determined by Decree.

Art. 40. (1) a management company adopt and apply risk management policies with the aim of continuous monitoring, control and evaluation at any time the risk of each position and its impact on the overall risk profile of the portfolio of each ruled by him collective investment scheme.

(2) where a collective investment scheme invests in derivative financial instruments, it applies rules for accurate and independent assessment of the value of OTC derivatives.


Art. 41. The management company shall submit to the Commission periodically information on the types of derivative financial tools in which to invest, on the main risks associated with the underlying instruments, the quantitative limits and the methods of evaluation of the risks associated with transactions in derivative instruments, for each managed collective investment scheme.

Art. 42. (1) the collective investment scheme may apply the techniques and instruments relating to transferable securities and money market instruments for the purpose of efficient portfolio management of investments, if this is provided for in the Statute, respectively in the rules of the collective investment scheme, as well as in the prospectus. The types of techniques and tools, as well as the conditions of use shall be determined by Decree.

(2) If the techniques and instruments referred to in paragraph 1 lead to the use of derivative instruments in respect of the use conditions and restrictions apply under this law and its implementing acts.

(3) the use of techniques and instruments of al. 1 may not lead to a change in the investment objectives and restrictions or to the elevation of the risk profile of the collective investment schemes referred to in the instruments setting up those acts or rules, prospectuses, approved by the Commission.

(4) the techniques and instruments referred to in paragraph 1 shall not be construed as transferable securities.

Art. 43. (1) the total exposure value of the collective investment scheme associated with derivative financial instruments, may not be greater than the net asset value.

(2) the collective investment scheme may invest in financial derivative instruments, if this is explicitly provided for in the investment policy, in compliance with the requirements of art. 45, para. 8 – 10 and provided that the exposure to the underlying assets does not exceed in total the investment restrictions under art. 45.

(3) where a collective investment scheme invests in derivative financial instruments, based on indexes, these tools are combined for the purposes of investment restrictions under art. 45.

(4) where transferable securities or money market instruments contain an embedded derivative instrument, exposure of the collective investment scheme to this derivative instrument is taken into account in the calculation of the total exposure under para. 1. (5) Exposure in financial derivative instruments are calculated taking into account the current value of the underlying assets, the risk of the other party to the transaction with derivative financial instrument, future fluctuations of the market, as well as the required period of time for the closing of the position.

Art. 44. the criteria for assessment of the adequacy of the risk management process under art. 40, para. 1 used by the investment company, as well as by the management company on any managed collective investment scheme, detailed rules for accurate and independent assessment of the value of OTC derivative instruments, the detailed rules and deadlines for submission to the Commission on the content of the information referred to in art. 41, the procedure for the provision of such information to the Commission by the management company, as well as additional requirements to the content of the risk management rules shall be determined by Decree.

Art. 45. (1) the collective investment scheme may not invest more than 5 per cent of its assets in transferable securities or money market instruments issued by one person.

(2) the collective investment scheme may not invest more than 20 percent of its assets in deposits in a person under art. 38, para. 1, item 6.

(3) the risk exposure to the collective investment scheme to the opposing party to deal with izv″nborsovo traded derivative financial instruments may not exceed either of the following thresholds:

1. ten per cent of the assets when the counterparty is a credit institution referred to in art. 38, para. 1, item 6, or

2. five per cent of its assets, in other cases.

(4) the collective investment scheme may invest up to 10 percent of its assets in transferable securities or money market instruments issued by one person only on condition that the total value of investment in individuals, in each of which it invests more than 5% of its assets does not exceed 40 per cent of the assets of the collective investment scheme. The limit in the first sentence shall not apply to bank deposits in credit institutions subject to prudential supervision is carried out, as well as to transactions with derivative financial instruments traded izv″nborsovo with these institutions.

(5) in addition to the limitations under para. 1-3 the total value of the investments of the collective investment scheme in transferable securities or money market instruments issued by one person, that person, if deposit insurance as well as exposure to the same person, resulting in izv″nborsovo traded derivative financial instruments, may not exceed 20 per cent of its assets.

(6) the collective investment scheme may invest up to 35 percent of its assets in transferable securities and money market instruments issued by the same person, if the Securities and money market instruments are issued or guaranteed by the Republic of Bulgaria, of another Member State, by regional or local authorities, by a non-Member State or by a public international organization of which he is a member at least one Member State.


(7) the transferable securities and money market instruments referred to in paragraph 1. 6 shall not be taken into account for the purposes of the limit referred to in paragraph 4. (8) investment restrictions under para. 1 – 6 cannot be combined. The total value of the investments of the collective investment scheme in transferable securities or money market instruments issued by one person, that person, if deposit insurance as well as exposure to the same person, arising from transactions in financial derivative instruments pursuant to para. 1 – 6 may not exceed 35 per cent of its assets.

(9) the companies referred to one group for the purposes of drawing up the consolidated financial statement in accordance with recognised accounting standards, be regarded as a person in the application of the restrictions under para. 1-8.

(10) the total value of investments in transferable securities or money market instruments issued by companies in a group may not exceed 20 per cent of the value of the assets of the collective investment scheme.

Art. 46. (1) in addition to the restrictions provided for in art. 49, collective investment scheme may invest in shares or debt securities issued by the same person, amounting to 20 percent of their assets, if, under the Statute, according to the rules of the collective investment scheme investment policy provides for the reproduction of the composition of the index of shares or bonds, recognized as acceptable by the Vice-President in accordance with the following criteria: 1. the composition of the index is sufficiently diversified;

2. the index represents an adequate benchmark for the market to which it relates, and

3. is published in an appropriate manner.

(2) additional requirements for the composition of the index, benčmarka and publication of information about the index shall be determined by Decree.

Art. 47. (1) subject to the principle of risk distribution collective investment scheme may exceed the limit in accordance with art. 45, para. 6 and to invest up to 100 percent of its assets in transferable securities and money market instruments issued or guaranteed by the Republic of Bulgaria or other EU Member State, of one or more regional or local authorities, by third countries or international organisations in the public, that one or more Member States are members, only on condition that in the opinion of the Deputy Chairman of the newly authorised collective investment scheme enjoy protection of their rights equivalent to that holders of shares of collective investment scheme satisfying the restrictions under art. 45. (2) the collective investment scheme should provide for this possibility in the statutes, rules, respectively, indicating the full Member States, regional or local authorities or public international bodies issuing or guaranteeing securities and money market instruments in which it intends to invest more than 35 percent of their assets.

(3) the information referred to in para. 2 must be contained in the prospectus, the key investor information and in all marketing materials.

(4) in the cases referred to in para. 1 the collective investment scheme must hold securities from at least six separate feeds, as the value of the investment in each of them may not exceed 30 per cent of its assets.

Art. 48. (1) the collective investment scheme may invest no more than 10 percent of their assets in the units of the same collective investment undertaking under art. 38, para. 1, item 5, regardless of whether it is based in a Member State or not.

(2) the total amount of investment in shares of collective investment undertakings other than the collective investment scheme may not exceed 30 per cent of the assets of the collective investment scheme.

(3) where a collective investment scheme invests in the units of other collective investment schemes or collective investment undertakings managed directly or by delegation by the management company or her by any other company with which the management company is linked by her common management or control, or by a substantial direct or indirect holding, her management company or other company may not collect fees in the sale and redemption of the units of the collective investment scheme.

(4) the collective investment scheme investing a significant portion of its assets in other collective investment schemes or in other collective investment undertakings shall disclose in its prospectus the maximum amount of management fees, which may be collected by both the collective investment scheme and other collective investment schemes or collective investment undertakings in which it intends to invest. Information on the maximum percentage of accrued charges in the first sentence of the investiraŝata collective investment scheme and other businesses in which it invests, is provided in its annual financial statement.

Art. 49. (1) a management company acting on behalf of all of it managed collective investment schemes or other collective investment undertakings, may not acquire shares carrying voting rights which would enable it to exercise significant influence over the management of the issuer.

(2) a collective investment scheme may not acquire more than:

1. ten percent of the shares without voting rights issued by one person;

2. ten percent of the bonds or other debt securities issued by one person;


3. twenty-five per cent of the units of the same collective investment scheme or other collective investment undertaking which meets the requirements of art. 4, al. 1;

4. ten percent of the money market instruments issued by one person.

(3) Limitations under para. 2, item 2, 3 and 4 shall not apply where, at the time of acquisition of these instruments the collective investment scheme may not calculate the gross amount of the debt securities, money market instruments, or the net amount of the securities issued.

Art. 50. (1) the restrictions under this chapter shall not apply where the collective investment scheme shall exercise the rights arising from the transferable securities and money market instruments which form part of its assets.

(2) subject to the principle of risk distribution of collective investment schemes, recently received permission to carry out the activity, may decide not to apply art. 45 – 48, within 6 months of receipt of the authorization.

(3) in the case of mergers and takeovers of collective investment schemes, if host a collective investment scheme the Commission's competent authority, this collective investment scheme may not apply restrictions under art. 45 – 48, does not deviate significantly from them up to 6 months from the date of registration of the merger or takeover in the relevant register.

Art. 51. in violation of investment restrictions under this chapter for reasons beyond the control of the collective investment scheme or as a result of the exercise of subscription rights it anteriorly, but not later than two months from the occurrence of the offence, through deals to sell power assets in accordance with the investment restrictions, taking into account the interests of the holders of the shares.

Art. 52. in the cases under art. 51 the collective investment scheme is required within 7 days of infringement to inform the Commission, giving details of the reasons for its occurrence and the measures taken for its removal.

Chapter seven

OBLIGATIONS TO PROVIDE INFORMATION TO INVESTORS

Art. 53. (1) the public offering of shares of collective investment scheme is permitted, if the prospectus to be published in the manner and with the content set out in this Act and its implementing acts.

(2) the prospectus may be published only if the Commission has granted a license for carrying out the activity as an investment company, c″otvetno authorization to organize and manage a mutual fund.

Art. 54. (1) the prospectus shall contain the information needed by investors for making informed assessment of the proposed investment, including the risks associated with it. The prospectus contains information about the risk profile of the collective investment scheme, presented in a clear and easy to understand way, regardless of the tools.

(2) the prospectus contains information about the categories of assets in which the collective investment scheme may invest, including:

1. If there is a right to carry out transactions in financial derivative instruments according to the Statute, respectively, the rules of collective investment scheme; whether these transactions may be carried out for the purpose of hedging or with the aim of achieving the investment objectives of the collective investment scheme;

2. the possible consequences of the use of financial derivative instruments on the risk profile of the collective investment scheme.

(3) where a collective investment scheme invests mainly in the categories of assets other than transferable securities or money market instruments, or reproduce an index composed of shares or debt securities in accordance with art. 46, prospectus and marketing messages include explicit mention of that fact in a way, attracting the attention of the investor.

(4) if the net asset value of the collective investment scheme may be subject to fluctuations because of the composition or the portfolio management techniques, the prospectus and marketing messages include explicit mention of that fact in a way, attracting the attention of the investor.

(5) the management company at the request of investors and provides additional information about the quantitative restrictions applicable to the risk management of the collective investment scheme for the selected methods for compliance with these restrictions and the recent changes in the risks and profitability of the main instrument categories.

(6) the minimum requirements for the content of the prospectus shall be determined by Decree.

Art. 55. the statutes, respectively, the rules of the collective investment scheme are non-sectoral part of the prospectus and shall apply to it. They do not apply to the prospectus in the event that the investor is provided information about the place where the same are available in each Member State, where the units of the collective investment scheme are available on request or can be sent to them.

Art. 56. (1) at each change of the essential details included in the prospectus of collective investment scheme within 14 days from the occurrence of the change the prospectus is updated and submitted to the Commission.

(2) in establishing the gaps and inconsistencies in the updated prospectus Vice President sends a message and set a time limit for their removal. Article 196, para. 3 shall apply accordingly.

Art. 57. (1) a prospectus of collective investment scheme applies document with key information to investors.


(2) key information for investors presents the main features of the relevant collective investment scheme so that investors can understand the nature and risks of the investment product that offers them, and, consequently, to take investment decisions on the basis of the information.

(3) key information for investors includes the following essential elements:

1. data for collective investment scheme;

2. a brief description of the investment objectives and investment policy of the collective investment scheme;

3. the historical presentation of the results of operations or predictions about the expected results of the activity, where applicable;

4. costs and charges;

5. risk profile and investment return, including warnings regarding the risks associated with investments in relevant collective investment scheme.

(4) the document with key information for investors is in form and content in accordance with Regulation (EC) no 583/2010 of 1 July 2010 implementing directive 2009/65/EC of the European Parliament and of the Council as regards the key information for investors and the conditions that must be met in providing key information for investors or the prospectus by a durable medium other than paper or website (OJ L176/1 of 10 July 2010), hereinafter referred to as "Commission Regulation (EU) no 583/2010".

(5) key information for investors clearly sets out where and how to obtain further information on the proposed investment, including the location and time of receipt upon request of the prospectus, the annual and six-monthly reports, as well as the language in which this information is made available to investors.

(6) key information for investors should be presented briefly and without the use of specialized terminology. The document with key information to investors shall be drawn up in a common format, which allows for comparisons, and presented in a way understandable to retail investors without the need to use other reference documents.

(7) key information for investors is used without changes or additions in all Member States in which the collective investment scheme offers the shares.

(8) key information for investors constitutes pre-contractual information that is accurate, clear and not misleading and corresponds with the relevant parts of the prospectus.

(9) the key investor information should contain a clear warning that only on the basis of her civil liability may arise, unless the information is misleading, incorrect or contrary to the relevant parts of the prospectus.

Art. 58. (1) the document with key information for investors is updated immediately when any change of the essential elements and made available to the Commission and to the investors.

(2) the Current version of the document with key information to investors shall be published on the website of the asset management and investment company.

Art. 59. (1) the management company accordingly, the collective investment scheme, and any other person, to which has been delegated functions and actions by the procedure of art. When 106 offers units of a collective investment scheme, provide free document with key information for investors of any person recorded titles, in good time before conclusion of the transaction.

(2) when the management company accordingly, the collective investment scheme does not offer shares of collective investment scheme directly or through another person, to which has been delegated functions and actions by the procedure of art. 106 accordingly, the management company, the collective investment scheme must provide, upon request, key information for investors to persons who offer a product that is based on an investment in the units of the collective investment scheme or consult investors in connection with such product.

(3) persons who offer a product that is based on an investment in the units of the collective investment scheme or consult investors in connection with such product, provide key information for investors of their customers.

Art. 60. (1) the investment company and the management company of the Fund are required to submit to the Commission:

1. an annual report within 90 days of the completion of the financial year;

2. the half-yearly report covering the first six months of the financial year, within 30 days of the end of the reporting period;

3. other information, determined by Decree.

(2) the requirements concerning the content of the reports and information referred to in para. 1, the order, the terms and the way for its submission to the Commission, as well as on its public distribution shall be determined by Decree.

(3) the Commission shall publish the reports received under paragraph 1. 1, item 1 and 2 through its it registered under art. 30, para. 1 of the Act on the financial supervision Commission.

(4) the annual financial statement of the collective investment scheme shall be certified by a registered auditor.

(5) the results of the work carried out by the auditor's examination of the annual financial statement shall be reflected in a separate report, which is part of the annual financial statement.


Art. 61. (1) the Auditor involved in the carrying out of statutory audits in a collective investment scheme or in another undertaking, cooperating for the carrying out of the activities of the scheme, shall forthwith inform the Commission of any fact or decision in connection with the collective investment scheme or enterprise, became known at the time of the audit, which can lead to:

1. a material breach of the laws, regulations or administrative provisions governing requirements for authorisation to carry out the activity, the pursuit of the activities of the collective investment scheme or enterprise, cooperating to carry out the activity;

2. prevent the continuous functioning of the activities of the collective investment scheme or enterprise, cooperating to perform business activity;

3. Disclaimer of endorsement of the financial statements or the expression of reservations.

(2) the auditor under para. 1 is required to inform the Commission of any fact or decision became known at the time of the audit, which could result in consequences under para. 1, item 1, an undertaking which involves a person by means of a control with a collective investment scheme or enterprise, cooperating to perform its activities.

(3) in the cases referred to in para. 1 and 2 shall not apply restrictions on disclosure of information provided by the law, by-law or a contract.

Art. 62. The management company shall be obliged upon request of the investor to provide a free prospectus, the key investor information and the latest published annual and six-monthly statement of it managed by a collective investment scheme.

Art. 63. (1) a prospectus and the document with key information is provided to investors of durable medium or on the website of the asset management and investment company. At the request of investors management company provides them with free paper copy of them.

(2) upon provision of the prospectus and the key investor information of durable medium other than paper or on a website must be fulfilled the conditions under art. 38 of Regulation (EC) no 583/2010.

(3) the annual and six-monthly reports are provided to investors in the manner set out in the prospectus and in the document with key information to investors. At the request of investors is provided free of charge with a copy of the paper.

Art. 64. The management company of collective investment scheme announced in the Commission and published in an appropriate manner, as determined in the prospectus the issue value and the redemption of its shares for each determination, as well as a summary of them at least twice a month with the format and content laid down by Ordinance.

Art. 65. (1) all marketing messages to investors must be clearly marked as such, to be precise, clear and not misleading. Each marketing message, including an invitation to purchase the units of the collective investment scheme may not contain false or misleading information, as well as one that is contrary to the information contained in the prospectus and in the document with key information.

(2) all marketing communications in connection with the offering of shares of collective investment scheme include:

1. information on the place, time, manner and the language in which the prospectus can be obtained and the document with key information or where they are publicly available;

2. the information that the value of units and the income from them can go down as well as up, profits are not guaranteed and there is a risk for investors not to recover the full amount of money invested.

(3) other information and additional requirements for marketing communications shall be determined by Decree.

Art. 66. the Commission may request a collective investment scheme originating in another Member State and which has a management contract with management company originating in the Republic of Bulgaria prospectuses and any amendments thereto, as well as the annual and the 6-month report of the collective investment scheme.

Chapter eight

STRUCTURES OF MAIN POWER SUPPLY TYPE – COLLECTIVE INVESTMENT SCHEME

Section I

Scope and approval

Art. 67. (1) the Feed a collective investment scheme is a collective investment scheme, which was authorised by the Commission to invest, without having to comply with the provisions of art. 4, paragraph 1, item 1, art. 38, 45, 48 and article. 49, para. 2, item 3, at least 85 percent of their assets in the units of other collective investment scheme or its investment podfond, hereinafter referred to as "general collective investment scheme".

(2) Supply a collective investment scheme can hold up to 15 percent of its assets in one or more of the following assets: 1. ancillary liquid assets under art. 38, para. (4);

2. financial derivative instruments which may be used only for the purpose of hedging the risk and shall comply with the conditions under art. 38, para. 1, item 7 and 8, art. 42 and 43.


(3) in order to ensure that the total exposure relating to derivative instruments, in which the collective investment scheme has invested funds does not exceed the total net value of its portfolio in accordance with art. 43, a collective investment scheme the supply calculated its common risk exposure, combining his own direct risk exposure pursuant to para. 2, item 1 with the actual risk exposure to derivative financial instruments the main collective investment scheme in proportion to the size of its investment in the main collective investment scheme or with a maximum total exposure on the main collective investment scheme to derivative financial instruments provided for in the statutes, rules, respectively, in proportion to the size of its investment in the main collective investment scheme.

