закон на английски

[yank]

Може ли някой да ми помогне да намеря Закона за кредитните институции на английски език.
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[angel_angelov]

Credit Institutions Act
Promulgated, State Gazette No. 59/21.07.2006, effective on the day of entry into force of the EU Treaty of Accession of the Republic of Bulgaria
Text in Bulgarian: Закон за кредитните институции


Chapter One

GENERAL PROVISIONS

Article 1. (1) This Act shall lay down the terms and procedures for authorisation (licensing), taking up and pursuit of the business, supervision and winding up of credit institutions in order to ensure a sound, reliable and secure banking system and safeguard the interests of depositors.

(2) Credit institutions shall be banks and electronic money institutions.


(3) The provisions of this Act shall furthermore apply, mutatis mutandis, to banks established by express law, in so far as otherwise provided by such law.

Article 2. (1) A bank shall be a legal person engaged in the business of receiving deposits or other repayable funds from the public and granting credits or other financing for its own account and at its own risk.

(2) A bank may also carry on the following activities, provided that they are included in its authorisation (license):


1. non-cash transfers and other forms of non-cash payments such as letter of credit and cash collection;


2. issue and administration of means of payment such as electronic payment instruments, travellers' cheques;


3. acceptance of valuables on deposit;


4. activity as a depository or trustee institution;


5. funds transfers outside the cases of subparagraph 1;


6. financial leasing;


7. guarantee transactions;


8. trading for own account or for account of customers in:


(a) money market instruments - cheques, bills, certificates of deposit, etc.


(b) foreign exchange and precious metals;


(c) financial futures, options, exchange and interest-rate instruments as well as other derivative instruments;


9. trading for own account or for account of customers in transferable securities, participation in securities issues and other services and activities under Article 54 (2) and (3) of the Public Offering of Securities Act ;


10. financial broking;


11. portfolio investment advice;


12. purchase of accounts receivable arising from the supply of goods or the provision of services and assumption of the risk of collection of such receivables (factoring);


13. acquisition and management of participating interests;


14. safe custody services;


15. collection, provision of information and reference on customer creditworthiness;


16. any other activities as may be specified by an ordinance of the Bulgarian National Bank (BNB).


(3) The acquisition, repayment and trading in government securities shall be carried on in accordance with the terms and procedure of the Government Debt Act .


(4) No bank may, acting by the nature of trade thereof, carry on any other activities other than those specified in paragraphs 1 and 2, save where this is necessary in connection with the pursuit of the business thereof or in the process of collection of receivables thereof on credits as granted. A bank may not establish or acquire undertakings for the purpose of carrying on ancillary services.


(5) Receiving of deposits or other repayable funds from the public as well as the services under subparagraphs 1 to 4 of paragraph 2 may be carried on solely by:


1. a person which has been granted a bank licence (authorisation) by the BNB;


2. a bank whereof the registered office is in a third country, which has been granted a licence (authorisation) by the BNB to conduct banking business in the Republic of Bulgaria through a branch;


3. a bank which has been granted a licence (authorisation) for conduct of banking business by the competent bodies of a Member State, which provides services directly or through a branch within the territory of the Republic of Bulgaria.


(6) In addition to banks, electronic money may be issued by electronic money companies which:


1. have been granted a licence (authorisation) by the BNB;


2. have been granted a licence (authorisation) by the competent authorities of a Member State and provide services, directly or through a branch, within the territory of the Republic of Bulgaria.

Article 3. (1) A financial institution shall be a person other than a credit institution whereof the principal business shall be the carrying on of one or more of the activities specified in Article 2 (2), subparagraphs 5 - 14 and the granting of credits with funds which have not been raised from receiving deposits or other repayable funds from the public.

(2) In so far as otherwise provided by law, no authorisation is required for carrying on the activities under paragraph 1. Within 14 days after commencing activities, financial institutions, which are not subject to authorisation (licensing) and supervision under another law, shall notify the BNB of the scope of the transactions effected thereby.


(3) The Bulgarian National Bank may require from any financial institution to provide it with information about its legal status and business.