Art. 68. (1) the Main collective investment scheme is a collective investment scheme or its investment podfond, which at the same time: 1. has at least one feed a collective investment scheme among the holders of its shares;

2. the power supply does not constitute collective investment scheme;

3. does not own shares of power collective investment scheme.

(2) for the collective investment scheme is subject to the following exceptions: 1. If the collective investment scheme has at least two power collective investment schemes, holding its shares, the provisions of art. 4, al. 1, item 1 and art. 11 item 1 regarding the raising of funds through public offering shall not apply, as shall be given the opportunity to lead a collective investment scheme to choose whether to attract capital from other investors;

2. when the main collective investment scheme does not attract capital to the public in another Member State, but there are one or more power collective investment schemes originating in another Member State, section II of chapter thirteen does not apply.

Art. 69. (1) the Commission shall approve the investment power of a collective investment scheme in the main collective investment scheme originating in the Republic of Bulgaria or other EU Member State in the production of art. 12. In the case of conversion under art. 79 of the collective investment scheme in the power supply the Commission in advance approved investment of collective investment scheme in the main collective investment scheme originating in the Republic of Bulgaria or other EU Member State.

(2) the Commission shall inform the supplying collective investment scheme within 15 working days of the presentation of the full set of documents if its investment in al. 1, the second sentence in the main collective investment scheme is approved or not.

(3) for approval under subsection. 1 feed a collective investment scheme shall submit to the Commission: 1. the rules or instruments of incorporation of the feed and the main collective investment scheme;

2. the prospectus and the key investor information on the supply and on the main collective investment scheme;

3. the agreement between the supply and the main collective investment scheme or the internal rules for the carrying out of activities under art. 71, para. 3;

4. where applicable, the information referred to in art. 79 reserved for holders of the shares;

5. the agreement on the exchange of information between the depositaries of the feed and the main collective investment scheme in cases where they are different, according to art. 75;

6. the agreement on the exchange of information among Auditors of the feed and the main collective investment scheme in cases where they are different, according to art. 77.

(4) the Commission issued approval if the feed a collective investment scheme, the depository bank, its auditor, as well as the main collective investment scheme meet the requirements of this chapter, and when the main collective investment scheme originating in another Member State – where those persons comply with the requirements of section VIII of Directive 2009/65/EC.

(5) where the main collective investment scheme originating in another Member State, supply a collective investment scheme provides the Commission with an attestation by the competent authority of the Member State of origin of the main collective investment scheme that her podfond or the relevant investment are main collective investiciona scheme.

(6) the documents referred to in para. 5 shall be provided by the feed a collective investment scheme of the Bulgarian language.

Art. 70. at the request of feed a collective investment scheme originating in another Member State intending to invest in major collective investment scheme originating in the Republic of Bulgaria, the Commission shall draw up a certificate to the competent authority of the Member State of origin of the feed a collective investment scheme, the main collective investment scheme satisfies the conditions under art. 68, para. 1, 2 and 3.

Section Ii

General provisions

Art. 71. (1) the main collective investment scheme provides a collective investment scheme supplying all documents and information necessary to feed a collective investment scheme for the implementation of the requirements laid down in this law or its implementing acts. The provision of information shall be carried out in accordance with the agreement between the supply and the main collective investment scheme.


(2) a collective investment scheme the supply does not have the right to invest beyond the limit under art. 48, para. 1 in the shares of the main collective investment scheme before the entry into force of this agreement under paragraph 1. 1. Upon request, the agreement is provided free of charge to the Bulgarian language of all the holders of shares.

(3) in cases where the main collective investment scheme and are managed by the same management company, the agreement referred to in para. 1 may be replaced by internal rules for carrying out the activity to ensure compliance with the requirements of para. 1. (4) the content of the agreement referred to in para. 1, according to the internal rules referred to in paragraph 1. 3 shall be determined by Decree.

Art. 72. (1) in order to prevent the possibility of pricing arbitrage and avoiding the application of strategies with the choice of the moment in terms of market shares and feed the main collective investment scheme shall take appropriate measures for the coordination of the timing of the calculation of the net value of the assets owned by them and for its publication.

(2) the feed a collective investment scheme may, notwithstanding the provisions of art. 21 and 22, to stop issuing or redemption of their shares for the same period of time for which the main collective investment scheme is temporarily stopped the issuance or redemption of its units.

Art. 73. (1) the feed a collective investment scheme is liquidated in the event of liquidation of the main collective investment scheme unless the Commission approved investment of at least 85 per cent of the assets of the collective investment scheme delivery in shares of another major collective investment scheme or an amendment of the Statute of the feed a collective investment scheme, according to its rules, it can be transformed into a collective investment scheme other than the power supply.

(2) the main collective investment scheme may be eradicated not earlier than three months after the notification of the decision on the liquidation of all their holders of titles, and if the feed is a collective investment scheme originating in another Member State and the competent authorities of the Member State of origin of the feed a collective investment scheme.

(3) additional requirements to the procedure under paragraph 1. 1 shall be determined by Decree.

Art. 74. (1) upon conversion of the collective investment scheme feed a collective investment scheme is liquidated, unless the Commission issued one of the following approved power collective investment scheme: 1. continue to be a collective investment scheme of power supply the main collective investment scheme or other collective investment scheme arising as a result of the conversion of the main collective investment scheme;

2. to invest at least 85 percent of its assets in shares of other major collective investment scheme, which has not occurred as a result of the conversion;

3. to change its Charter, according to rules can be converted into a collective investment scheme, other than supply a collective investment scheme.

(2) the conversion shall take effect, if the collective investment scheme has not supplied all of its holders of shares and to the competent authorities of the Member States of origin supplying her collective investment schemes the information referred to in art. 151 or comparable to it. The information referred to in the first subparagraph shall be provided no later than 60 days before the date on which the conversion takes effect.

(3) if the Commission has not issued the approval under paragraph 1. 1, item 1, the primary collective investment scheme is required upon request to repurchase or redeem all shares of collective investment scheme delivery prior to the date on which the conversion takes effect.

(4) additional requirements to the procedure under paragraph 1. 1 shall be determined by Decree.

Section Iii

Banks, custodians and Auditors

Art. 75. (1) where the feed and main collective investment scheme have different custodians banks they need to conclude an agreement for the exchange of information to ensure the performance of their duties. The content of the agreement shall be fixed by Decree.

(2) a collective investment scheme the supply cannot invest in the shares of the main collective investment scheme until the entry into force of this agreement under paragraph 1. 1. (3) For the main banks and depositories of a collective investment scheme, complying with the provisions laid down in this section, it shall be deemed not to violate rules limiting the disclosure of information or data protection, where provided for in the contract, or other law. Compliance with the provisions of this section shall not give rise to liability for the depository bank or another person acting on behalf of the Commission.

(4) Feed a collective investment scheme, according to her management company is responsible for the provision of the depository bank of any information relating to the main collective investment scheme, which is necessary for the full implementation of the obligations of the depositary bank.


Art. 76. The depository bank of the collective investment scheme shall immediately inform the Commission, supply a collective investment scheme, according to her management company and the depository bank of the feed a collective investment scheme, about its irregularities with respect to the main collective investment scheme, which believes that exert a negative impact on the feed a collective investment scheme.

Art. 77. (1) where the feed and main collective investment scheme have different registered Auditors, those auditors need to conclude an agreement for the exchange of information, to ensure the implementation of its obligations, including measures to fulfil the requirements of para. 3 and 4. The content of the agreement shall be fixed by Decree.

(2) a collective investment scheme the supply cannot invest in the shares of the main collective investment scheme until the entry into force of this agreement under paragraph 1. 1. (3) in the audit report, the auditor of the feed a collective investment scheme must take into account the audit report on the main collective investment scheme. When the fiscal year for a collective investment scheme the feed ends at different times of the financial year for the collective investment scheme, the auditor of the main collective investment scheme shall draw up a report to the date of clearance of the feed a collective investment scheme.

(4) the auditor of a collective investment scheme the supply includes in his report information on the identified in the audit report on the main collective investment scheme for the irregularities and their influence on the activity of feed a collective investment scheme.

(5) When the Auditors of main and feed a collective investment scheme comply with the requirements of this section, it is assumed that they do not violate the rules, limiting disclosure of information or rules relating to the protection of the data where such are contained in the contract or in another law. In compliance with this section shall not apply restrictions on the disclosure of information referred to in another Act, the by-law or a contract.

Section Iv

Providing information and marketing messages

Art. 78. (1) in addition to the information referred to in art. 54 the prospectus of a collective investment scheme the supply includes: 1. information that the collective investment scheme is a feed for a particular major collective investment scheme and as such permanently invests 85 percent or more of their assets in shares of this leading collective investment scheme;

2. investment objective and policy, including information on the risk profile, as well as whether the profitability of power and of the main collective investment scheme are identical, or if not, to what extent and for what reasons, including a description of the investment under art. 67, para. (2);

3. a brief description of the main collective investment scheme, its organizational structure, investment objective and policy and risk profile, including information about how to obtain the prospectus;

4. brief description of the agreement between the supply and the main collective investment scheme or of the internal rules for the carrying out of activities under art. 71, para. 3;

5. way of obtaining additional information from the holders of the shares of the main collective investment scheme and the agreement between the supply and the main collective investment scheme or of the internal rules for the carrying out of activities under art. 71, para. 3;

6. Description of all fees or reimbursable expenses, paid for by supplying a collective investment scheme in connection with its investment in the main collective investment scheme, as well as the total amount of the fees of the feed and the main collective investment scheme;

7. a description of the applicable tax legislation relative to feed a collective investment scheme in connection with its investment in the main collective investment scheme.

(2) in addition to the contents specified in accordance with art. 60, para. 2, the annual report of the feed includes a collective investment scheme and a statement of the total cost of supply and the main collective investment scheme. In the annual report and a 6-month supply of a collective investment scheme sets out how can be obtained and 6-month-old statement of the main collective investment scheme.

(3) Feed a collective investment scheme in addition to the information submitted to the Commission under art. 56, para. 1, art. 58, para. 2 and art. 60, para. 1 the prospectus and the key investor information and any amendment thereto, and the annual 6-month statement of the main collective investment scheme when it is originating in another Member State.

(4) a collective investment scheme the supply must always be disclosed in each marketing message that constantly invest 85 percent or more of their assets in shares of the main collective investment scheme.

(5) Supply a collective investment scheme provides to investors upon request free of charge in hard copy of the prospectus and annual 6-month statement of the main collective investment scheme.

Section V

Conversion of a collective investment scheme in the power collective investment scheme and return to the main collective investment scheme


Art. 79. (1) where a collective investment scheme intends to commence shall act as feeding a collective investment scheme, as well as in the event that feeds the collective investment scheme intends to replace the main collective scheme in which is invested, it must submit to the holders of shares are: 1. the information that the Commission has approved the investment power of a collective investment scheme in titles of the main collective investment scheme;

2. the document with key information to investors under art. 57 of the feed and the main collective investment scheme;

3. the date on which the feed a collective investment scheme started investing in the main collective investment scheme, or if it has already invested in it, the date on which its investment will exceed the limit under art. 48, para. 1;

4. the information that the holders of shares have the right to request, within 30 days from the time of providing the information, the redemption of the shares owned by them without any other charges besides the due of the collective investment scheme for the redemption.

(2) the information referred to in para. 1 shall be provided at least 30 days before the date referred to in para. 1, item 3.

Art. 80. (1) where a feed is a collective investment scheme filed a notification to the Commission under art. 136, the information under art. 79 shall be submitted to the Bulgarian language. Feed a collective investment scheme is responsible for making the translation that should accurately reflect the full content of the original.

(2) a collective investment scheme the supply does not have the right to invest in shares of a major collective investment scheme in violation of art. 48, para. 1 before the expiry of the time limit under art. 79, para. 2.

Section VI

Obligations and competent authorities

Art. 81. (1) a collective investment scheme Delivery monitor effectively the activities of the main collective investment scheme. In the performance of this obligation the feed a collective investment scheme may use information and documents obtained from the investment scheme, its management company, depositary bank and Auditor, unless there is reason for doubt about the accuracy and veracity.

(2) where, in connection with an investment in the shares of the main collective investment scheme has received the fee, Commission or other monetary benefit from the feed a collective investment scheme, its management company or by any other person acting in the name and for the account of the feed a collective investment scheme or her management company, the fee, Commission or other monetary benefit shall be paid to the assets of the collective investment scheme supply.

Art. 82. (1) where the main collective investment scheme is originating in the Republic of Bulgaria, it shall immediately inform the Commission of any collective investment scheme feed originating from another Member State, investing in its shares.

(2) in the cases referred to in para. 1, the Commission shall immediately inform the competent authorities of the Member State of origin of the feed a collective investment scheme.

Art. 83. (1) the main collective investment scheme does not charge fees to feed a collective investment scheme for the issuance or redemption of their shares.

(2) the main collective investment scheme provides timely access to feed a collective investment scheme or its management company, of the Commission or the competent authority when the feed is a collective investment scheme originating in another Member State, of the depository bank and the auditor of a collective investment scheme to supply all the information required in accordance with the applicable legislation, the Fund rules or instruments of incorporation.

Art. 84. (1) where the feed a collective investment scheme and the main collective investment scheme are originating in the Republic of Bulgaria, the Commission shall without delay inform the feed a collective investment scheme or its management company for any decision, measure, found inconsistent or non-compliance with the requirements of this chapter and of any information received under art. 61, para. 1 and 2 in respect of the main collective investment scheme, its management company, depositary or auditor Bank.

(2) in the cases referred to in para. 1, when the feed is a collective investment scheme originating in another Member State, the Commission shall inform the relevant competent authority.

Art. 85. When the feed is a collective investment scheme originating in the Republic of Bulgaria and the Commission received a notification by the competent authorities of the Member State of origin of the main collective investment scheme on decision, measure or a finding of contravention or non-compliance with the requirements of art. 58 – 67 of Directive 2009/65/EC or reported in accordance with art. 106 (1) of Directive 2009/65/EC, information in relation to the main collective investment scheme, its depositary bank, auditor or management company, the Commission shall immediately notify the delivery collective investment scheme for the incoming information.

SECOND PARTITION

MANAGEMENT COMPANY

Chapter nine

CONDITIONS FOR TAKING UP BUSINESS

Art. 86. (1) a management company is a joint-stock company with headquarters in the Republic of Bulgaria, authorised, under the conditions and in accordance with this law, whose main activity is the management of collective investment schemes, including:

1. investment management;


2. Administration of the shares, including legal services and accounting services relating to asset management, requests for information to investors, valuation of assets and calculating the price of the shares, control of compliance with legal requirements, keeping the book on the holders of shares, in the case of carrying out the activity in the management of collective investment scheme originating in another Member State, the distribution of dividends and other payments , issue, sale and redemption of shares, contracts, record keeping;

3. marketing services.

(2) a management company may provide the following additional services:

1. in accordance with the contract concluded with the client's portfolio, including the portfolio of a collective investment undertaking, involving financial instruments, in its sole discretion, without specific orders of the client;

2. investment advice concerning financial instruments;

3. the storage and administration of units of collective investment undertakings.

(3) a management company which provides services under para. 2 shall apply accordingly to art. 4, al. 2, art. 24, para. 1 – 3, 7 and 8, art. 27, al. 4-7, art. 28, 29, art. 32, para. 6, art. 33 and 34 of the law on markets in financial instruments.

(4) a licence under subsection. 1 may include the right to perform the services under para. 2. No License may be issued only for the provision of the services under para. 2, as well as for the provision of the services under para. 2, item 2 and 3 without the provision of the services is permitted under para. 2, item 1.

(5) a license Issued to a management company shall be valid for all Member States.

(6) a management company may not carry out activity other than the activity for which the licence has been granted under paragraph 1. 1 and 2.

(7) a management company may not offer units of a collective investment undertaking under part three in other Member States.

(8) the management company issued only cashless shares with one vote.

Art. 87. In the implementation of activities under art. 4, al. 1, related to the public offering of shares of collective investment schemes, as well as with their opposite, the management company is acting on behalf and for the account of managed collective investment scheme.

Art. 88. the Commission may issue a license for carrying out the business of management companies on the territory of the Republic of Bulgaria through a branch of a legal entity from a third country, provided that the person is entitled under national law to conduct such business and capital market supervisory authority in the country where the person is registered, oversee it on a consolidated basis. The person of a third country has the rights and obligations of local management company, in so far as the law does not provide otherwise.

Art. 89. In cases where a licence referred to in art. 86, para. 1 includes the right to perform the services under art. 86, para. 2, item 1 and the management company holds money and/or financial instruments on these clients and for this reason may arise from obligations to them, it is required to make cash contributions to the Fund for compensation under art. 77, para. 2 of the law on public offering of securities. The provisions of Chapter five, section IV of the law on public offering of Securities Act shall apply accordingly.

Art. 90. (1) a management company shall have initial capital of not less than the equivalent in LEVs of 125 000 euros.

(2) a management company shall be obliged at all times to maintain own funds exceeding or equal to the value in the Al. 1 and 3.

(3) If a management company manages the activities of collective investment schemes and other collective investment undertakings whose assets individually or in the aggregate exceed the equivalent in LEVs of 250 0000 0000 euro, it must increase the amount of own funds of not less than 0.02% of the amount being the difference between the value of assets on their balance sheet, and the equivalent in LEVs of 250 0000 0000 euro. The first sentence shall not apply where the capital of the management company reach the equivalent in LEVs of 10 0000 0000 euro.

(4) when calculating the total value of the assets of the collective investment schemes and other collective investment undertakings referred to in paragraph 1. 3 does not include assets management company manages the delegation.

(5) not less than 25 per cent of the capital of Pará. 1 must be available for filing the application for the issuing of a licence to carry on the business of management companies, and the rest – within 14 days of receipt of written notification from the Commission that would issue the license after proving the presence of the full amount of capital.

(6) Notwithstanding the requirement of paragraph 6. 2 the own funds of the management company shall at all times be at the rate of not less than one-quarter of its permanent general expenditure for the preceding financial year.

(7) in the event of a significant change in the volume of activity of the management company in the current year compared to the previous Deputy Chairman may adjust the value required under para. 1.

(8) For the management company, which is not carried on activities throughout the preceding financial year from the day of receipt of the license, the amount of own funds shall be determined on the basis of the estimated total cost of constant, set out in the programme of the activity, unless the President requested costs in the adjustment program for the activity.


(9) a management company shall determine the fixed overhead under para. 6 on the basis of annual accounts certified by a registered auditor.

(10) the management company is required to comply with the capital requirements and to maintain minimum liquidity laid down by Ordinance.

Art. 91. upon violation of the requirements for capital adequacy and liquidity, fixed by Ordinance, the management company is required to notify the Vice-President within 7 days of making the offence, giving the reasons for the breach and proposed concrete measures, as a result of that infringement to be eliminated within a month of completion.

Art. 92. (1) a management company is required to submit an annual report to the Commission within 90 days of the completion of the financial year, with content, as determined by Ordinance.

(2) a management company is required to submit to the Commission, by the 10th day of the month following the quarter balance sheet and profit and loss account on the last date of each quarter and the quarterly statement for capital adequacy and liquidity with content, as determined by Ordinance.

(3) in the identified gaps and inconsistencies with other requirements of the law, including with international financial reporting standards, admitted in the accounts for capital adequacy and liquidity, as well as in the financial statements, the accounting records and other documents, the President sends a message and set a time-limit within which the management company is required to remove them. Article 196, para. 3 shall apply accordingly.

Art. 93. (1) a person who has been selected as a member of the governing body of a management company, must: 1. possess a professional qualification necessary for the management of the activities of the management company;

2. has not been convicted of an indictable offence deliberately, unless he's vindicated;

3. it has not been a member of the managerial or supervisory authority or a member having unlimited liability in the company's bankruptcy proceedings, openly or in closed due to bankruptcy a company if you are left unsatisfied creditors;

4. is declared bankrupt or is in bankruptcy proceedings;

5. is not a spouse or relative in a straight or collateral relatives up to the third degree inclusive, or by affinity up to the third degree with another Member of the management or control body of the company;

6. it is not deprived of the right to occupy a position materialnootgovorna.

(2) the persons who conduct the actual business of the management company must have a good reputation and experience in respect of a type of collective investment schemes, which the company operated, and to meet the requirements of para. 1. The management company be managed jointly by at least two persons meeting the requirements of the first sentence.

(3) a person who has been selected as a member of the supervisory body of the management company shall comply with the requirements of paragraphs 1 and 2. 1, 2-6.

(4) the requirements of paragraphs 1 and 2. 1, 2 and 3 shall apply accordingly for the individuals that constitute legal persons-members of the management and control bodies of the management company.

(5) the requirements of paragraphs 1 and 2. 1 shall also apply to all other persons, who may conclude solely or jointly with another person trades on behalf of a management company.

(6) the circumstances referred to in paragraph 1. 1 shall certify:

1. under item 1 – with evidence of formal qualifications;

2. under item 2, with a certificate of conviction, respectively with an equivalent document;

3. under item 3 – 6 – with the Declaration.

Art. 94. (1) a management company shall notify the Commission within three working days of the selection of a new Member of the management or control body of the company or for the designation of another person who actually led the company to conclude either alone or jointly with another person deals at the expense of the company, and apply data and other documents required under art. 93 for the person.

(2) the persons under art. 93 shall notify the Commission of any change in the circumstances of them declared within three business days of the change.

(3) If a person referred to in paragraph 1. 1 or 2 does not meet the requirements of art. 93, the Vice-President may oblige the management company by the procedure of art. 195 to release that person or another person as a member of the management or control body of the company.

Chapter ten

ISSUE AND WITHDRAWAL OF AUTHORISATION

Art. 95. (1) the license for carrying out the business of management companies shall be issued by the Commission.

(2) to issue a licence under paragraph 1. 1 an application in a form approved by the Vice-President, shall apply:

1. the statutes and other instruments of incorporation;

2. data for the subscribed and paid-up capital;

3. data and other documents necessary for the persons under art. 93, respectively for individuals that represent entities, members of the management or supervisory bodies of the applicant or other persons empowered to manage and represent, as well as for their professional qualifications and experience;

4. General terms and conditions applicable to contracts relating to the management of investment firms and other investors;

5. the scheme of operations, including at least a description of the organisational structure of the management company;

6. rules for personal transactions with financial instruments of the members of the management and control bodies of the management company, the investment consultant, working under contract for the management company, the employees of the management company and the related entities;


7. data on persons who hold, directly or indirectly, a qualifying holding in the applicant or company can control it, as well as on the number of votes held by them;

8. written declaration on their actual owners and the origin of the funds from which contributions are made against subscriptions of shares, including whether funds are borrowed, and the taxes paid by them in the last 5 years in a form approved by the Deputy Chairman;

9. data on the persons with which the management company is a related party;

10. other documents and information laid down by Ordinance.

(3) the Commission shall take a decision on the application after consultation with the competent authorities of the Member States concerned, if the applicant:

1. is a subsidiary of another management company, an investment firm, a credit institution or an insurer authorised to carry out the activities by the competent authorities of another Member State;

2. is a subsidiary of the parent undertaking of another management company, an investment firm, a credit institution or an insurer authorised to carry out the activities by the competent authorities of another Member State;

3. is controlled by natural or legal persons as control another management company, an investment firm, a credit institution or an insurer authorised to carry out the activities by the competent authorities of another Member State.

(4) the Commission shall act in accordance with art. 12, al. 3-7.

(5) on the issue of the license management company fits into its register by the Commission under art. 30, para. 1 of the Act on the financial supervision Commission.

Art. 96. (1) in cases where the management company wants to perform services under art. 86, para. 2 not included in its licence, it must file an application to the Commission in a form approved by the Deputy Chairman, to extend the scope of the license, the applicable documents referred to in art. 95, para. 2, item 1, 2, 4 and 5, as well as other particulars and documents specified by an Ordinance.

(2) the Commission may refuse extension of a licence if it considers that the documents submitted by the applicant does not comply with the requirements of this law and its implementing acts.

(3) the Commission shall act in accordance with art. 12, al. 3-7.

Art. 97. (1) the Commission shall refuse to issue a license if:

1. the capital of the applicant does not meet the requirements of art. 90, para. 1;

2. any of the persons under art. 93 cannot hold office because of legal prohibition or does not comply with the requirements of this Act;

3. a person who owns, directly or indirectly, of a qualifying holding or may control the applicant with their business or their influence on decision-making, could harm the security of the company or its operations;

4. General conditions under art. 95, para. 2, item 4 do not provide sufficiently the interests of the investment company and other investors;

5. the applicant has submitted false information or false documents;

6. persons who hold, directly or indirectly, a qualifying holding in the applicant company, have made contributions with borrowed funds;

7. the applicant is a person connected with one or more natural or legal persons, and this connectivity could create obstacles to the effective exercise of the supervisory functions of the Commission or the Vice-President;

8. as it considers the activity that the applicant intends to carry out, does not provide the reliability and financial stability;

9. at its discretion, the amount of property of persons having a qualifying holding in a management company and/or developed by them in its scale and business financial performance does not match the requested to acquire shareholding in the applicant and creates doubt as to the reliability and suitability of these persons, if necessary, to provide capital support to the applicant;

10. the origin of the means by which the persons owning a qualifying holding in the asset management company, have made contributions, there is no clear and legitimate;

11. There are obstacles to the effective exercise of the supervisory functions of the Commission or the Vice-President, arising out of or in connection with the implementation of regulatory or administrative action of a third State, regulating the activity of one or more persons, with whom the applicant is related;

12. the applicant does not comply with the other requirements laid down by the law and its implementing acts.

(2) in the cases referred to in para. 1, item 1, 2, 4, 6 and 12 the Commission may deny the issuance of a final licence only if the applicant has not eliminated the disparities and has not provided the required documents within a period specified by the Office, which may not be less than one month.

(3) except in the cases referred to in para. 1 the Commission may deny the issuance of a license for carrying out the business of management companies on the territory of the Republic of Bulgaria through a branch of a legal entity from a third country, if it considers that the management company on the supervision on a consolidated basis by the relevant competent authority in the country of its headquarters does not comply with the requirements laid down in this law.

(4) the Commission may refuse to issue a license if they cannot identify the actual owners of the shareholder with a qualifying holding.

(5) the refusal of the Commission to issue a licence is refused in writing.

(6) in the case of refusal, the applicant may make a new request for the issuance of a license not earlier than 6 months from the entry into force of the decision of refusal.


Art. 98. (1) no one has the right to carry on business as a management company, without being licensed by the Commission.

(2) a person who does not hold a licence for the operation of the business of a management company in accordance with the requirements of this law, may not use in its name, advertising or other words of Bulgarian or foreign language, denoting perform actions in a collective investment scheme management.

Art. 99. The registry Agency entered in the commercial register the company with the subject of activity – activity under art. 86, after being presented by the Commission issued a license.

Art. 100. (1) the Commission takes the issued license if:

1. the management company does not begin to carry out the activities under art. 86, para. 1 within 12 months from the issuance of the license, expressly renounces the authorisation is issued, or not carried out activities under art. 86, para. 1 more than 6 months;

2. the management company has submitted false data, which served as the basis for the issuance of the licence;

3. the management company no longer fulfils the conditions under which the licence was issued;

4. management company ceases to satisfy the requirements for capital adequacy or liquidity, established by Decree, and did not offer within 7 days of infringement measures to bring it into compliance with those requirements or within the time limit under art. 91 does not resolve the violation;

5. the financial situation of a management company is permanently ill and unable to perform his duties;

6. the management company and/or the persons under art. 93 have not complied with the compulsory administrative measure applied under art. 195, para. 1 or have committed or condoned conduct of infringement of art. 35, para. 1 of the law on markets in financial instruments and of art. 11 of the Act against evil-market uses in financial instruments or other gross violation, or systemic violations of this law, the law on public offering of securities, the law on markets in financial instruments, the law against market abuse in financial instruments and the acts on their application.

(2) Before the withdrawal of the authorisation to a management company, originating in the Republic of Bulgaria, which manages collective investment scheme originating in another Member State, the Commission shall consult the competent authorities of that Member State.

(3) the Commission shall notify the company in writing within 7 days of making the decision for the withdrawal of the licence.

(4) a management company may change its objects of activity only under explicit denial of license issued and if there is no basis for the forced withdrawal of the licence.

(5) after the entry into force of the decision on the withdrawal of the licence, the Commission shall immediately forward it to the registry Agency for entry in the commercial register and on the appointment of the liquidator or of the Court, for the opening of insolvency proceedings, and shall take the necessary measures to inform the public.

Art. 101. (1) a management company shall not be entitled to carry out the activities under art. 86 after the withdrawal of the license, as well as after the judgment opening insolvency proceedings. For the asset management company shall apply accordingly to art. 23 of the law on markets in financial instruments.

(2) a management company which has provided services under art. 86, para. 2, paragraphs 1 and 2, within 14 days from becoming aware of the Commission's decision to withdrawal of the licence shall prepare and submit to the Commission a plan to settle its relations with customers. Accordingly, the company's liquidator, predstavlâvaŝiât monitors the implementation of the plan for the settlement of relations with clients of the management company and presented to the Deputy President documents proving the settlement of these relations.

(3) the Removal of the company from the commercial register is permissible only after settlement of the relationship of the management company with its customers, for which the Deputy President shall notify the registry Agency.

Art. 102. (1) a management company may be terminated only with the permission of the Commission.

(2) a management company may be converted only with the permission of the Commission, provided that all parties involved in the conversion companies are steered.

(3) the conditions and procedures for the issue of authorisation for dissolution and transformation are defined by Decree.

Chapter Eleven

REQUIREMENTS FOR THE ACTIVITIES OF THE MANAGEMENT COMPANY

Art. 103. (1) a management company shall be required to carry out the investment policy in order to achieve the investment objectives of managed collective investment scheme, as well as to comply with the investment restrictions laid down in this law, in implementing acts, the statutes of the investment company, according to the rules of the collective investment scheme.

(2) a management company is required to comply with the rules for the evaluation of the portfolio and determining the net asset value of the collective investment scheme, when carrying out these actions is assigned to him.

Art. 104. (1) a management company authorised to manage collective investment scheme shall be obliged at any time in respect of the activity of management of this scheme to:

1. maintain a sound administrative and accounting organization and technical equipment enabling to provide autonomous management of portfolios of collective investment schemes;


2. have the control and security mechanisms in the field of electronic data processing, and adequate internal control mechanisms including, in particular, the rules relating to personal transactions of the management and control bodies of the management company, the employees of the management company and the related entities, as well as rules for the investment of own funds of the management company;

3. draw up rules for the storage of information and accountability to ensure the traceability of any transaction concluded at the expense of managed collective investment schemes, at least in terms of the history of the transaction, its value, the parties to it, its nature, the time and place of the conclusion, and whether it is concluded in accordance with the Statute, according the rules of the collective investment scheme and rules in force at the time of the conclusion of deal regulatory requirements;

4. ensure that the assets of managed collective investment schemes are invested in accordance with the Statute, respectively with the rules or instruments of incorporation of these schemes and with the provisions of this law and its implementing acts;

5. are organized and structured so as to minimise the risk of damage to the interests of the collective investment schemes which govern, or customers due to a conflict of interest between the management company and its clients, between two of its clients, between one of its clients and a collective investment scheme that the company manages, or between two managed by him collective investment schemes.

(2) management companies that have a license to provide services under art. 86, para. 2, paragraph 1, are not allowed to invest all or a part of the client portfolio in shares of collective investment schemes, which they run, without having obtained prior approval from him.

(3) additional requirements in respect of the implementation of the requirements of para. 1 and 2 shall be determined by Decree.

Art. 105. (1) a management company is required to: 1. acting fairly and justly in the best interests of collective investment schemes, which manages and the integrity of the market;

2. Act with due skill, care and diligence in the best interests of the collective investment scheme which manages and the integrity of the market;

3. has and employs effectively the resources and procedures necessary for the proper conduct of their business;

4. avoid conflicts of interest, and when it cannot be avoided, ensures that the collective investment schemes, which manages, are treated fairly;

5. comply with all regulatory requirements in carrying out its activities in the best interest of investors and market integrity.

(2) the additional requirements in connection with the implementation of the obligations under para. 1, including actions that management company should take in order to detect, prevent, manage and/or disclose conflicts of interest, as well as the establishment of appropriate criteria for determining the types of conflict of interest, the existence of which could harm the interests of the collective investment schemes, which manages shall be determined by Decree.

Art. 106. (1) a management company may conclude a contract with which to delegate to a third party features and actions on the sale and redemption of shares of collective investment schemes which govern, subject to the following requirements:

1. inform the Commission at the latest by the end of the working day following the conclusion of a contract with a third party, concerning the conclusion and the essential terms of the contract;

2. conclusion of contract with third person should not create obstacles to the effective exercise of the supervisory functions of the Commission or the Deputy Chairman, as well as to prevent the management of collective investment scheme in the best interests of investors;

3. cannot enter into a contract with a third party whose interests could conflict with the interests of the management company or of a collective investment scheme, the activity of which it manages;

4. the contract with the third party must contain provisions enabling the persons who conduct the management company to carry out, at any time, effective supervision of the activities of the third party in connection with the performance of the contract, including to receive periodically and/or information upon request by that person;

5. the contract with the third party must contain provisions for persons who conduct the management company to give at any time further instructions to the opposing party and to unilaterally terminate it without notice when this is in the interest of investors;

6. the third person must have the necessary technical and organizational opportunities and qualified staff to perform the delegated functions and operations;

7. the ability to delegate functions and actions in the sale and redemption of the units of the collective investment scheme must be expressly provided for in the prospectus.

(2) the Commission shall provide the information referred to in para. 1, item 1 to the competent authorities of the Member State of origin of the collective investment scheme whose titles are delegated functions and actions in the sale and redemption.


(3) the delegation of functions and actions under para. 1 does not exempt the management company, depositary bank, respectively, of the responsibilities under the management contract, respectively for depository services.

(4) additional requirements in connection with the delegation of functions under para. 1 shall be determined by Decree.

Art. 107. The management company shall apply accordingly to art. 9, 11 and 26-26 e, art. 27, al. 2, art. 35, 39, 40, 42 and article. 111, para. 4 and 7 of the law on markets in financial instruments.

Art. 108. other requirements relating to the activities of management companies, including the General conditions under art. 95, para. 2, item 4, to the rules of art. 95, para. 2, item 6 and to individuals working under contract for the management company, as well as for capital adequacy and liquidity shall be determined by Decree.

TITLE THIRD

CARRYING OUT THE ACTIVITY OF THE MANAGEMENT COMPANY AND THE OFFERING OF SHARES OF COLLECTIVE INVESTMENT SCHEME IN THE FRAMEWORK OF THE EUROPEAN UNION

Chapter Twelve

CARRYING OUT OF THE BUSINESS OF A MANAGEMENT COMPANY, ORIGINATING IN THE REPUBLIC OF BULGARIA ON THE TERRITORY OF ANOTHER MEMBER STATE. CARRYING OUT OF ACTIVITIES IN THE REPUBLIC OF BULGARIA BY A MANAGEMENT COMPANY ORIGINATING IN ANOTHER MEMBER STATE

Section I

Carrying out of the business of a management company, originating in the Republic of Bulgaria on the territory of another Member State

Art. 109. (1) a management company which intends to establish a branch in the host Member State must inform the Commission. All branches created by the management company in a host Member State shall be regarded as a single branch.

(2) the notification under paragraph 1. 1 contains:

1. the designation of the host Member State in which the management company intends to establish a branch;

2. the scheme of operations, including information concerning the type and volume of activities and services, which the management company will be carried out in the host Member State, as well as the organisational structure of the branch, including rules for the risk management of the management company, as well as a description of the procedures and measures for treatment in an appropriate manner, the complaints of investors and for the abolition of restrictions on the exercise of the rights of host Member State investors;

3. the address in the host Member State, to which documents may be obtained;

4. the names of the persons responsible for the management of the branch.

(3) the Commission shall provide the relevant competent authority of the host Member State with the information referred to in para. 2 within one month of receiving it, and when they were requested additional information and documents, within one month of receiving them, as well as information about the current system in the country to compensate investors in which the management company is involved. The Commission shall immediately notify the management company for the provision of the information referred to in the first sentence.

 (4) the Commission may decline within the time limit referred to in paragraph 1. 3 to provide information under para. 2 of the relevant competent authority of the host Member State with a reasoned decision, if the administrative structure or the financial situation of a management company does not provide the investors ' interests. The management company shall be notified in writing of the decision within three days. The decision for refusal shall be subject to appeal before the Supreme Administrative Court.

 (5) the Commission shall inform the European Commission and the European Securities and markets authority established by Regulation (EC) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European supervisory authority (European Securities and markets authority), amending Decision No 716/2009/EC and repealing Decision 2009/77/EC (OJ , L 331/84 of 15 December 2010) on the number and nature of cases in which it is pronounced with a refusal under para. 4.

(6) where the management company wishes to exercise the activities of collective portfolio management of collective investment scheme in the host Member State, the Commission shall apply to the documentation sent to the competent authorities of the management company's host Member State a certificate stating that the management company has received the authorisation in accordance with the provisions of this Act, a description of the scope of the authorisation of the management company and the details of any restrictions on the types of collective investment schemes , which the management company is authorised to drive.

(7) a management company may establish branch and start to carry on business within the territory of the host Member State upon receipt of notification from the competent authority of the host Member State, respectively, after the expiry of two months from notification pursuant to para. 3, if within that period has not received a notification from the competent authority of the host Member State.

(8) the management company who created a branch within the territory of the host Member State shall inform the Commission and the competent authority of the host Member State of any change in the particulars and documents referred to in paragraph 1. 2 at least one month before making the change. Paragraphs 4 and 7 shall apply accordingly.

(9) the Commission shall update the information contained in the certificate referred to in paragraph 1. 6, and shall inform the competent authorities of the host Member State, the management company of any change in the scope of the authorisation of the management company or in detail – for any restriction on the types of collective investment schemes, which the management company is authorised to drive.


(10) on the territory of the host Member State management company comply with the applicable rules of that Member State, consistent with the rules of art. 105.

Art. 110. (1) a management company which intends to carry on business in the host Member State under the terms of the freedom to provide services, without opens a branch in its territory, shall inform the Commission in advance.