Article 4. The provisions of this Act shall not apply to:

1. the Bulgarian National Bank, whereof the business shall be regulated by express law;


2. any licensed postal operators of universal postal service - in respect of monetary operations thereby effected characteristic of the operation thereof and regulated by express law;


3. credit unions granting credits solely to their members at the expense of contributions made by them and at their own risk.

Article 5. The prohibition on receiving deposits and other repayable funds from the public shall not apply to:

1. the Bulgarian State and municipalities or international public organisations whose members comprise one or more Member States - upon receipt of repayable funds in the cases stipulated by law;


2. the activity of persons where such activity is expressly regulated by law and is subject to supervision aimed at safeguarding depositors and investors.

Article 6. (1) No person which does not hold a licence (authorisation) for conduct of banking business may include in the business name thereof or use in advertising or any other activity the word "банка" [bank] or any derivative thereof in any foreign language, or any other word which signifies the conduct of banking business.

(2) The prohibition referred to in paragraph 1 shall not apply to an institution whereof the name has been established or recognized by law or by an international agreement whereto the Republic of Bulgaria is a party, as well as where the context wherein the word "bank" is used clearly indicates that the said institution does not have the effecting of banking transactions as its objects.


(3) The name of a bank may not resemble the name of another bank conducting banking business in the Republic of Bulgaria or the name of a reputable bank on the international financial market.


(4) A bank authorised in a Member State, which intends to conduct business within the territory of the Republic of Bulgaria, shall use the same name as the one used in the home Member State. If the name of such bank is similar to that of another bank operating in the Republic of Bulgaria, the BNB may require that the name be accompanied by other distinctive additions for the purposes of distinction.

Chapter Two

INCORPORATION AND MANAGEMENT OF A BANK

Article 7. (1) A bank shall be incorporated as a joint-stock company and, save in so far as otherwise provided by this Act, the Commerce Act shall apply thereto.

(2) The minimum required paid-up capital upon a bank's incorporation shall be no less than BGN 10 million.


(3) Contributions against subscribed shares to the minimum required capital under paragraph 2 may be solely monetary.


(4) A bank may open more than one branch within a single population centre, including the population centre where the said bank has the registered office thereof.


(5) The registered address and registered office of the bank as entered in the commercial register shall coincide with the place of its actual management and shall be located in the country where the bank actually carries on its business.

Article 8. Any bank shall issue solely dematerialised shares, and each share shall entitle the holder thereof to one vote.
Article 9. The Articles of Association of any bank shall state, in addition to the particulars prescribed in the Commerce Act, particulars of the transactions which the bank shall effect, the powers to sign for and to represent the bank, as well as particulars of the internal control system of the bank.
Article 10. (1) A bank shall be managed and represented jointly by not less than two persons, at least one of them having command of the Bulgarian language. The said persons may not delegate the overall management and representation of the bank to any of them, but may empower third parties to perform specified acts.

(2) The persons under paragraph 1 shall manage the bank attending in person its registered office.


(3) No legal person shall be eligible for election to the Management Board or to the Board of Directors of any bank.

Article 11. (1) A member of the Management Board or the Board of Directors, as well as a procurist, except for those whose authorisation is solely for the business of a branch of a bank authorised in the Republic of Bulgaria, may be a person who:

1. holds an educational qualification degree not lower than Master, conferred thereon upon graduation from a higher educational establishment;


2. possesses qualifications and professional experience of banking adequate to the relevant education and, applicable to the persons referred to in sentence one of Article 10, paragraph 1 herein, previous experience of at least 5 years on a position requiring performance of managerial functions in a bank or a corporation or institution comparable to a bank, conforming to criteria determined by the BNB;


3. has no conviction for a premeditated offence at public law, unless he has been exonerated;


4. holds no previous membership of a management body or a supervisory body of, and no previous status as general partner in, any corporation dissolved by bankruptcy and leaving any creditor unsatisfied, within the two years last preceding the date of the adjudication in bankruptcy, regardless of whether his rights have been restored;


5. holds no previous membership of a management body or a supervisory body of a bankrupt bank within the two years last preceding the date of the adjudication in bankruptcy;


6. is under no lapsed or effective disqualification from occupying a position of property accountability;


7. is no spouse of any other member of a management body or a supervisory body of the bank, and is no lineal or collateral relative to any such person up to the third degree of consanguinity and does not actually live with such a member;


8. is not an insolvent debtor whereof the rights have not been restored.