(2) the notification under paragraph 1. 1 contains:

1. the designation of the host Member State in which the management company intends to operate;

2. the scheme of operations, including information concerning the type and volume of activities and services, which the management company will be carried out in the host Member State, the rules for the risk management of the management company, as well as a description of the procedures and measures for treatment in an appropriate manner, the complaints of investors and for the abolition of restrictions on the exercise of the rights of investors by the host Member State.

(3) where the management company wishes to exercise the activities of collective portfolio management of collective investment scheme in the territory of the host Member State, the Commission shall apply to the documents referred to in paragraph 1. 2 a certificate stating that the management company has been authorised in accordance with the provisions of this Act, a description of the scope of the authorisation and details of any restrictions on the types of collective investment schemes, which the management company is authorised to drive.

(4) the Commission shall provide the information referred to in para. 2 of the relevant competent authority of the host Member State within one month of receipt, as well as information about the current system in the country to compensate investors in which the management company is involved. The Commission shall immediately notify the management company for the provision of the information referred to in the first sentence.

(5) a management company may start business on the territory of the host Member State, after being notified about the provision of the information referred to in para. 4 of the Commission.

(6) in the event that the management company entrusted with the sale and redemption of shares of managed collective investment schemes from it to a third party in the territory of the host Member State, it shall inform the Commission in advance.

(7) the management company comply with the rules of art. 105. (8) a management company shall inform the Commission and the competent authority of the host Member State of any change in the program at al. 2, item 2, at least one month before making the change.

(9) the Commission shall update the information contained in the certificate referred to in paragraph 1. 3 and shall inform the competent authorities of the host Member State, the management company of any change in the scope of the authorisation of the management company or any limitation on the types of collective investment schemes, which the management company is authorised to drive.

Art. 111. When a management company wants to offer, without creating a branch units of a collective investment scheme, which runs in a Member State other than the Member State of origin of a collective investment scheme, without the exercise of other activities or services shall apply chapter thirteen.

Section Ii

Carrying out of activities in the Republic of Bulgaria by a management company originating in another Member State

Art. 112. Management company originating in another Member State, authorised to carry out the business of management companies pursuant to Directive 2009/65/EC by the relevant competent authority of that State, may carry out the activity for which the licence is issued, on the territory of the Republic of Bulgaria through a branch or under the freedom to provide services. All branches created by the management company in the Republic of Bulgaria, are regarded as a single branch.

Art. 113. (1) within two months of receipt of the information with the content of art. 109, para. 2 and a certificate with the content of art. 109, para. 6 for the management company from another Member State which intends to establish a branch within the territory of the Republic of Bulgaria, the Commission shall take action in preparation for the performance of supervision over the management company within the limits of its competence.

(2) a management company from another Member State may establish a branch and start to carry on business in the territory of the Republic of Bulgaria after the receipt of the notification by the Commission, respectively, after the expiry of the period referred to in paragraph 1. If within this period receives notification.

(3) the management company from another Member State, which has created a branch, and carry on business pursuant to para. 2, notify the Commission of any change in the particulars and documents referred to in art. 109, para. 2 at least one month before making the change.

(4) the Commission shall adopt for up-to-date information contained in the information provided by the relevant competent authority certificate until notified by the relevant competent authority for the change of the data referred to in the certificate.

(5) the management company from another Member State, which exercise the business through a branch within the territory of the Republic of Bulgaria complies with the rules of art. 105.


Art. 114. (1) a management company shall originate from another Member State which intends to carry on business in the Republic of Bulgaria under the terms of the freedom to provide services, without opens a branch in its territory, can begin to operate after the Commission received information from the relevant competent body on the programme of activities of the management company in the country.

(2) the information referred to in para. 1 must also contain details of any compensation scheme intended to protect investors in which the management company is involved.

(3) where the management company from another Member State wishes to exercise the activity of management of portfolios, the relevant competent authority of the Member State shall apply to the program for the activity a certificate stating that the management company has been authorised in accordance with Directive 2009/65/EC, the description of the scope of the authorisation and details of any restrictions on the types of collective investment schemes, which the management company is authorised to drive.

(4) a management company of another Member State shall notify the Commission of any change in the particulars and documents referred to in paragraph 1. 1 at least one month before making the change.

(5) the Commission shall adopt for up-to-date information contained in the information provided by the relevant competent authority certificate until notified by the relevant competent authority for the change of the data referred to in the certificate, including any change in the scope of the authorisation of the management company or in detail – for any restriction on the types of collective investment schemes, which the management company is authorised to drive.

(6) a management company from another Member State pursuing an activity in the territory of the Republic of Bulgaria under the terms of the freedom to provide services, comply with the rules of art. 105.

Section Iii

Applicable law in carrying out the activity on the territory of another Member State by a management company, originating in the Republic of Bulgaria through the establishment of a branch or under the freedom to provide services

Art. 115. the Commission carries out supervision over the management company, which has granted a license, regardless of whether they operate in another Member State through a branch or under the freedom to provide services, without prejudice to the measures provided for in Directive 2009/65/EC, provisions which assign responsibility to the competent authorities of the management company's host Member State.

Art. 116. (1) a management company, originating in the Republic of Bulgaria, which exercise activity portfolio management in another Member State by establishing branches or under the freedom to provide services, comply with the provisions of this Act relating to the Organization of the management company, including arrangements for the delegation, procedures for risk management, prudential rules and rules of supervision requirements under art. 104 and the requirements for disclosure of the management company.

(2) the Commission shall supervise the compliance with the rules referred to in paragraph 1. 1.

Art. 117. (1) a management company comply with the rules in the Member State of origin of the collective investment scheme on the establishment and activities of collective investment scheme, and in particular those relating to: 1. the Constitution and the granting of permission for a collective investment scheme;

2. issuance and redemption of shares;

3. investment policies and restrictions, including the calculation of the total exposure and leverage;

4. restrictions on receiving and lending and short sales;

5. valuation of assets and the reporting of the collective investment scheme;

6. the calculation of the net asset value and the price of redemption, elimination of errors in the calculation of the net asset value and corresponding compensation for investors;

7. the distribution or reinvestment of the proceeds;

8. the requirements for disclosure of information for the collective investment scheme, including the prospectus, the key investor information and financial statements;

9. the offering of shares of collective investment scheme;

10. relations with holders of shares;

11. the conversion of a collective investment scheme;

12. the liquidation of a collective investment scheme;

13. the contents of the register of holders of shares – where applicable;

14. fees for permits and supervision in respect of collective investment schemes, and

15. the exercise of voting rights and other rights of holders of shares relating to item 1 – 13.

 (2) a management company shall perform the duties set out in the rules, respectively, in the Statute and in the prospectus of collective investment scheme or in her acts and obligations laid down in prospek, which are in accordance with the applicable legislation of the Member State of origin of the collective investment scheme.

 (3) a management company shall take the necessary decisions and be responsible for the adoption and implementation of all measures and organizational decisions necessary to ensure compliance with the rules relating to the establishment and functioning of the collective investment scheme and with the obligations laid down in the rules, respectively, in the Statute and in the prospectus or the instruments of incorporation of the company, as well as the obligations laid down in the prospectus.


 (4) the Commission shall be responsible for the implementation of supervision over the adequacy of the measures and the organisation of the management company so that they are able to fulfil their obligations and the rules relating to the establishment and functioning of all collective investment schemes, which manages.

Section Iv

Applicable law in the conduct of activities in the Republic of Bulgaria by a management company originating in another Member State by establishing branches or under the freedom to provide services

Art. 118. Management company originating in another Member State, which exercise the activity of management of portfolios on the territory of the Republic of Bulgaria through the establishment of a branch or under the freedom to provide services, comply with the rules of the Member State of origin, relating to the Organization of the management company, including arrangements for the delegation, procedures for risk management, prudential rules and rules for the control the requirements under art. 104 and reporting requirements of the management company.

Art. 119. (1) a management company comply with the provisions of art. 117, para. 1 on the establishment and activities of collective investment scheme.

(2) a management company shall perform the duties set out in the rules, respectively, in the Statute and in the prospectus of collective investment scheme or in her acts and obligations laid down in prospek, which are in accordance with the provisions of this law.

(3) the Commission shall monitor compliance with the requirements of paragraphs 1 and 2. 1 and 2.

(4) a management company shall take the necessary decisions and be responsible for the adoption and implementation of all measures and organizational decisions necessary to ensure compliance with the rules relating to the establishment and functioning of the collective investment scheme and with the obligations laid down in the rules, respectively, in the statutes or instruments of incorporation of the company, as well as with the obligations laid down in the prospectus.

Section V

Management of collective investment scheme originating in the Republic of Bulgaria by a management company originating in another Member State

Art. 120. (1) a management company which has received the right to carry on business in the territory of the Republic of Bulgaria pursuant to Chapter ten and wants to manage collective investment scheme originating in the Republic of Bulgaria shall submit an application to the Commission in a form approved by the Deputy Chairman, to which the following documents apply: 1. the agreement with the depositary bank based in the Republic of Bulgaria or with a branch in the Republic of Bulgaria;

2. information on the arrangements for the delegation on the functions of management and administration of the investments under art. 86, para. 1;

3. a certificate from the competent authorities of the Member State of origin of the management company in accordance with art. 113, para. 1 or art. 114, para. 3.

(2) If a management company already manages another collective investment scheme of the same kind in the Republic of Bulgaria, it presents a report of already submitted documents on al. 1, relevant to the new collective investment scheme.

(3) in order to ensure compliance with the rules applicable in respect of the management company, operating under para. 1, to comply with the corresponding Commission, it may request the competent authorities of the Member State of origin of the management company to provide within 10 working days of the dispatch of the request clarification or information concerning the documents referred to in para. 1 and the certificate referred to in paragraph 1. 1, item 3 If the type a collective investment scheme, for which authorization is sought, shall enter into the scope of the authorisation of the management company.

(4) the Commission shall act in accordance with art. 12, al. 3-5.

(5) a management company shall inform the Commission of any subsequent substantial change in the documents referred to in para. 1.

Art. 121. (1) the Commission may reject the application of the management company if it: 1. does not comply with the rules applicable under art. 119;

2. no authorization by the competent authority of the Member State of origin to control the type of a collective investment scheme, for which authorization is sought;

3. is not provided the documents referred to in art. 120, para. 1.

(2) to reject the application, the Commission shall consult the competent authorities of the Member State of origin of the management company.

Section VI

Management of collective investment scheme originating in another Member State by a management company, originating in the Republic of Bulgaria

Art. 122. (1) a management company shall take measures in accordance with this law and its implementing instruments for providing opportunities to make payments for the benefit of the holders of shares, buying them and vice versa providing the information to the investor.

(2) a management company is required to have adequate procedures and measures to ensure the treatment appropriately to complaints from investors, and that there are no restrictions for investors to exercise their rights. These measures should allow investors to submit grievances in the official language or one of the official languages of their Member State.

(3) a management company shall establish appropriate procedures and measures to provide information on request from the public and the Commission.


Art. 123. The Commission within 10 working days of receipt of a request by a competent authority of a Member State to which the management company originating in the Republic of Bulgaria has submitted an application to manage collective investment scheme originating in that Member State, shall provide clarification or information on the enclosed application documents and with the information generated by the Commission under art. 109, para. 6 a certificate whether the type of a collective investment scheme, which the company wishes to operate, falls within the scope of the types of collective investment schemes, which the management company is authorised to operate under a license issued by the Commission.

Section VII

Supervisory activity in carrying out the activities of a management company of a cross-border basis through the establishment of a branch or under the freedom to provide services

Art. 124. (1) the Commission may, for statistical purposes, require every management company originating in another Member State, and carrying on business through a branch, periodically to provide information on the activities exercised in the Republic of Bulgaria.

(2) the Commission may require the management company originating in another Member State pursuing an activity in the territory of the Republic of Bulgaria by the formation of a branch or under the freedom to provide services, to provide the information necessary to carry out the supervision of compliance with the applicable rules, the Commission shall monitor.

(3) the management company originating in another Member State which manages collective investment scheme with a country of origin, the Republic of Bulgaria shall ensure that the procedures and measures set out in art. 122, allow the Commission to receive information under para. 2 directly from the management company.

(4) establishes that the management company originating in another Member State carries on business through a branch or under the freedom to provide services in the territory of the Republic of Bulgaria, violates any of the rules, for which the Commission is responsible, it shall require the management company concerned to put an end to this violation and shall inform the competent authorities of the Member State of origin of the management company.

(5) When the management company under para. 4 refuse to provide the Commission with the requested information or fails to take the necessary steps to terminate the alleged infringement, the Commission shall inform the competent authorities of the Member State of origin of the management company.

(6) where, despite measures taken by the competent authorities measures to provide the requested information, respectively, for termination of the infringement, the Commission was informed, or because such measures prove inadequate or are not available in the Member State in question, the management company continues to refuse to provide the information requested by the Commission under paragraph 4. 2, or to violate this law and the instruments for its implementation, the Commission may, after informing the competent authorities of the Member State of origin of the management company, to implement the necessary measures to prevent or to penalise irregularities and new in so far as this is necessary to prevent the implementation of the asset management company of new operations on the territory of the Republic of Bulgaria.

(7) where the service provided on the territory of the Republic of Bulgaria, represents the management of collective investment scheme, the Commission may require the management company to terminate the management of this collective investment scheme.

(8) before following the procedure laid down in paragraph 1. 5 and 6, the Commission may, for reasons of urgency, impose a preventive measure necessary to protect the interests of investors and others for whom services are provided, and shall inform the European Commission, the European Securities and markets authority and the competent authorities of other concerned Member States in the shortest possible time. The Commission, at the request of the European Commission repealed or amended the measure.

Art. 125. the Commission, upon request, provide advice to the competent authorities of the Member State of origin of the management company before you withdraw the authorisation, licence of the management company accordingly and take appropriate measures to protect the interests of investors. These measures may include solutions that protect new deals by the management company on the territory of the Republic of Bulgaria.

Art. 126. (1) where the management company originating in the Republic of Bulgaria broke the rules for compliance with the responsible competent authorities of the host Member State, and despite a request from these bodies do not end the infringement after it was informed by the competent authorities of the host Member State, the Commission is obliged to take in the shortest possible time all appropriate measures to ensure that the management company concerned to provide the information required by the host Member State, or to put an end to that infringement. The Commission shall inform the competent authority of the host Member State of the measures taken.

(2) the Commission, with the assistance of the relevant State authorities provide on the territory of the Republic of Bulgaria management companies to be awarded for acts taken against them by the competent authorities of the host Member State.


Art. 127. The Commission shall communicate to the Commission the number and nature of cases in which permission was denied by the procedure of art. 109, para. 4, rejected the application of art. 121, para. 1 or has taken measures under paragraph 1 of article 17. 124, para. 6 and 7.

Chapter thirteen

OFFERING OF SHARES IN A COLLECTIVE INVESTMENT SCHEME ORIGINATING IN ANOTHER MEMBER STATE IN THE TERRITORY OF THE REPUBLIC OF BULGARIA. OFFERING OF SHARES IN A COLLECTIVE INVESTMENT SCHEME ORIGINATING IN THE REPUBLIC OF BULGARIA ON THE TERRITORY OF ANOTHER MEMBER STATE

Section I

Offering of shares in a collective investment scheme originating in another Member State in the territory of the Republic of Bulgaria

Art. 128. (1) a collective investment scheme originating in another Member State may offer shares on the territory of the Republic of Bulgaria, after the competent authority of that Member State shall inform the Commission.

(2) the notification shall be made with reference to the development of collective investment scheme notification letter, accompanied by a certificate issued by the competent authority of the Member State of origin of the collective investment scheme, certifying the compliance of the scheme with the requirements laid down in Directive 2009/65/EC.

(3) Notification letter contains information on the measures taken for the offering of the shares of the collective scheme in the territory of the Republic of Bulgaria, including, where applicable, measures for supply of the relevant classes of shares, and in the cases under art. 111 – and information that the shares will be offered by the company and scheme management to it, shall apply: 1. the incorporation of a collective investment scheme, the prospectus, the latest annual and six-monthly report of Bulgarian or English, translated according to art. 131, para. (2);

2. the document with key information for investors in the Bulgarian language, translated according to art. 131, para. 2.

(4) the Commission may not require any additional documents, certificates or information other than those referred to in paragraph 1. 2 and 3.

(5) Notification letter and certificate are provided in the English language, unless there is an agreement between the Republic of Bulgaria and the Member State of origin of the collective scheme these documents to be made available in the official languages of the two countries.

(6) the rules on the provision to the territory of the Republic of Bulgaria shares the collective investment scheme originating in another Member State laid down in this section shall apply in the offering of shares of individual investment podfondove of a collective investment scheme.

Art. 129. the Commission provides access to English via her official website, up-to-date information about laws, regulations and administrative acts, which are outside the scope of the directive 2009/65/EC applicable in the territory of the Republic of Bulgaria of units of a collective investment scheme originating in another Member State.

Art. 130. A collective investment scheme originating in another Member State which offers shares on the territory of the Republic of Bulgaria shall take the necessary measures to ensure the completion of redemption payments to the holders of shares and the provision of information in accordance with the laws, regulations and administrative acts in the Republic of Bulgaria.

Art. 131. (1) a collective investment scheme originating in another Member State provides investors in the Republic of Bulgaria all information and documents which have access to investors in the Member State of its origin, in such a way that they are provided in accordance with this law and its implementing acts.

(2) the document with key information for investors is provided to investors in the Republic of Bulgaria the Bulgarian language, and any other information can be provided at the choice of the collective investment scheme of Bulgarian or English. The translation of a document with key information to investors and any other information must accurately reflect the full content of the original.

 (3) the requirements for providing the information and documents referred to in this article shall apply to any subsequent change and update.

Art. 132. (1) a collective investment scheme originating in another Member State shall publish, in an appropriate manner, information on the issue value and the redemption of units on the territory of the Republic of Bulgaria with the frequency laid down in the laws, regulations and administrative provisions in the Member State of origin.

(2) the collective investment scheme shall notify the Commission of the frequency and manner in which the information published in para. 1.

Art. 133. Collective investment scheme originating in another Member State in carrying out an activity in the territory of the Republic of Bulgaria can use the same reference to the legal form ("investment company" or "contract (mutual) Fund"), which uses in the Member State of origin.

Art. 134. (1) the control of compliance with the requirements of art. 130-132, and of the laws, regulations and administrative acts, which are outside the scope of the directive 2009/65/EC and are applicable to the activities of the collective investment scheme originating in another Member State in the territory of the Republic of Bulgaria, shall be carried out by the Commission.


(2) where there are sufficient data, incriminating for violation of the obligations of a collective investment scheme originating in another Member State arising from the provisions of Directive 2009/65/EC, monitoring the observance of which is not within the competence of the Commission, the Commission shall inform the competent authority of the Member State of origin of the scheme.

(3) in the event that the measures taken by the competent authority of the Member State of origin are inadequate, inappropriate or untimely, and therefore any subsequent offering of shares of collective investment scheme threatens or harms the interests of investors in the Republic of Bulgaria, the Commission may take one of the following:

1. after informing the competent authority of the Member State of origin of the collective investment scheme to implement appropriate measures to protect the interests of investors, including to stop the supply of shares on the scheme in the territory of the Republic of Bulgaria; the Commission shall inform the European Commission of the measures applied;

2. to refer the case to the European Securities and markets authority.

Art. 135. where the competent authority of the Member State of origin of the collective investment scheme, which operates on the territory of the Republic of Bulgaria, inform the Commission of the decision on the withdrawal of authorisation or to measure applied for suspension of the issue or the re-purchase or redemption of units of a collective investment scheme, which is run by a management company, originating in the Republic of Bulgaria, the Commission may apply the measures referred to in art. 195 and impose administrative penalty under art. 204 against the management company for violating the provisions of this law and its implementing acts in connection with the activities of the management company.

Section Ii

Offering of shares in a collective investment scheme originating in the Republic of Bulgaria on the territory of another Member State

Art. 136. (1) a collective investment scheme, for which the Republic of Bulgaria is a Member State of origin and that intends to offer shares on the territory of another Member State, send the Commission notification letter, which contains information on the measures taken for the offering of shares in the host Member State, including, where applicable, measures for supply of the relevant classes of shares, and in the cases of art. 111 – and information that the shares will be offered by the asset management company scheme.

(2) to the notification letter shall apply:

1. the statutes, respectively, the rules of the collective investment scheme, the prospectus, the latest annual and six-monthly report, translated according to art. 137, para. 3;

2. the document with key information for investors, translated according to art. 137, para. 3.

(3) If the information and documents are incomplete or incorrect, the Commission sends a message to the collective investment scheme.

(4) within 10 working days of receipt of the notification letter and the documents annexed to it, the Commission shall forward them to the competent authority of the Member State in which the collective investment scheme intends to offer shares. To them, the Commission applies a certificate concerning the conformity of collective investment scheme with the requirements laid down in Directive 2009/65/EC.

(5) Notification letter and the certificate shall be drawn up in the English language, unless there is an agreement between the Republic of Bulgaria and the host Member State of those documents to be drawn up in the official languages of the two countries.

(6) the Commission shall immediately notify the collective investment scheme for the dispatch of the documents referred to in para. 4. Collective investment scheme may be offering you shares in a host Member State from the date of receipt of the notification.

(7) the collective investment scheme in the update of the documents referred to in para. 2 and their translations shall without delay inform the competent authority of the host Member State in accordance with the procedure laid down in the law and order and inform him where can be obtained in electronic form.

(8) in the event of a change in the information in the notification letter in al. 1 the collective investment scheme in writing shall inform the competent authority of the host Member State before making the change.

Art. 137. (1) a collective investment scheme, for which the Republic of Bulgaria is a Member State of origin and which offers shares on the territory of another Member State, provide the investors on the territory of that Member State all the information and documents which pursuant to Chapter 7 provides investors in the Republic of Bulgaria.

(2) the information and documents referred to in para. 1 shall be made available to investors in the manner laid down in laws, regulations and administrative provisions of the host Member State.

(3) the document with key information for investors is provided by the official or one of the official languages of the host Member State or in a language approved by the competent authorities of that State. Any other information other than key information to investors, may be provided at the choice of the collective investment scheme in one of the ways referred to in the first sentence, or in English. The translation should reflect an accurate and complete contents of the original.

(4) the requirements for providing the information and documents referred to in this article shall apply to any changes and update.


Art. 138. A collective investment scheme, for which the Republic of Bulgaria is a Member State of origin and which offers shares on the territory of another Member State, that Member State shall publish in the issue value and the redemption of shares with the frequency specified in this law and its implementing acts.

Art. 139. The control over the activities of collective investment scheme, for which the Republic of Bulgaria is a Member State of origin and which offers shares on the territory of another Member State, shall be carried out by the Commission in accordance with the provisions of art. 116 and 117, with the exception of the control of compliance with the relevant art. 130-132 requirements in the legislation of the host Member State, as well as the laws, regulations and administrative provisions in the host Member State, which are outside the scope of the directive 2009/65/EC, which is carried out by the supervisory authority of the host Member State.

Art. 140. (1) when deciding on the withdrawal of the authorisation, the authorisation accordingly for the carrying out of the activities of the collective investment scheme for the application of a coercive administrative measure of suspension of the redemption of the shares or other coercive administrative measure or the imposition of administrative penalty, the Commission shall without delay communicate its decision to the competent authorities of the host Member State, in cases where the asset management company is its originating in another Member State and the competent authorities of that State.

(2) in the case referred to in para. 1 the Commission may apply compulsory administrative measures or impose an administrative penalty of the management company only if the company violates the provisions compliance with which control is carried out by the Commission, rather than by the competent authority of the Member State of origin of the management company.

Chapter fourteen

TRANSFORMATION AND TERMINATION

Section I

Types of conversion

Art. 141. (1) a collective investment scheme, for which the Republic of Bulgaria is a Member State of origin, can be converted only by merger and acquisitions after the permission of the Commission, when everyone else is involved in converting collective investment schemes are originating in the Republic of Bulgaria.

(2) a collective investment scheme, for which the Republic of Bulgaria is a Member State of origin, can be converted only by merger and acquisitions after authorisation from the Commission when the collective investment scheme is a transformative conversion is involved in collective investment schemes originating in other Member States.

(3) the Conversion by merger and acquisition of collective investment schemes subject to para. 2 is present and in merger and acquisition of separate investment podfondove of one or more collective investment schemes.

(4) a collective investment scheme, for which the Republic of Bulgaria is a Member State of origin may participate in conversion under art. 142, para. 3, when she's not converting, and this form of conversion is admissible under the legislation of the Member State of origin of the conversion are collective investment schemes and has obtained permission for their conversion by the competent authority of that Member State.

(5) investment company, for which the Republic of Bulgaria is a Member State of origin, can be converted and by changing its legal form into a mutual fund after the authorization of the Commission under the conditions and in accordance with procedures laid down by Ordinance.

Art. 142. (1) in the conversion through a drip one or more collective investment schemes or its respective investment podfondove (transformative are collective investment schemes) are dissolved without going into liquidation and transfer to another existing collective investment scheme or its respective investment podfondove (host a collective investment scheme) all your assets and liabilities against the granting of the host shares a collective investment scheme of the holders of shares of conversion are collective investment schemes If applicable, and the amount of money at a rate not higher than 10 per cent of the value of such shares, determined on the basis of the net asset value.

(2) in the conversion by merging two or more collective investment schemes or their respective investment podfondove (transformative are collective investment schemes) are dissolved without going into liquidation and transfer to another set of them a collective investment scheme or its respective investment podfondove (collective investment scheme's) all the assets and liabilities against the granting of shares of the newly established collective investment scheme of the holders of shares of conversion are collective investment schemes If applicable, and the amount of money at a rate not higher than 10 per cent of the value of such shares, determined on the basis of the net asset value.

(3) in the cases under art. 141, para. 4 one or more collective investment schemes or its respective investment podfondove (transformative are collective investment schemes) continue to exist to the repayment of all outstanding debts and net assets are transferred to another investment podfond of the same collective investment scheme, the pre-existing collective investment scheme or the other of them constituted a collective investment scheme (host's or collective investment scheme).


Art. 143. (1) the decision to convert to an investment company shall be taken by the general meeting of the company.

(2) the articles of Association of the investment company provides a large majority for a decision to convert the company from established in art. 230 of the commercial law.

(3) the decision to convert the mutual fund shall be taken by the governing body of the Fund management company.

Art. 144. (1) for the issue of an authorization by the Commission under art. 141, para. 1 an application in a form approved by the Deputy Chairman.

(2) the Commission shall take a decision on the application within 20 working days of receiving it, and when they were requested additional information and documents, within 10 working days of receipt.

(3) on the basis of the documents submitted, the Commission shall establish whether the requirements have been met for issuance of the requested permission. If the submitted information and documents are incomplete or substandard or need any additional information or evidence for the correctness of the data, the Commission sends a message and set a time limit for the removal of the identified deficiencies and non-conformities or to provide additional information and documents.

(4) If the notice under paragraph 1. 3 do not be accepted by the applicant to the designated mailing address, the time limit for their submission runs from putting the message on a specially defined place in the building of the Commission. This circumstance shall be certified by a Protocol drawn up by officials designated by order of the President of the Commission.

(5) the Commission shall refuse authorisation if they have not complied with the requirements of the law or of the instruments for its implementation, or are not protected investors ' interests. The applicant shall be notified in writing of the decision within three days.

(6) the documents annexed to the application, the terms and conditions of conversion under para. 1 shall be determined by Decree.

Section Ii

Issue of permit for the conversion of a collective investment scheme originating in the Republic of Bulgaria, when the transformation involved collective investment schemes originating in other Member States

Art. 145. (1) for the issue of a permit under art. 141, para. 2 transformation is a collective investment scheme, for which the Republic of Bulgaria is a Member State of origin, the Commission shall submit to the sample application approved by the Vice-President, to which apply:

1. the plan for the proposed reorganization approved by the cooperative to be a collective investment scheme and, in the case of conversion through a drip – and by the host collective investment scheme;

2. current prospectus and documents with key information for investors of the host or the newly established collective investment scheme originating in another Member State;

3. Declaration by each of the depositaries of the transformation and host a collective investment scheme that are checked for conformity of the data referred to in para. 2, item 1, 6 and 7 with the requirements of the applicable legislation and the rules of the mutual fund (unit trust) or the founding documents of incorporation;

4. information about the conversion, that transformation is a collective investment scheme and host, respectively, the newly established collective investment scheme will provide to holders of its shares.

(2) the plan for conversion under para. 1 paragraph 1 shall contain at least the following information:

1. determine the type of conversion and of the collective investment schemes;

2. the circumstances and justification for the proposed conversion;

3. the expected impact of the proposed conversion on the holders of shares of conversion are collective investment schemes and, in the case of conversion through a drip — and host a collective investment scheme;

4. acceptance criteria for the evaluation of the assets and, where applicable, and of liabilities at the date of calculation of the ratio of the return referred to in art. 154;

5. the method for calculating the ratio of replacement;

6. the planned effective date of the re-format;

7. the rules under which it will carry out a transfer of assets or exchanges of shares;

8. in case of reorganization by merger-rules or instruments of incorporation of the newly established collective investment scheme.

(3) Participating in converting collective investment schemes may include additional information to the contents of the conversion plan.

(4) the documents and information referred to in para. 1 provide the Bulgarian language and the official language or one of the official languages of the Member State of origin of the host or the newly established a collective investment scheme, or in a language approved by their competent authorities.

(5) where the Commission considers that the documents and information submitted pursuant to para. 1 is incomplete, it sends a message to the applicant and shall set a deadline for the removal of the identified deficiencies and non-conformities or for the submission of additional information and documents within 10 working days of receipt of the application. Article 144, para. 4 shall apply accordingly.

Art. 146. (1) where the Commission considers that the documents and information referred to in art. 145 are presented in the fullness or after supplementing them by the procedure of art. 145, para. 5, it shall immediately provide a copy thereof to the competent authorities of the Member State of origin of the host or the newly established collective investment scheme.


(2) If examination of the documents and information referred to in art. 145 the Commission shall take into account the potential impact of the transformation on the holders of shares of the cooperative to be a collective investment scheme, to assess whether they provide adequate information.

(3) if the Commission considers it necessary, may in writing request the provision of clearer information on the holders of shares of conversion are collective investment schemes.

(4) where the Commission is informed by the competent authorities of the Member State of origin of the host or the newly established collective investment scheme that at their discretion the information which will be provided to the holders of shares of this scheme is not suitable and its change is requested, the Commission shall take a decision after receiving the notification of these competent authorities whether they are satisfied with the revision of the information.

Art. 147. (1) the Commission shall issue a permit to perform the conversion, if:

1. the proposed conversion complies with the requirements of art. 145, 146, 149 and 150;

2. the host or the newly established collective investment scheme has lodged a notice of an offer of its shares in all Member States in which the conversion companies have submitted a notification or have received permission to offer their titles in accordance with art. 136;

3. the Commission and the competent authorities of the Member State of origin of the host or the newly established collective investment scheme believe that the holders of shares are given adequate information on the conversion or the Commission has received information pursuant to art. 146, para. 4 the competent authorities of the Member State of origin of the host or the newly established collective investment scheme believe information about the conversion, which will be provided to the holders of shares, for inappropriate.

(2) the Commission shall notify the transformation is a collective investment scheme within 20 working days of receipt of the full set of documents under art. 145 of its decision to allow or not allow carrying out the conversion.

(3) the Commission shall communicate its decision to the competent authorities of the Member State of origin of the host or the newly established collective investment scheme.

Art. 148. (1) where in the case of conversion, in which the host's or collective investment scheme, for which the Republic of Bulgaria is a Member State of origin, the Commission has received from the competent authorities of the Member State of origin of the transformation scheme is a copy of the information equivalent to that referred to in art. 145, para. 1, when considering this information, the Commission shall take into account the potential impact of the transformation on the holders of shares in a collective investment scheme, for which the Republic of Bulgaria is a Member State of origin, to assess whether the holders of shares shall provide appropriate information for the transformation.

(2) if it considers it necessary, within 15 days of receipt of a copy of the information equivalent to that referred to in art. 145, para. 1, the Commission may in writing request the collective investment scheme, for which the Republic of Bulgaria is a Member State of origin, to change the information which will be made available to the holders of the shares.

(3) in the cases referred to in para. (2) the Commission shall inform the competent authorities of the Member State of origin of the cooperative to be scheme within 20 working days of receipt of the copy of the documents and information, corresponding to those referred to in art. 145, para. 1, notify them whether it is satisfied with the revision of the information intended for holders of the shares of the host or the newly established collective investment scheme.

Section Iii

Control over the conversion of the depository bank and an independent auditor, information of unit-holders and other rights related to the conversion

Art. 149. The depository bank of the collective investment scheme, which participates in the pre-formated, verify that the information in the content of the plan for conversion under art. 145, para. 2, item 1, 6 and 7, complies with the requirements of the law, the rules on the Statute and other constitutive documents of this collective investment scheme.

Art. 150. (1) the transformation is a collective investment scheme, for which the Republic of Bulgaria is a Member State of origin shall provide to the Commission together with the documents referred to in art. 145, para. 1 report prepared by an independent auditor, setting out the results of the verification of:

1. the criteria for the evaluation of the assets and, where applicable, and of liabilities at the date of calculation ratio of replacement referred to in art. 154;

2. the aid to be paid a sum of money for a share, when the payment of such is provided;

3. the method for calculating the ratio of return, as well as the actual ratio, calculated from the date of the exchange ratio calculation in accordance with art. 154.

(2) a copy of the report of the independent auditor is provided free of charge at the request of the unit-holders of both the transformation is a collective investment scheme, and others involved in the conversion and schemes of the supervisory authorities.

(3) for the purposes of the examination under paragraph 1. 1 an independent auditor could be the independent auditor, validated the financial statements of the transformation of the host or a collective scheme.


Art. 151. (1) the conversion collective investment schemes, for which the Republic of Bulgaria is a Member State of origin, provide appropriate and accurate information on the holders of shares that allows them to make an informed assessment of the impact of the transformation on their investment and to exercise your rights under art. 152, containing:

1. the circumstances and justification for the proposed conversion;

2. the possible impact of the transformation on the holders of shares, including, but not limited to, the essential differences with regard to the investment policy and strategy, costs, expected results, periodic reporting and possible deviations in results of operations, as well as, where applicable, an explicit warning to investors about a possible change in tax treatment after the merger;

3. all of the specific rights of the holders of shares in respect of the proposed conversion, including, but not limited to, the right to receive the additional information, the right to receive a copy of the report of the independent auditor on request, the right to require redemption or, where applicable, the conversion of their shares free of charge in accordance with art. 152 and the deadline for the exercise of that right;

4. procedural issues and the planned effective date of the conversion;

5. a copy of the document with key information for investors of the receiving, respectively, the newly established collective investment scheme.

(2) the information referred to in para. 1 shall be provided to the holders of the shares after the issuance of the authorization to carry out the conversion of the Commission in the cases under art. 141, para. 1 and 2 or after authorisation of the competent authority of another Member State in the cases under art. 148. (3) the provision of the information referred to in para. 1 shall be made up to 30 days before the deadline for the submission of a request for redemption or, if applicable, to convert without additional fees in accordance with art. 152.

(4) When participating in a collective investment scheme conversion for which the Republic of Bulgaria is a Member State of origin has filed notification under art. 136, it shall provide the information referred to in para. 1 and the official or one of the official languages of the host Member State or to other approved language by its competent authorities. The translation of the information referred to in para. 1 the language of the first sentence should reflect an accurate and complete contents of the original and the responsibility for its preparation is a collective investment scheme.

(5) additional requirements for the content, form and manner of providing the information referred to in para. 1 shall be determined by Decree.

Art. 152. (1) the holders of shares in participating in a collective investment scheme conversion for which the Republic of Bulgaria is a Member State of origin may request redemption of their shares or when possible, convert their shares into shares of another collective investment scheme with similar investment goals, managed by the same management company or by any other company with which the management company is linked by common management or control or by a substantial direct or indirect holding without due other fees other than those related solely to cover the costs of early termination of the investment, with the aim of releasing the funds to satisfy requests for redemption or conversion of shares.

(2) the right of the holders of shares under par. 1 may be exercised from the moment they are informed of the conversion by the procedure of art. 151, and terminates 5 working days before the date for calculating the ratio of return on art. 154.

(3) the Commission may require the collective investment scheme or to resolve at its request a temporary suspension of the sale or redemption of shares in cases where this is in the interest of the unit-holders.

Art. 153. in connection with The preparation and execution of the transformation of legal, consultancy and administrative costs are for the account of participating in the transformation of collective investment schemes and the holders of their shares.

Section Iv

Effect of conversion

Art. 154. (1) upon conversion, in which I participate collective investment schemes originating in other Member States, as well as in the transformation, in which cast and collective investment schemes from other Member States, and the host or the newly established collective investment scheme is originating in the Republic of Bulgaria, the date on which the conversion shall take effect, shall be the date of registration of the conversion in the commercial register, when participating in the conversion company originating in the Republic of Bulgaria is an investment company Accordingly, the date of entry in the register under art. 30, para. 1 of the Act on the financial supervision Commission, when all involved in converting collective investment schemes originating in the Republic of Bulgaria are mutual funds, or any other referred to in the plan of conversion effective date of conversion. Date of share exchange ratio calculation can not be earlier than five working days prior to the effective date of the conversion, and the date of the determination of net asset value in cases where the holders of shares are entitled to a cash payment, is the effective date of the conversion.


(2) upon conversion, in which the transformation is a collective investment scheme is originating in the Republic of Bulgaria, and the host is a collective investment scheme originating in another Member State, the date on which the conversion shall take effect, the date of calculation of share exchange ratio, as well as the date of establishing net asset value in cases where the holders of shares are entitled to a cash payment shall be determined in accordance with the legislation of the Member State of origin of the host a collective investment scheme.

(3) in the case of conversion in para. 1 attach the action of conversion shall be made public by the host a collective investment scheme in order determined by the Ordinance, and it shall notify the Commission and the competent authorities of the Member States of origin of the others involved in converting collective investment schemes.

(4) since the effects of vesting under subsection conversion. 1 it cannot be declared null and void.