(2) Possession of the qualifications and experience required under subparagraph 2 of paragraph 1 shall be proved by a certificate issued by the BNB. The terms and procedure for the issue and revocation of such a certificate shall be established by an ordinance of the BNB.


(3) The particulars covered under subparagraphs 4 to 8 of paragraph 1 shall be verified by a declaration.


(4) Paragraphs 1 - 3 shall apply mutatis mutandis to managing directors of branches of banks having their registered office in a third country.


(5) Unless released from the respective body within a time limit as prescribed by the BNB, any person, who does not satisfy the requirements as listed in paragraph 1 or paragraph 4 and, in respect of the persons managing the bank, in Article 10 (1) herein as well, shall be removed from office by the BNB.

Article 12. A member of a supervisory body of a bank or a person representing a legal person on the supervisory board must satisfy the requirements covered under subparagraphs 3 - 8 of paragraph 1 of Article 11 herein. Any such representative who does not satisfy the said requirements shall be removed from office by the Bulgarian National Bank unless released from the respective body within a time limit as prescribed by the Bulgarian National Bank.
Chapter Three

LICENSING AND PERMISSIONS

Section I

Licence for banking business

Article 13. (1) A licence (authorisation) granted by the BNB shall be required for the conduct of banking business.

(2) Any application for the granting of a banking licence shall enclose:


1. the Articles of Association and any other instruments of incorporation of the applicant;


2. documents containing particulars of the subscribed capital and of the contributions made towards participating interests therein;


3. a business plan of the bank containing a detailed description of the activities to be performed, customer and product structures, the objectives, policy and strategy of the bank, a three-year financial forecast;


4. description of the management and organisational structure, including the activity of individual organisational units, allocation of responsibilities among executive directors and other officers, organization and management of the information system of the bank, including the information security arrangement;


5. description of the internal control systems and the risk management systems as well as an anti-money laundering programme;


6. the names and addresses of the members of the Supervisory Board and the Management Board (or of the Board of Directors) of the bank, and detailed particulars in writing of the qualifications and professional experience possessed thereby;


7. particulars in writing of the name/business name and residence/registered office of any persons who or which have subscribed for 3 and more than 3 per cent of the voting shares, as well as of the professional (business) activity thereof during the last preceding five years. Any such natural person and the legitimate representatives of any such legal persons shall submit declarations in writing:


(a) that the payments against subscribed shares have been effected with own funds;


(b) about the origin of the funds wherefrom payments have been effected for subscribed shares;


(c) of the taxes paid thereby during the last preceding five years;


8. in respect of the legal persons referred to in subparagraph 7 - a document of registration and particulars in writing regarding the persons holding shares or interests in the capital or property thereof or exercising control over them;


9. any other particulars and documents as may be laid down in an ordinance or required by the BNB for the purpose of ascertaining whether the circumstances necessary for assessment of the conditions for granting of a licence or refusal thereof exist.


(3) Payments towards participating interests shall be deemed to be effected with own funds where at the date of effecting the payment thereof:


1. for natural persons - the difference between their disposable funds on bank accounts and the amount of their liabilities is higher than the amount of the payment towards participating interests;


2. for legal entities - the amount of the payment towards participating interests is lower than both the net worth of the capital defined as the difference between assets and liabilities according to balance sheet; and lower than their disposable funds on bank accounts.


(4) The Bulgarian National Bank shall hold preliminary consultations with the competent banking supervision authority before granting a licence for banking business to:


1. a bank which will be a subsidiary of a bank that has been granted a licence in another Member State;


2. a bank which will be a subsidiary of a parent undertaking of another bank which has been granted a licence in another Member State;


3. a bank which is controlled by persons exercising control over another bank which has been granted a licence in another Member State.


(5) The Bulgarian National Bank shall hold preliminary consultations with the competent authority responsible for supervision of insurance company or investment intermediary in another Member State before granting a licence for banking business to:


1. a bank which will be a subsidiary of an insurance company or an investment intermediary that has been granted a licence in another Member State;


2. a bank which will be a subsidiary of a parent undertaking which has as a subsidiary an insurance company or an investment intermediary which has been granted a licence in another Member State;


3. a bank which will be controlled by persons exercising control over an insurance company or an investment intermediary which has been granted a licence in another Member State.