Art. 155. (1) the conversion of collective investment schemes through a merger shall have the following consequences:

1. all assets and liabilities of the cooperative to be a collective investment scheme is transferred to the host a collective investment scheme;

2. holders of shares of the cooperative to be a collective investment scheme become owners of the shares of the host, such as collective investment scheme to achieve the equivalent ratio of replacement can be made cash payments in the amount of not more than 10% of the net asset value of their shares in the cooperative to be a collective investment scheme;

3. transformation is a collective investment scheme terminated its existence with the entry into force of the conversion.

(2) the conversion of collective investment schemes through a merger shall have the following consequences:

1. all assets and liabilities of the conversion are collective investment schemes are transferred to the newly established collective investment scheme;

2. holders of shares of conversion are collective investment schemes have become holders of shares of the newly established a collective investment scheme, to achieve an equivalent ratio of replacement can be made cash payments in the amount of not more than 10% of the net asset value of their shares in the cooperative to be a collective investment scheme;

3. conversion to collective investment schemes may no longer exist with evoking the action of conversion.

(3) the conversion of collective investment schemes under art. 142, para. 3 has the following consequences:

1. the net assets of the transformation is a collective investment scheme is transferred to the host a collective investment scheme;

2. holders of shares of the cooperative to be a collective investment scheme become holders of shares of a host a collective investment scheme;

3. transformation is a collective investment scheme continues to exist to the discharge of its obligations.

Art. 156. The management company of collective investment scheme, the host shall promptly notify the depository bank of the host collective investment scheme for the completion of the transfer of assets and liabilities, where such is provided.

Section V

The termination of a collective investment scheme

Art. 157. (1) Except in accordance with the commercial code the investment company shall be terminated involuntarily:

1. in the case of withdrawal of the licence;

2. where, within three months after the withdrawal of the licence, dissolution or bankruptcy of the asset management company investment company it has not chosen a new management company itself or through a merger or acquisition.

(2) Except by the order of art. 363, the letters "a" and "b" of the law on obligations and contracts the contract Fund shall be terminated involuntarily:

1. in withdrawing the authorisation of the management company to organize and manage the Fund;

2. where, within three months after the withdrawal of the licence, dissolution or bankruptcy of the asset management company it has chosen a new management company or the Fund shall not be transformed through a merger or acquisition.

(3) after the entry into force of the decision on the withdrawal of the authorisation of an investment company, the Commission shall forward it to the registry for entry in the commercial register and the appointment of a liquidator.

(4) the President may order checks and compulsory administrative measures applicable to deletion of an investment company from the commercial register and the final settlement of relations with holders of shares.

(5) the conditions and procedure for termination of an investment company and mutual fund shall be determined by Decree.

FOURTH TITLE

PROVISION OF INFORMATION TO THE EUROPEAN COMMISSION IN CONNECTION WITH THE ACTIVITIES OF MANAGEMENT COMPANIES IN THIRD COUNTRIES. COOPERATION WITH THE COMPETENT AUTHORITIES OF THE MEMBER STATES

Art. 158. (1) the Commission shall inform the European Commission for substantial difficulties encountered for management companies, for which the Republic of Bulgaria is a Member State of origin, where their establishment or provision of services and activities in a third country.


(2) at the request of the European Commission the Commission limited or suspended for a period of up to three months the issue of authorisations for the performance of the described activity on the territory of the Republic of Bulgaria by the management companies of a third country, as well as the proceedings in connection with the acquisition of holdings by direct or indirect parent undertakings governed by the laws of that third country. The decision of the Council of the European Union, this period may be extended.

(3) paragraph 2 shall not apply in respect of a subsidiary of a management company, authorised to carry out activities in the framework of the European Union, or a subsidiary of such subsidiary.

(4) at the request of the European Commission, in cases where a third country does not provide the management company of a Member State carrying out the activity in market conditions equivalent to those of the European Union law ensures management companies from that third country, or where a third country does not provide national treatment mode when performing the activity on its territory by the management companies of a Member State the Commission shall notify it of any:

1. an application for the issuance of a license to manage lâvaŝo a company which appears to be a direct or indirect subsidiary of a parent undertaking governed by the laws of that third country;

2. notification of a parent undertaking governed by the laws of that third country and intends to acquire a holding in a management company for which the Republic of Bulgaria is a Member State of origin as a result of which the management company becomes a subsidiary of that parent.

(5) the notification under paragraph 1. 4 is suspended after an agreement between the European Union and third country for the provision of the third State of conditions for carrying out the activities of management companies of the European Union, equivalent to the conditions that ensure the management companies of that third State for the granting of national treatment mode, or after the expiry of the time limit referred to in paragraph 1. 2.

Art. 159. (1) the Commission shall cooperate with the competent authorities of the other Member States in the exercise of supervisory powers under this Act and the instruments for its implementation and, where necessary, assist these authorities in the exercise of their supervisory powers.

(2) in the implementation of the cooperation referred to in paragraph 1. 1 the Commission used its powers conferred by law in cases where the operation – subject to investigation by the competent authorities of the other Member States, does not constitute an infringement of the legislation of the Republic of Bulgaria.

Art. 160. the Commission shall provide information to the competent authority of another Member State, where this information is necessary for the exercise of the powers conferred on it by Directive 2009/65/EC.

Art. 161. (1) where the Commission has reason to suspect that the person on whose activity does not exercise supervisory powers, carry out, or has carried out on the territory of another Member State in breach of the requirements of the directive 2009/65/EC, it shall inform the competent supervisory authority of the Member State concerned.

(2) where the Commission is informed by the competent authority of a Member State, that the person on whose activities the authority does not exercise supervisory powers, carry out, or has carried out on the territory of the Republic of Bulgaria a violation of the requirements of the directive 2009/65/EC, the Commission shall take the necessary measures and inform the competent authority of the Member State of the results of them.

Art. 162. (1) in the course of surveillance activities, including performance when done on-the-spot checks or investigation in the territory of a Member State, the Commission may request the assistance of the relevant competent authority in that State.

(2) when the Commission requested by the competent authority of the Member State carrying out the inspection or investigation in the territory of that State and the competent authority decides to carry out the verification or investigation independently, the Commission may ask its experts to accompany the experts of the competent authority in carrying out the verification or investigation.

Art. 163. (1) on request by a competent authority of a Member State to carry out on-the-spot verification or an investigation on the territory of the Republic of Bulgaria, the Commission in the framework of its powers:

1. carry out the verification or investigation;

2. carrying out the verification or investigation by the competent authority of the other Member State;

3. allow the inspection or investigation by auditors or experts.

(2) in the cases referred to in para. 1, item 1 at the request of the competent authority of the other Member State in carrying out the verification or investigation officials of the Commission shall be accompanied by the officials of the competent authority. Regardless of the control over carrying out the verification or investigation is carried out by the competent authorities in the Republic of Bulgaria.

(3) in the cases referred to in para. 1. the Commission may require in carrying out the verification or investigation officials of the competent authority of the other Member State to be accompanied by officials of the Commission.

Art. 164. (1) the Commission may refuse to provide information referred to in art. 160 or assistance in carrying out on-the-spot verification or an investigation under art. 163 when:


1. carrying out on-the-spot verification or an investigation and the provision of information might adversely affect the sovereignty, security or public order of the Republic of Bulgaria;

2. opened proceedings before the judicial bodies in the Republic of Bulgaria in respect of the same actions and persons in respect of which assistance is requested;

3. There is a court decision which has entered into force in the Republic of Bulgaria in respect of the same actions and persons in respect of which the assistance is requested.

(2) in the cases referred to in para. 1 the Commission shall inform the authority requested assistance, and provide detailed information on the reasons for the refusal.

Art. 165. the Commission may send a signal to the European Securities and markets authority in cases where the request of the Commission for the exchange of information pursuant to art. 166-169, of carrying out an investigation or on-the-spot check in accordance with art. 170 or its staff request accompany the officials of the competent authority of another Member State in carrying out an investigation or on-the-spot verification has been rejected or has not been acted upon within a reasonable time.

Art. 166. (1) where the management company originating in the Republic of Bulgaria through a branch or under the freedom to provide services operates in the territory of one or more Member States, the Commission shall cooperate with the competent authorities of those States. The Commission shall cooperate, including in order to ensure the collection of information by the competent authorities under art. 124, para. 2 and 3.

(2) If a management company originating in another Member State under conditions of freedom to provide services or through a branch carried out an activity in the territory of the Republic of Bulgaria and in the territory of one or more Member States, the Commission shall cooperate with the competent authorities in these countries.

(3) in the cases referred to in para. 1 and 2, the Commission may request the competent authorities of the Member States and shall provide upon request all information related to the management and structure of the property management company which may facilitate the implementation of its supervisory powers.

Art. 167. where the management company originating in another Member State carries on business in the territory of the Republic of Bulgaria, the Commission shall inform the competent authorities of that State for the applied by it in respect of the company in the cases under art. 124, para. 2 and 3 compulsory administrative measures or administrative penalties imposed.

Art. 168. When a management company, originating in the Republic of Bulgaria manages collective investment scheme originating in another Member State, the Commission shall immediately inform the competent authorities of that Member State for any breach of the provisions of this law and its implementing acts or any other problems that it found in the activity of the management company and which may affect the company's ability to perform his duties in the management of the scheme.

Art. 169. where the Republic of Bulgaria is a Member State of origin of the collective investment scheme managed by the management company originating in another Member State, the Commission shall without delay inform the competent authority of that State for the problems found in the operation of the scheme and that may affect the ability of the management company to perform his duties.

Art. 170. where the Republic of Bulgaria is the host Member State for a management company who carries out the activity in its territory through a branch, the Commission, after having been informed by the competent authority of that Member State cooperating on this body, where he carried out personally or through intermediaries on-the-spot verification of the information referred to in art. 166-169.

PART THREE

OTHER COLLECTIVE INVESTMENT UNDERTAKINGS

TITLE FIRST

AN INVESTMENT COMPANY OF CLOSED TYPE

Chapter fifteen.

GENERAL

Art. 171. (1) the investment company of closed type is an undertaking for collective investment, organized as a joint stock company, with the object of investing in securities and other liquid financial assets of funds raised through the public offering of shares, which operates on the principle of risk spreading and whose shares are not subject to redemption except under the conditions and pursuant to the commercial code.

(2) the investment company of closed type does not have the right to carry out any other business, except where this is necessary for the conduct of the activity under para. 1. (3) the investment company of closed type is created only on the constituent Assembly.

(4) the investment company of closed type issued only cashless shares with one vote. The company may issue bonds and other debt securities.

Art. 172. In addition to the data required under the commercial law, the statutes of incorporation of closed type must contain: 1. the main aims and limits of investment activity, as well as the investment policy of the investment company;

2. the share of investments by types of assets;

3. remuneration and the methods for calculating the remuneration of the management company, according to members of the management and supervisory authority;

4. the allocation of rights and obligations between the managing body of the company and the management company;

5. the conditions for the replacement of the depository bank and the rules for ensuring the interests of the shareholders in the event of such substitution;


6. the conditions for the replacement of the management company and the rules for ensuring the interests of the shareholders in the event of such substitution;

7. modalities for the allocation of dividends.

Art. 173. A change in the statutes, the rules of risk management in the rules for the evaluation of the portfolio and the custody agreement, replacing the depository bank and the management company, as well as the return of an investment consultant with management company and vice versa shall be allowed after approval of the Vice-President. In such cases, the provisions of art. 18, al. 2-7.

Art. 174. (1) the subscribed capital of the investment company of closed type may not be less than EUR 500 000. In respect of the capital of the investment company of closed type and apply the provisions of art. 7, para. 2 and 3.

(2) the investment company of closed type shall at all times hold own funds in an amount of not less than 500 000 BGN, whose structure and relation to balance-sheet assets and liabilities of the company shall be determined by Decree.

Art. 175. (1) the activities under art. 171, para. 1 of the investment company of closed type is managed by a management company under contract or by the management organ.

(2) if the work of art. 171, para. 1 of the investment company of closed type is managed by its governing body, the company concluded a contract with the person under art. 12 of the law on markets in financial instruments, which have the right to carry out investment advice.

Art. 176. (1) where a work of art. 171, para. 1 of the investment company of zat vorenus type is managed by its governing body, the members of the management or control body of the company must comply with the requirements of art. 93.

(2) where the work of art. 171, para. 1 of the investment company of closed type is managed by a management company, any person selected as a member of the management or control body of the company, you must not:

1. convicted for crimes against property, against the holding or against financial, tax and social security system carried out in the Republic of Bulgaria or abroad, unless it was vindicated;

2. any member of the management or supervisory authority or a member having unlimited liability in the company's bankruptcy proceedings, openly or in closed due to bankruptcy a company if you are left unsatisfied creditors;

3. declared bankrupt or is in bankruptcy proceedings;

4. spouse or relative in a straight or collateral relatives up to the third degree inclusive, or by affinity up to the third degree with another Member of the management or control body of the company;

5. deprived of right to materialnootgovorna loan Office.

(3) the requirements of paragraphs 1 and 2. 1 shall also apply to natural persons who constitute legal entities – the members of the management or control body of the investment company.

(4) the requirements of paragraphs 1 and 2. 1 shall also apply to all other persons, who may conclude solely or jointly with another person trades on behalf of the investment company.

(5) the circumstances referred to in paragraph 1. 1, item 1 shall be certified by a certificate of conviction, respectively with the equivalent document, and under para. 1, item 2-5 shall be certified by a declaration.

(6) the persons referred to in para. 1 – 4 shall notify the Commission of any change in the circumstances of them declared under para. 1 within three business days of the change.

Art. 177. with regard to ways of preserving the assets of the investment company of closed type apply absolute kvaniâta to the depository bank in Chapter five, as well as the relevant provisions in this chapter concerning the duties and scope of responsibilities.

Art. 178. (1) an investment company of closed type must lodge an application for the admission of its shares to trading on a regulated market within 6 months from the entry in the commercial register.

(2) if the shares of the investment company of closed type are not admitted to trading on a regulated market within one year of the entry in the commercial register, the company to liquidate under conditions and in accordance with procedures laid down by Ordinance.

Chapter sixteen

ISSUE AND WITHDRAWAL OF AUTHORISATION FOR THE CARRYING OUT OF THE ACTIVITY

Art. 179. (1) for carrying out the activity as an investment company of closed type is required to be issued a license from the Commission.

(2) for the issuance of a license for carrying out the activity as an investment company of closed type an application shall be submitted to the Commission by the Deputy Chairman designated by the master, to whom shall apply:

1. the statutes;

2. data for the subscribed and paid-up capital;

3. data and other necessary documents for the members of the management and supervisory body of the investment company, according to individuals who represent entities, members of its management and supervisory authority or other persons empowered to manage and represent, as well as for their professional qualifications and experience;

4. the contract with the management company, respectively the person under art. 12 of the law on markets in financial instruments directive and the Treaty of Depositary services;


5. the names and particulars of persons who directly or indirectly own 10 or over 10 percent of the shares with voting rights of the applicant or may exercise control over it, and the number of their votes; individuals submit written declarations regarding the origin of the funds from which contributions are made against subscriptions of shares, including whether funds are borrowed, and the taxes paid by them in the last 5 years in a form approved by the Deputy Chairman;

6. rules for the valuation of the portfolio;

7. the prospectus of the investment company;

8. rules for risk management;

9. other documents and particulars laid down by Ordinance.

(3) nobody has the right to carry on business under art. 171, para. 1 without has received the license.

(4) a person who does not hold a licence to carry on an activity referred to in art. 171, para. 1 in accordance with the requirements of this law, may not use in its name in advertising or other activity the words "investment company of closed type" or other equivalent words in Bulgarian or foreign language, denoting the conduct of such activity.

Art. 180. (1) the Commission shall refuse to issue a license to perform activities such as investment company of closed type, if:

1. the statutes of the company does not comply with the law;

2. the subscribed capital shall not meet the absolute kvaniâta of art. 174, para. 1;

3. the contract with the management company does not meet the requirements of the law and its implementing acts;

4. the contract is presented not with a person under art. 12 of the law on markets in financial instruments;

5. the members of the management or supervisory authority does not comply with the requirements of art. 176;

6. persons who hold, directly or indirectly, 10 and more than 10 percent of the votes in the general meeting of the investment company, with the activity or the impact on decision making can harm the security of investments;

7. persons who hold, directly or indirectly, 10 and more than 10 percent of the votes in the General Assembly, have made contributions with borrowed funds;

8. the depository bank or the Bank depositary does not meet the requirements of the law or its implementing acts;

9. the prospectus of the investment družes-graphs do not comply with the requirements of the law and its implementing acts;

10. in accordance with the law or the statutes the investment company may not offer their shares to the territory of the Republic of Bulgaria;

11. are not sufficiently insured interests of investors;

12. the management company is not originating in the Republic of Bulgaria.

(2) in the cases referred to in para. 1, item 1 – 5, 8 and 9, the Commission may refuse to issue a licence only if the applicant has not remedied any deficiencies or has not provided the required documents within a period specified by the Office, which may not be less than one month.

(3) the refusal of the Commission be motivated in writing.

(4) the applicant may make a new request for the issuance of a license not earlier than 6 months from the entry into force of the decision of refusal.

Art. 181. (1) the registry Agency entered an investment company in the trade register, be submitted after the relevant licence issued by the Commission.

(2) the investment company shall notify to the Commission for registration within 7 days of the transfer.

Art. 182. (1) for the revocation of a license for carrying out the activity as an investment company of closed type applies to art. 19, para. 1, item 1, 3, 4 and 6. The Commission takes the license and when the investment company of closed type ceases to be a public company under art. 119, para. 1, item 3 and 4 of the law on public offering of securities.

(2) after the entry into force of the decision on the withdrawal of the licence to perform the activity as an investment company of closed type it can continue to exist as a joint stock company under the Commerce Act. The Commission shall forward the decision to the registry Agency for deletion of the object of his activity as an investment company.

Chapter Seventeen

REQUIREMENTS FOR THE ACTIVITIES OF THE INVESTMENT COMPANY OF CLOSED TYPE

Art. 183. (1) the public offering of shares of the investment company of closed type is carried out after the issuance of the license and the publication of a prospectus.

(2) the prospectus of the investment company of closed type shall be drawn up and published in accordance with Chapter vi of the law on public offering of securities.

(3) the investment company of closed type compile marketing communications in relation to the offered shares in applying respectively art. 65, para. 1 and 2.

Art. 184. As regards the rules for the risk management of investment company of closed type and requirements for notification to the Commission periodically apply art. 40 and 41.

Art. 185. (1) For the investment company of closed type apply investment restrictions under art. 38.

(2) incorporation of zat vorenus type may not invest more than 25 percent of their assets in securities and money market instruments issued by an issuer.

(3) upon violation of the investment restrictions under para. 1 and 2 investment company of closed type is required within 7 days of infringement to inform the Commission, giving details of the reasons for its occurrence and the measures taken for its elimination.

(4) where the activity under art. 171, para. 1 of the investment company of closed type is managed by its governing body, it may acquire movable and immovable property only insofar as this is relevant to the direct conduct of its activities.

Art. 186. The investment company of closed type may not:


1. to sell securities, money market instruments and other financial instruments under art. 38, para. 1, item 5, 7, 9, who owns an investment company;

2. to invest in securities issued by:

a) founders or related persons for a period of two years from the formation of the investment company;

(b)) persons as control an investment company, or persons associated with them.

Art. 187. For investment company of closed type and apply restrictions under art. 28 and 31.

Art. 188. The investment company could not use the loans. The President may allow an investment firm to use a loan worth up to 15 percent of its assets, if the loan is for a period not exceeding 6 months and is required for the acquisition of assets. In this case apply art. 18, al. 2-6.

Art. 189. The investment company of closed type adopt rules concerning the personal transactions of the members of the management and supervisory body of the company to ensure that it will not be concluded personal transactions or investments supported by these individuals, allowing them together or separately to exercise significant influence over the issuer, or which would lead to a conflict of interest, or are the result of misuse of information they have acquired in connection with his professional activity within the meaning of the law against market abuse in financial instruments.

Art. 190. The investment company of closed type disclose information pursuant to Chapter vi of the law for public offering of securities.

Art. 191. other requirements for the activity, the structure of assets and liabilities of the investment company of the closed type, aimed at protecting investors ' interests, the annual and interim financial statements for the business and their distribution, maintenance and preservation of the records, the manner and the procedure for the assessment of the assets and liabilities, disclosure of information, the content of marketing communications in relation to the shares of the investment company of closed type the rules for personal transactions, the rules for preventing conflicts of interest, risk management policy, the rules for the valuation of the portfolio, the contents of the contracts with the management company and the depositary bank shall be determined by Decree.

Art. 192. The outstanding cases respectively, shall apply the provisions of chapters 8 and 11 of the law on public offering of securities.

Chapter eighteen

TRANSFORMATION AND TERMINATION

Art. 193. (1) the investment company of closed type cannot be converted to any other type of company, as well as to change its objects of activity.

(2) conversion of investment company of closed type in a collective investment scheme is carried out only with the permission of the Commission. Transforming through merger and acquisition, Division and separation, as well as the termination of the investment company of closed type is carried out with the permission of the Commission. After the entry into force of the decision on the withdrawal of the authorisation of an investment company, the Commission shall forward it to the registry for entry in the commercial register and, in the hear-ratâvane of the investment company and the appointment of a liquidator. Article 23 of the law on markets in financial instruments shall apply accordingly.

(3) for authorisation under paragraph 1. 2 apply art. 144.

(4) under subsection Conversions. 2, as well as the termination of the investment company of closed type shall be carried out under the conditions and in accordance with procedures provided for in the Ordinance.

Second partition

SPECIAL PURPOSE COMPANIES

Art. 194. an undertaking to guarantee collective and investing is a special purpose entity, the activities of which is governed by the law on investment companies.

PART FOUR

COMPULSORY ADMINISTRATIVE MEASURES AND ADMINISTRATIVNONAKAZATELNA RESPONSIBILITY

Chapter nineteen

COMPULSORY ADMINISTRATIVE MEASURES

Art. 195. (1) where it finds that the supervised entities, their agents, persons under contract perform managerial functions or enter into transactions for the account of the supervised persons and persons having a qualifying holding in a management company are carried out or act in violation of this law, of the instruments for its implementation, the decisions of the Commission or the Deputy Chairman, as well as prevent the exercise of control by the Commission or the Deputy Chairman or the investors ' interests are threatened Accordingly, the Commission, the Vice-President may:

1. to oblige them to take measures needed for the prevention and removal of distortions, the harmful consequences or of danger to the interests of the investors, within such period as it may specify;

2. the agenda set out by the Commission to convene a general meeting and/or to schedule a meeting of management or of the supervisory authorities of the controlled by her party for making decisions on the measures to be taken;

3. to inform the public about an activity that threatens the interests of investors;

4. to stop for up to 10 consecutive working days, or to stop a final sale or execution of transactions with shares of collective investment scheme;

5. to order in writing to the person podnadzorno to release one or more persons empowered to manage and represent the person concerned, and to take management and representative rights to his release;

6. to appoint the Quaestors in the cases provided for in this Act;


7. to appoint a registered auditor to carry out financial or other verification in accordance with the requirements set out by the Deputy Chairman of the podnadzorno person, with costs are at the expense of the inspected person;

8. to take a decision to suspend the redemption of units of a collective investment scheme.

(2) the Compulsory administrative measure is also the withdrawal of the license, permission, to carry out the activities provided for in this law, except in cases where the person has expressly waived the issued license, permission, respectively.

(3) where it finds that the depositary bank operates in contravention of this Act or of the instruments for its implementation, the Vice-President may apply the measures referred to in paragraph 1. 1, item 1, as well as to offer to the Bulgarian National Bank, the application of appropriate measures under art. 103, para. 2 of the law on credit institutions. The Bulgarian National Bank is obliged to inform the President of his decision within one month of receipt of the proposal.

(4) the President may propose to the Bulgarian National Bank to take away the license of depositary bank only if the depository bank systematically violates the provisions of this law or its implementing acts.

(5) at the request of the Commission, respectively by the Vice-President with the registry agency fits the circumstances accordingly declared the acts under paragraph 1. 1 in the commercial register.

Art. 196. (1) the proceedings on the application of administrative coercive measures began on the initiative of Vice-President, and in the cases under art. 195, para. 1, item 5 and 6 – on the initiative of the Commission.

(2) notifications and s″obŝavaniâta in al. 1 and may be made by registered letter with advice of delivery, telegram, telephone, telex, fax or by email. Notifications and s″obŝavaniâta by registered letter with acknowledgement of receipt or by telegram shall be certified with a notice of delivery, on the phone – in writing by an official who has committed them, by telex, fax or e-mail – with written confirmation of a sent message.

(3) If notifications and s″obŝavaniâta in al. 1 are not accepted by the persons mentioned or recorded in register concerned under art. 30, para. 1 of the Act on the financial supervision Commission address, telephone, telex, fax or electronic mail, notifications and s″obŝavaniâta are believed to be carried out by placing them on a special place in the premises of the Commission. The last circumstance shall be certified by a Protocol drawn up by officials designated by order of the Vice-President.

(4) Compulsory administrative measures under art. 195, para. 1, item 1 – 4, 7 and 8 shall apply with a reasoned decision in writing to the Vice-President, enforcement measures under art. 195, para. 1, item 5 and 6 – with a written reasoned decision of the Commission, which shall be communicated to the person concerned within 7 days of its issuance.

Art. 197. the decision to implement a compulsory administrative measure shall be subject to immediate execution regardless if it is appealed.

Art. 198. as far as in this chapter are not provided for special rules shall apply the relevant provisions of the administrative code.

Chapter twenty

QUAESTOR

Art. 199. (1) the Commission may appoint the investment company and the management company one or several liquidators from a list approved by the Commission:

1. in deciding on the application of the measure referred to in art. 195, para. 1, item 1 or 5 for up to 6 months, or 2. upon the withdrawal of the licence to perform the activity – the appointment of a liquidator, trustee, respectively.

(2) If at the end of the 6-month period under paragraph 1. 1, item 1 is not revoked the license for carrying out the business of the company, the powers of the invigilator shall be terminated and the rights of the organs of the company shall be refunded.

(3) the Commission may at any time terminate the powers of Conservator and appoint another in his place. The Act is not subject to appeal.

Art. 200. (1) the Proctor is a natural person.

(2) the Proctor must conform to the requirements of art. 93, para. 1, item 1, 2 and 6, as well as to:

1. is not a sole trader or a member of a management or supervisory authority or a member having unlimited liability in the company or cooperative, opened insolvency proceedings or terminated because of bankruptcy, if you are left unsatisfied creditors;

2. There is no nev″zstanoven in your rights viable debtor;

3. There is no spouse, relative in the direct or collateral relatives within sixth degree or by marriage to a third degree member of the governing body of the person referred to in art. 199, para. 1, whose powers are suspended with the appointment of a conservator;

4. no lies with the person under art. 199, para. 1 or his debt in ways that give rise to reasonable doubt its impartiality.

(3) the Proctor declares in writing to the Commission the circumstances under para. 2. He is obliged to notify the Commission immediately of a change in the circumstances.

Art. 201. (1) after the issue of the appointment of the Commission served him Quaestor immediately to the person under art. 199, para. 1 and publish at least one central daily.

(2) with the appointment of Quaestor and all the powers of the supervisory management board, respectively, of the Board of Directors of the person referred to in art. 199, para. 1 shall be suspended and shall be exercised by the invigilator, in so far as the Act of appointment not provided for restrictions. The Proctor will take all necessary measures to protect the interests of investors.


(3) during the reign of the invigilator the general meeting of shareholders may be convened only by the invigilator and to take a decision on the agenda thereof.

(4) actions and transactions carried out in the name and for the account of the person referred to in art. 199, para. 1 without prior authorisation from the invigilator shall be null and void.

(5) If two or more are appointed liquidators, they take decisions unanimously and jointly exercise their powers, unless the Commission decides otherwise.

(6) the Commission may issue compulsory requirements of the Quaestors, in connection with their activities.

(7) the Proctor is accountable only to the Commission and, on request, she shall, without delay, report on its activities.

Art. 202. (1) the Proctor has unlimited access to or control over the premises of the person referred to in art. 199, para. 1, the accounting and other records and his property.

(2) at the request of the Prosecutor's Office and the invigilator the Ministry of internal affairs are obliged to provide assistance for the exercise of implementing powers conferred to him under par. 1.

Art. 203. (1) the Proctor exercised his powers with good care of. He shall be liable only for damage caused by it, intentionally or with gross negligence.

(2) all employees of the person referred to in art. 199, para. 1 are obliged to assist the invigilator in the exercise of its powers.

(3) the Proctor receives remuneration for his work on behalf of the person referred to in art. 199, para. 1, fixed by the Commission.

Chapter twenty one

ADMINISTRATIVNONAKAZATELNA RESPONSIBILITY art. 204. (1) Which perform or allow violation of:

1. Article 6 al. 3, art. 10, para. 5, art. 17, al. 2, art. 18, al. 1, art. 48, para. 3 and 4, art. 52, art. 57, al. 1, 5 – 9, art. 58, para. 2, art. 59, art. 61, para. 1 and 2, art. 62, 63, art. 65, para. 1 and 2, art. 78, para. 4 and 5, art. 79, art. 81, para. 2, art. 91, art. 93, para. 1-5, art. 94, para. 1 and 2, art. 98, para. 2, art. 179, para. 4, art. 181, para. 2 and art. 185, para. 3 or the regulations on the implementation of the law, is punishable by a fine in the amount from 1000 to 4000 BGN;

2. Article 21(2). 9, art. 25, art. 26, al. 1 and 2, art. 34, para. 1 and 3, art. 36, para. 1, art. 51, art. 56, para. 1, art. 57, al. 4, art. 58, para. 1, art. 60, para. 1, art. 64, art. 67, para. 2 and 3, art. 69, para. 5, art. 71, para. 2, art. 72, para. 1, art. 75, para. 1 and 2, art. 77, para. 2, art. 78, para. 1-3, art. 80, art. 82, para. 1, art. 89, art. 92, para. 1-3, art. 100, para. 4, art. 101, para. 2, art. 103, art. 104, para. 1 and 2, art. 105, para. 1, art. 106, para. 1, art. 108, art. 109, para. 1, 7, 8 and 10, art. 110, para. 1, 5 – 8, art. 113, para. 2, 3 and 5, art. 114, para. 1, 4 and 6, art. 116, para. 1, art. 117, para. 1-3, art. 119, para. 1, 2 and 4, art. 120, para. 1 and 5, art. 122, art. 124, para. 3, art. 128, para. 1, art. 130, 131, 132, art. 136, para. 1, 6 and 8, art. 149, art. 151, para. 3, art. 154, para. 3, art. 156, art. 171, para. 2 and 4 and art. 185, para. 4 shall be punishable by a fine of 4000 to 10 000 BGN.;

3. Article 7, para. 7, art. 21, para. 1, 6 and 8, art. 22, para. 1 – 4, art. 27, al. 1, art. 28, para. 1, art. 29, 31, 32, art. 36, para. 3 and 4, art. 38, 40, 41, art. 43, para. 1 and 2, art. 45, para. 1-8 and 10, art. 46, para. 1, art. 47, art. 48, para. 1 and 2, art. 49, para. 1 and 2, art. 53, art. 69, para. 1, art. 75, para. 4, art. 76, art. 81, para. 1, art. 83, art. 86, para. 6 – 8, art. 90, para. 2 – 4, 6, 9 and 10, art. 101, para. 1, art. 102, para. 1 and 2, art. 183, para. 1, art. 185, para. 2, art. 186, 188 and 189, is punishable by a fine in the amount of 10 000 to 20 000.

(2) in the event of a repeated offence under subsection. 1 person liable shall be punished with fine in extend, as follows:

1. for the infringements referred to in paragraph 1. 1, item 1 – from 4000 to 10 000 BGN.;

2. for the infringements referred to in paragraph 1. 1, item 2, from 10 000 to 20 000 BGN.;

3. for offences under para. 1, item 3 – 20 000 to 40 000.

(3) Who carry out or allow violation of art. 6, al. 2, art. 98, para. 1 and art. 179, para. 3, is punishable by a fine, respectively with the penalty payment, in the amount of 20 000 to 200 000.

(4) in the event of non-compliance with a compulsory administrative measure under art. 195, para. 1 the perpetrators and dopustitelite are punishable by fine, penalty, respectively, in the amount of 10 000 to 100 000 LEVs.

(5) for violations under para. 1 the legal persons and the sole traders having penalty payment in the amount, as follows:

1. for the infringements referred to in paragraph 1. 1, item 1 – from 4000 to 10 000 BGN, and for repeated infringement – from 10 000 to 20 000 BGN.;

2. for the infringements referred to in paragraph 1. 1, item 2, from 10 000 to 20 000 BGN, and for repeated infringement – 20 000 to 40 000 BGN.;

3. for offences under para. 1, item 3 – 20 000 to 40 000 BGN, and for repeated infringement – from 40 000 to 100 000 LEVs.

(6) Income acquired by unlawful activities carried out shall be withdrawn in favour of the State, to the extent that cannot be restored to the injured person.

Art. 205. (1) the acts of infringements found under art. 204 shall be drawn up by the Vice-Chairman designated by the officials, and the penal provisions shall be issued by the Deputy Chairman.

(2) the establishment of violations, 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.

ADDITIONAL PROVISIONS

§ 1. For the purposes of the Act:

1. "Member State" means a Member State of the European Union or other State – party to the agreement on the European economic area.

2. "Member State of origin ' means:

a) for management company – the Member State where it has its registered office;

b) for a collective investment scheme – the Member State whose competent authority has granted the license, permission respectively for the carrying out of the activity.

3. "subsidiary" means a subsidiary within the meaning of § 1, item 10 of the additional provisions of the law on the supplementary supervision of financial conglomerates.

4. "units of a collective investment scheme" means financial instruments issued by a collective investment scheme, which express the rights of their holders on its assets. Shares of kolektivna investicionna shema means and shares of kolektivna investicionna shema.

5. "investor" is an investor within the meaning of § 1, item 1 of the additional provisions of the law on public offering of securities.


6. "money-market instruments" means instruments normally dealt in on the money market which are liquid, and whose value can be specified at any time.

7. "qualifying holding" means a direct or indirect holding in a management company which represents 10 or over 10 per cent of the capital or of the voting rights in the General Assembly, determined in accordance with art. 145 and 146 of the law on public offering of securities or that allows for significant influence over the management of the company.

8. "Client" means any natural or legal person and any company, including collective investment scheme whose activities are managed by a management company or who benefit from the services under art. 86, para. 2.9. Branch of management company's place of business which is a part of nepersonificirana management company and offers services for which the management company is authorised.

10. "collective investment scheme" is an enterprise organized as an investment company, mutual fund or unit trust authorized to carry out the activity in accordance with Directive 2009/65/EC.

11. ' Kompetentni authorities "means the authorities designated in each Member State, in accordance with art. 97 of Directive 2009/65/EC. For the Republic of Bulgaria competent authorities are the financial supervision Commission and the Vice-President, supervising Management Oversight of the investment activity ".

12. "Control" means control within the meaning of § 1, item 8 of the additional provisions of the law on the supplementary supervision of financial conglomerates.

13. "net asset value" is the total value of all the assets in the portfolio of a collective investment scheme, minus any debt.

14. "Re" is the infringement committed within one year of the entry into force of the decree by which the offender was punished for the same offence.

15. "fixed costs" are the amount of accrued depreciation, rents, compulsory insurance, taxes and fees for real estate, the salaries of the members of the management and supervisory bodies and other expenses, which do not depend on the scale of their operations.

16. parent undertaking shall mean a parent undertaking within the meaning of § 1, item 9 of the additional provisions of the law on the supplementary supervision of financial conglomerates.

17. ' transferable securities ' shall mean:

a) shares in companies and other securities equivalent to shares;

(b)) bonds or other forms of securitised debt (debt securities);

in) other transferable securities giving the right to acquire transferable securities by subscription or Exchange.

18. "host Member State" means: (a)) for the management company – the Member State which is not a Member State within the meaning of paragraph 2 (a), in which the management company has a branch or provides services;

b) for a collective investment scheme – the Member State which is not a Member State within the meaning of paragraph 2 (b), in which the shares are offered to the collective investment scheme.

19. "holder of the shares" means any natural or legal person who owns one or more shares in a collective investment scheme.

20. "affiliates" are persons within the meaning of § 1, item 25 of the additional provisions of the law on markets in financial instruments.

21. "Systematic violation" occurs when three or more have been carried out administrative violations of the law or of the instruments for its implementation within a year.

22. "durable medium" is a means for providing information to investors, allowing the investor to store information addressed personally to him in a way which allows subsequent acquaintance with her for a period of time adequate for the purposes of providing information and allowing the reproduction of the information stored without changes.

23. "third country" means a State which is not a Member State.

24. financial instruments are financial instruments within the meaning of art. 3 of the law on markets in financial instruments.

§ 2. The law introduces the requirements of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS).

TRANSITIONAL AND FINAL PROVISIONS

§ 3. Collective investment schemes replace short prospectus document with key information to investors under art. 57 before 1 July 2012.

§ 4. Open-end investment companies are required to switch to one-tier governance system by 1 July 2012.

§ 5. Open-end investment companies are required to sell at a price not lower than their market value, their movable and immovable property acquired pursuant to the repealed art. 195, para. 3 of the law on public offering of securities by 1 July 2012.

§ 6. To the preparation of the list under art. 35, para. 1 the list remains in force with the custodians banks under the revoked art. 173, para. 9 of the law on public offering of securities.

§ 7. The financial supervision Commission shall adopt regulations concerning the application of the law.

§ 8. 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, 24 and 42/2009 and no. 43 and 97 from 2010) following amendments and supplements shall be made :


1. In art. 1, al. 2, item 1 the words "investment and management companies" shall be replaced by ' collective investment schemes and investment companies of closed type and manage lâvaŝite companies ", after the words" Law for special purpose companies, "the Union" and "shall be replaced by a comma and add" and the law on the activities of collective investment schemes and of other collective investment undertakings '.

2. In art. 12, paragraph 2, after the words "Law for special purpose companies" a comma and add the "law on the activities of collective investment schemes and of other collective investment undertakings '.