(6) Consultations with the competent supervision authorities shall cover issues concerning the shareholders, reputation and experience of the persons participating in the management of the companies under paragraph 4 or 5, evaluation of compliance with supervisory requirements as well as any other information as may be necessary for the granting of the licence.

Article 14. (1) Before pronouncing upon any application for licence, the BNB shall make all enquiries as may be necessary to establish the validity of the documents submitted and the financial position of the applicant.

(2) Prior to pronouncing upon any application for provision of services and activities covered under Article 54 (2) and (3) of the Public Offering of Securities Act , the BNB shall take into consideration the observations in writing of the Financial Supervision Commission, and said observations shall be presented within one month after being requested in writing by the BNB, together with documents enclosed thereto.


(3) A licence for conduct of banking business shall be granted, provided that the following conditions obtain simultaneously:


1. the Articles of Association and the other instruments of incorporation of the applicant are in conformity with law;


2. the Articles of Association of the applicant do not contain provisions which threaten the security of the assets;


3. the capital of the bank and the paid-up portion thereof are not lower than the minimum required amount;


4. at BNB discretion, the activity which the applicant intends to carry on ensures the required reliability and financial stability.


5. the members of the Management Board (Board of Directors) and the Supervisory Board satisfy the requirements herein and no legal prohibition on holding the position has been imposed thereon;


6. at BNB discretion, the shareholders controlling more than three per cent of the votes with their acts or influence on decision-making could not harm the reliability or security of the bank or its operations;


7. at BNB discretion, there is no threat that the bank will be affected by risks arising from the non-bank business of its founders;


8. in the event of a financial holding company or a mixed-activity holding company - at BNB discretion - the parent undertaking will not prevent the exercise of supervision on a consolidated basis;


9. the persons who have subscribed for three or more than three per cent of the capital have effected payment towards participating interests with own funds;


10. it has not been established that existence of close links between the bank and other persons may prevent the effective exercise of banking supervision;


11. at BNB discretion, the requirements or difficulties in implementation of individual statutory or administrative acts of a third country governing one or more legal or natural persons with whom the bank has close links will not prevent the effective exercise of banking supervision;


12. at BNB discretion, the amount of the property possessed by the persons that have subscribed for 10 or more than 10 per cent of the capital and/or the scale and financial results of the business carried out by them correspond to the proposed acquisition of shareholding in the bank and do not raise doubt as to the reliability and capability of such persons, where necessary, to provide capital support to the bank;


13. the origin of the funds used for effecting payment towards participating interests by the persons who have subscribed for three or more than three per cent of the capital is clear and legitimate;


14. at BNB discretion, the business plan, the management and organizational structure of the bank, the internal control systems, the risk management systems, as well as the anti-money laundering programme ensure adequate risk management and the required reliability and financial stability of the bank;


15. the provision of Article 6 (4) has been complied with.


(4) Within three months after the receipt of any application and all required documents, the BNB shall take a decision on granting of a licence for conduct of banking business, provided the terms of Article 15 (1) are met, or shall refuse to grant a licence.

Article 15. (1) A licence for conduct of banking business shall be granted if within three months after receipt of the notice under Article 14 (4), proposition one herein, the applicant certifies that the following conditions have been fulfilled:

1. the persons who or which have subscribed for shares have made payments towards the said shares, whereof the aggregate value is not less than the minimum amount of capital required for conduct of banking business;


2. the members of the Management Board (Board of Directors) have obtained certificates under Article 11 (2) and the other officers possess the required qualifications and professional experience;


3. buildings appropriate for conduct of banking business and the necessary technical equipment have been procured;


4. internal control rules have been developed, including clear administrative and accounting procedures;


5. an internal control unit has been set up, and the employees appointed possess the professional qualifications and experience required for the operation;


6. reliable internal rules for management have been elaborated, including a clear organisational structure with precisely defined, transparent and adequate levels of responsibility and effective procedures for identification, management, monitoring and reporting of risks to which the bank might be exposed.