3. In art. 13:

(a)) in the Al. 1:

AA) in paragraph 4, after the words "the law on markets in financial instruments directive" Law "be added to the activities of collective investment schemes and of other collective investment undertakings ' and a comma;

BB) in paragraph 5, after the words "the law on markets in financial instruments directive" Law "be added to the activities of collective investment schemes and of other collective investment undertakings ' and a comma;

BB) in paragraph 6, after the words "the law on markets in financial instruments directive" a comma and add the "law on the activities of collective investment schemes and of other collective investment undertakings ';

yy) in item 8, after the words "the law for public offering of Securities Act" a comma and add the "law on the activities of collective investment schemes and of other collective investment undertakings ';

DD) in item 10, after the words "the law on markets in financial instruments directive" Law "be added to the activities of collective investment schemes and of other collective investment undertakings ' and a comma;

EE) in recital 11, after the words "the law on markets in financial instruments directive" Law "be added to the activities of collective investment schemes and of other collective investment undertakings ' and a comma;

(b)) in the Al. 2, after the words "the law on markets in financial instruments directive" Law "be added to the activities of collective investment schemes and of other collective investment undertakings" and a comma.

4. In art. 15:

(a)) in the Al. 1:

AA) in paragraph 2, after the words "the law for public offering of securities," the Union "and" shall be replaced by a comma, after the words "the law on markets in financial instruments" shall be added "and the law on the activities of collective investment schemes and of other collective investment undertakings ';

BB) in paragraph 3, after the words "the law for public offering of securities," the Union "and" shall be replaced by a comma, after the words "the law on markets in financial instruments" shall be added "and the law on the activities of collective investment schemes and of other collective investment undertakings ';

BB) in paragraph 4, after the words "Chapter 1 of the law on markets in financial instruments directive" a comma and add "in part four, chapter Nineteen of the Act on the activities of collective investment schemes and of other collective investment undertakings ';

yy) in item 5, after the words "in the cases under art. 212, para. 4 of the law on public offering of Securities Act "a comma and add" under art. 195, para. 3 of the Act on the activities of collective investment schemes and other undertakings for collective investment, "and after the words" under art. 212, para. 1, item 1 of the law on public offering of Securities Act "a comma and add" under art. 195, para. 1, item 1 of the law on the activities of collective investment schemes and of other collective investment undertakings ';

DD) in paragraph 6, after the words "the law against market abuse in financial instruments" a comma and add the "law on the activities of collective investment schemes and of other collective investment undertakings ';

EE) in paragraph 7, after the words "the law against market abuse in financial instruments" a comma and add the "law on the activities of collective investment schemes and of other collective investment undertakings ';

Gg) in point 9, the words "investment companies" shall be replaced by ' collective investment schemes and investment companies of closed type ";

HH) in paragraph 15, after the words "the law on markets in financial instruments directive" a comma and add the "law on the activities of collective investment schemes and of other collective investment undertakings ', and the words" regulation and supervision of the securities market ' shall be replaced by ' the regulation and control of the market in financial instruments ";

(b)) in the Al. 2:

AA) in paragraph (a), after the words "the law for public offering of securities," the Union "and" shall be replaced by a comma, after the words "the law on markets in financial instruments" shall be added "and the law on the activities of collective investment schemes and of other collective investment undertakings ';

BB) in (b), the words "the law for public offering of securities" shall be replaced by the "law on the activities of collective investment schemes and of other collective investment undertakings ' and the words ' investment firm ' shall be replaced by" collective investment scheme and investment company of closed type ".

5. In art. 18:

(a)) in the Al. 1:

AA) in paragraph 1, after the words "the law for public offering of Securities Act" is added to the activities of collective investment schemes and of other collective investment undertakings ' and a comma;


BB) in paragraph 6, after the words "the law for public offering of Securities Act" is added to the activities of collective investment schemes and of other collective investment undertakings ' and a comma;

(b)) in the Al. 3, after the words "the law for public offering of Securities Act" is added to the activities of collective investment schemes and of other collective investment undertakings "and a comma.

6. In art. 19, para. 2, paragraph 1, after the words "the law for public offering of Securities Act" is added to the activities of collective investment schemes and of other collective investment undertakings "and a comma.

7. In art. 24, para. 5, paragraph 1, after the words "the law for public offering of Securities Act" is added to the activities of collective investment schemes and of other collective investment undertakings "and a comma.

8. In art. 27, al. 1, paragraph 1, after the words "the law for public offering of Securities Act" is added to the activities of collective investment schemes and of other collective investment undertakings "and a comma.

9. in art. 30, para. 1:

a) point 4 is replaced by the following:

"4. the collective investment schemes;

(b)) in item 5, the words "and managed mutual funds ' shall be deleted;

in) a new item 6:

6. investment companies of closed type; "

d) previous item 6, 7, 8, 9, 10, 11, 12 and 13 shall become item 7, 8, 9, 10, 11, 12, 13 and 14.

§ 9. In the special purpose companies (promulgated, SG. 46 of 2003; amend., SG. 109 of 2003 No. 107 of 2004, no. 34, 80 and 105 of 2006 and no. 52 and 53 of 2007) the following amendments and additions:

1. In art. 9, para. 4, the words "article. 173 of the law on public offering of Securities Act "are replaced by" article. 28 and chapter v of the law on the activities of collective investment schemes and of other collective investment undertakings '.

2. In art. 11, para. 3, paragraph 1, after the words "the law for public offering of Securities Act" a comma and add "of the law on the activities of collective investment schemes and of other collective investment undertakings '.

3. In art. 29, para. 1, the words "Article 177, para. 4 and 5 of the law on public offering of Securities Act "are replaced by" article 144, para. 3 and 4 of the law on the activities of collective investment schemes and of other collective investment undertakings '.

4. In paragraph 2 of the transitional and final provisions, after the words "the law for public offering of Securities Act" a comma and add "of the law on the activities of collective investment schemes and of other collective investment undertakings '.

§ 10. 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 and no. 43 of 2010) the following amendments and additions:

1. In art. 11, para. 2:

a) in item 8, after the words "Law for special purpose companies" a comma and add the "law on the activities of collective investment schemes and of other collective investment undertakings ';

(b)) in item 9, after the words "Law for special purpose companies" a comma and add the "law on the activities of collective investment schemes and of other collective investment undertakings ';

c) in item 10, after the words "the law for public offering of Securities Act" a comma and add the "law on the activities of collective investment schemes and of other collective investment undertakings '.

2. In art. 20:

(a)) in the Al. 1, paragraph 4, after the words "Law for special purpose companies" a comma and add the "law on the activities of collective investment schemes and of other collective investment undertakings ';

(b)) in the Al. 2, paragraph 4, after the words "Law for special purpose companies" a comma and add the "law on the activities of collective investment schemes and of other collective investment undertakings '.

3. In art. 26 in, al. 3, paragraph 2, the words "Directive 85/611/EEC" shall be replaced by "directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ L 302/57 from 17 November 2009), hereinafter referred to as" the directive 2009/65/EC ".

4. In art. 34, para. 3, paragraph 4, the words "Directive 85/611/EEC" shall be replaced by "directive 2009/65/EC".

5. § 1, item 18 of the supplementary provisions, the words "the law for public offering of securities" shall be replaced by the "law on the activities of collective investment schemes and of other collective investment undertakings ' and the words ' Directive 85/611/EEC" shall be replaced by "directive 2009/65/EC".

§ 11. In the law on the supplementary supervision of financial conglomerates (promulgated, SG. 59 06; amend., SG. 52) in § 1 of the additional provisions the following modifications are made:

1. In paragraph 4, the words "article. 202, para. 1 of the law on public offering of Securities Act "are replaced by" article. 86, para. 1 of the law on the activities of collective investment schemes and of other collective investment undertakings '.

2. In paragraph 19 (c), the words "article. 203, para. 1 of the law on public offering of Securities Act "are replaced by" article. 90, para. 1 and 2 of the law on the activities of collective investment schemes and of other collective investment undertakings '.

3. In paragraph 20 (c), the words "the law for public offering of securities" shall be replaced by the "law on the activities of collective investment schemes and of other collective investment undertakings '.


§ 12. 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 and PC. 57 by 2011.) make the following changes and additions:

1. In art. 1, al. 1, item 2, the words "of investment and management companies, as well as the conditions for carrying out these activities" shall be deleted.

2. In art. 77 w, al. 1, item 8, after the words "investment company" a comma and add the "mutual fund".

3. In art. 146:

(a)) in the Al. 2 the words "included in personal investment portfolio, run by him in accordance with art. 202, para. 2, item 1 "shall be replaced by the words" included in the portfolio, run by him in accordance with art. 86, para. 2, paragraph 1, of the Act on the activities of collective investment schemes and of other collective investment undertakings ';

(b)) in the Al. 3, paragraph 2, the words "Directive 85/611/EEC" shall be replaced by "directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ L 302/57 from 17 November 2009), hereinafter referred to as" the directive 2009/65/EC ";

in) in the Al. 5, the words "article. 5 of Directive 85/611/EEC "shall be replaced by" art. 6 of Directive 2009/65/EC ".

4. the fourth Partition "investment companies and MUTUAL FUNDS" with art. 164-211 (l) is repealed.

5. the fifth chapter in title twentieth with art. 216 – 220 shall be repealed.

6. In art. 221 the following modifications are made:

(a)) in the Al. 1:

AA) in paragraph 1 the words "art. 191, para. 4, 7 and 8 and article. 211 k ' shall be deleted;

BB) in paragraph 2, the words "article. 173, para. 12, art. 174, art. 180, para. 3, art. 183, para. 2, art. 184, para. 2, art. 187, para. 4, art. 189, art. 192, para. 3, art. 196, para. 14 and art. 206, para. 2 ' shall be deleted;

BB) in paragraph 3 the words "art. 164, para. 2, art. 168, para. 3, art. 170, para. 1, art. 173, para. 1, first sentence, and al. 5, art. 177, para. 6 and 8, art. 187, para. 3, first sentence, art. 190, art. 191, para. 1 and al. 4, the first sentence of art. 193, para. 9, art. 197, para. 3, art. 200, para. 1, art. 202, para. 9 and 10, art. 210, art. 211, para. 1, 5 and 6, art. 211 b, para. 1, 4, 5 and 6, art. 211 e, para. 2, 3 and 4, art. 211, para. 1, 2 and 3, art. 211 h, para. 1 and 3, art. 211 and, al. 1-3, art. 211 l, al. 1, 2 and 4 shall be deleted;

yy) in item 4 the words "art. 169, art. 170, para. 2, art. 172, art. 173, para. 6, art. 175, art. 176, art. 186, art. 193, para. 1, 5, 6 and 10, art. 194, para. 3 and 5, art. 195, art. 196, para. 1-7, 9-12, art. 197, para. 1, art. 197 b, para. 3 and 5, art. 199, art. 201, para. 2 and 5, art. 202, para. 7 and 8, art. 203, para. 6 "shall be deleted;

(b)) in the Al. 5, the words "article. 184, para. 1 and art. 206, para. 1 ' shall be deleted.

7. § 1 of the additional provisions:

a) in item 1 (c), the words "investment company, mutual fund ' shall be replaced by" collective investment scheme and investment company of closed type ";

b) 22 points, 26, 31, 37, 38 and 39 are repealed.

8. In paragraph 1 of the additional provisions in item 1 is repealed.

§ 13. In the social security code (promulgated, SG. 110; since 1999 decision No 5 of the Constitutional Court from 2000 – 55/2000; amend., no. 64 of 2000; issue 1, 35 and 41 of the 2001, issue 1, 10, 45, 74, 112, 119 and 120 of 2002, no. 8, 42, 67, 95, 112, and 114 from 2003. , PC. 12, 21, 38, 52, 53, 69, 70, 112 and 115 of 2004, PCs. 38, 39, 76, 102, 103, 104 and 105 of the 2005 St. 16, 30, 34, 56, 57, 59 and 68 by 2006; Corr, PCs. 76 of 2006; amend., SG. 80, 82, 95, 102 and 105, 2006, issue. 41, 52, 53, 64, 77, 97, 100, 109 and 113 of 2007, PC. 33, 43, 67, 69, 89, 102 and 109 from 2008, PCs. 23, 25, 35, 41, 42, 93, 95, 99 and 103 of 2009, PCs. 16, 19, 43, 49, 58, 59, 88, 97, 98 and 100 by 2010, the Decision of the Constitutional Court No. 7 of 2011-PCs. 45 by 2011, amend., SG. 60 by 2011) the following modifications are made:

1. In art. 123 in, al. 4, the words "article. 202 of the law on public offering of Securities Act "are replaced by" article. 86 of the Act on the activities of collective investment schemes and of other collective investment undertakings '.

2. In art. 176, para. 1, item 10, the words "the law for public offering of securities" shall be replaced by the "law on the activities of collective investment schemes and of other collective investment undertakings '.

3. § 1, para. 2, item 16 of the supplementary provision the words "§ 1, item 26 of the additional provisions of the law on public offering of securities" shall be replaced by the words "§ 1, item 10 of the additional provisions of the law on the activities of collective investment schemes and of other collective investment undertakings '.

§ 14. In the law on corporate income tax (official SG. 105 of 2006; amend., SG. 52, 108 and 110 since 2007, no. 69 and 106 since 2008, 32/35 and 95 of 2009, 94/2010 and 19/31, 35 and 51 from 2011) is hereby amended as follows:

1. In art. 174 the words "licensed investment companies of closed type under the law for public offering of securities" shall be replaced by the words "licensed investment companies of closed type under the law on the activities of collective investment schemes and of other collective investment undertakings '.

2. § 1, item 26 (c) of the supplementary provisions, the words "the law for public offering of securities" shall be replaced by the "law on the activities of collective investment schemes and of other collective investment undertakings '.

§ 15. In the insurance code (promulgated, SG. 103 from 2005; amend., SG. 105 by 2005, issue 30, 33, 34, 54, 59, 80, 82 and 105 of 2006, issue 48, 53, 97, 100 and 109 from the 2007 No. 67 and 69 by 2008, 24 and 41/2009 issue 19, 41, 43, 86 and 100 by 2010 and no. 51 and 60 by 2011) the following amendments and supplements shall be made :

1. In art. 73, para. 1 item 3 shall be replaced by the following: "3. the units issued by collective investment schemes, and shares of investment companies of closed type under the law on the activities of collective investment schemes and other undertakings for collective investment, as well as the shares of collective investment schemes based in another Member State;".

2. In art. 185:

a) a new para. 4:


"(4) in the offering of life insurance under para. 1, item 9, relating to the investment in units of a collective investment scheme, or with the advice of a customer in connection with such insurance the insurer provided under art. 59, para. 3 of the Act on the activities of collective investment schemes and of other collective investment undertakings document with key information for investors of their clients. ";

(b)) the current al. 4 it al. 5 and in her words "para. 1 or 3 "shall be replaced by" para. 1 and 4 or al. 3 ";

in the past) Al. 5 it al. 6 and in her words "para. 1-4 "shall be replaced by" para. 1-5 ".

3. In annex 1, section I, point 3, the words "the law for public offering of securities" shall be replaced by the "law on the activities of collective investment schemes and of other collective investment undertakings '.

§ 16. In the tax-insurance procedure code (official SG. 105 by 2005; amend., SG. 30, 33, 34, 59, 63, 73, 80, 82, 86, 95 and 105 of 2006, issue 46, 52, 53, 57, 59, 108 and 109 in 2007, 36/69 and 98 in 2008, issue 12, 32, 41 and 93 from 2009, issue 15, 94, 98 , 100 and 101 of 2010 and PC. 14 and 31 of 2011.) in art. 143 p, al. 2 the words "the law for public offering of securities" shall be replaced by the "law on the activities of collective investment schemes and of other collective investment undertakings '.

§ 17. In the law on financial collateral agreements (official SG. 68 of 2006; amend., issue 24 of 2009 and no. 101 of 2010) is hereby amended as follows:

1. In art. 3, al. 1 item 9 shall be replaced by the following: "9. the collective investment scheme and investment company of closed type;".

2. In art. 4, al. 3, paragraph 2, the words "in stocks and shares" shall be replaced by "shares".

§ 18. In the Act of gambling (official SG. 51 of 1999; amend., no. 103 of 1999, 53/2000, issue 1, 102 and 110 since 2001, 75/2002, no. 31 of 2003, no. 70 by 2004, issue 79, 94, 95, 103 and 105 of 2005, no. 30 and 54 since 2006. , PC. 109 and 110 since 2007, PCs. 42, 74 and 82 from 2009, PCs. 50 by 2010 and PC. 35 and 60 by 2011) in art. 70, after the words "investment company" is added "management company".

§ 19. In the law on electronic commerce (official SG. 51 2006; amend., 105/2006, no. 41 of 2007 and 82/2009) in art. 19, para. 3, paragraph 4, the words "securities issued by investment companies and mutual funds for collective investment" are replaced by "shares".

§ 20. In the value added tax Act (promulgated, SG. 63 06; amend., SG. 86, 105 and 108 of 2006; the Decision the Constitutional Court No 7 of 2007 – issue 37 of 2007; amend., SG. 41, 52, 59, 108 and 113 in 2007, 106/2008 12/23, 74 and 95 from 2009. , PC. 94 and 100 by 2010 and PC. 19 of 2011.) in art. 46, para. 1, item 6, the words "the law for public offering of securities" shall be replaced by the "law on the activities of collective investment schemes and of other collective investment undertakings '.

§ 21. In the law for the administrative offences and sanctions (official SG. 92, 1969; amend., 54/1978, no. 28 of 1982, no. 28 and 101 of 1983, no. 89 of 1986, no. 24, 1987, no. 94 of 1990 No. 105 of 1991 No. 59 of 1992, no. 102 of 1995. , PC. 12 and 110 of the 1996 issue. 11, 15, 59, 85 and 89 of 1998, PCs. 51, 67 and 114 in 1999, St. 92 of 2000 PCs. 25, 61 and 101 in 2002, PCs. 96 of 2004, PCs. 39 and 79 since 2005, PCs. 30, 33, 69 and 108 of 2006, St. 51, 59 and 97 of 2007, PC. 12, 27 and 32 from 2009 and PCs. 10, 33, 39 and 60 by 2011) in art. 34, para. 1. in the second sentence, after the words "securities" comma and added "the law on markets in financial instruments, the law on investment companies, the law against market abuse in financial instruments, the law on the activities of collective investment schemes and other undertakings for collective investment, part two, part two and part three of the social security code."

§ 22. In the law on credit institutions (official SG. 59 06; amend., 105/2006, no. 52, 59 and 109 from the 2007 No. 69 since 2008, no. 23, 24, 44, 93 and 95 of 2009 and no. 94 and 101 of 2010) in art. 57 Al is created. 5: "(5) where a bank offers deposits, whose interest rate is tied to the profitability of an investment in the units of a collective investment scheme, or advise clients in connection with such deposit, it provides pursuant to art. 59, para. 3 of the Act on the activities of collective investment schemes and of other collective investment undertakings document with key information for investors of their customers. Upon finding a violation in the first sentence of the Bulgarian National Bank shall inform the Commission of financial supervision. "

The law was adopted by 41-Otto National Assembly on 20 September 2011 and is stamped with the official seal of the National Assembly.

President of the National Assembly Tsetska Tsacheva:

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