(2) The rules under subparagraphs 4 and 6 of paragraph 1 shall be comprehensive and shall correspond to the nature, scale and complexity of the bank's activity and shall be consistent with the risks to which the bank may be exposed in accordance with Article 39 (2).


(3) The Bulgarian National Bank may exclude from the licence for banking business particular transactions or activities should it deem that the applicant is not qualified to initiate said transactions or activities or where other requirements set out in law have not been fulfilled.


(4) If the applicant does not submit the required documents within the time limit under paragraph 1, the BNB shall refuse to grant a licence.


(5) Licences as granted shall be recorded in a register kept by the BNB.


(6) Where the licence authorises conduct of business under Article 2 (2) subparagraph 9, the BNB shall send a transcript of the licence to the Financial Supervision Commission.


(7) The Bulgarian National Bank shall notify the European Commission about:


1. the requirements for licensing of credit institutions;


2. any licence granted to a credit institution.

Article 16. (1) Apart from the cases covered under Article 15 (4) herein, the BNB shall refuse to grant a licence where it establishes that :

1. any of the conditions under Article 14 (3) does not exist;


2. the applicant has not submitted, within the time limits set, all the required particulars and documents under Article 13 (2) or the submitted documents contain incomplete, inconsistent or unreliable information.


(2) If the Financial Supervision Commission has submitted adverse observations under Article 14 (2), the BNB shall refuse to grant a licence for provision of services and activities under Article 54 (2) and (3) of the Public Offering of Securities Act .


(3) The refusal to grant a licence shall be motivated.


(4) Regardless of the time limits under Articles 14 and 15, the BNB shall grant or refuse to grant a licence within 12 months from receipt of the application.

Article 17. (1) To obtain a licence for conduct of banking business within the territory of the Republic of Bulgaria through a branch, a bank with a registered office in a third country shall file an application enclosing thereto:

1. a certified transcript of the instrument of registration of the bank and a document from the registration body containing current data about the registered address and registered office, the objects, the amount of the capital, the management system and the persons representing the bank;


2. a certified transcript of the authorization for conduct of banking business of the competent banking supervision authority of the bank's home country;


3. a certified transcript of the bank's Articles of Association;


4. a programme of the operations of the branch, including description of the activities under Article 1 (1) and (2) which it intends to carry on;


5. the organizational structure of the branch;


6. the annual financial statements for the last three years;


7. a written consent for opening a branch from the banking supervision authority of the bank's home country;


8. a written statement from the banking supervision authority of the bank's home country containing information about the financial position of the bank and a commitment for co-operation with the BNB;


9. particulars about the persons to whom management of the branch is entrusted, including particulars about their qualifications and professional experience in banking;


10. other particulars and documents as may be laid down in an ordinance or required by the BNB with a view to establishing all the circumstances necessary for determining whether the conditions for granting of a licence or refusal to grant a licence exist.


(2) No licence under paragraph 1 may confer on the branch the right to carry on activities which the bank may not conduct in its home country.


(3) A licence shall be granted where:


1. the competent banking supervision authority of the bank's home country in the third country exercises effective supervision over it and its branches abroad;


2. an agreement is concluded on supervision co-operation between the BNB and the competent supervision authority;


3. the bank is of repute on the international financial market and its financial position is reliable and sound;


4. the organizational structure of the bank is appropriate for the activities it intends to carry on;


5. the managing directors of the branch meet the requirements of this Act and have the required reputation;


6. the legislation of the third country does not prevent the exercise of effective supervision on a consolidated basis or the provision of the necessary information.


(4) The Bulgarian National Bank shall notify the European Commission and the European Banking Committee of any licence granted by it for conduct of banking business through a branch of a bank having its registered office in a third country.


(5) The Bulgarian National Bank shall refuse to grant a licence to a bank having its registered office in a third country for conduct of banking business within the territory of Bulgaria through a branch where the BNB determines that:


1. any of the conditions under paragraph 3 does not exist;


2. the competent banking supervision authority of the applicant bank's home country has not given consent to the said bank for opening a branch in the Republic of Bulgaria or has sent an opinion on unsatisfactory financial position or on infringements of the requirements for prudent banking;


3. the competent banking supervision authority of the applicant bank's home country does not apply the reciprocity principle in ensuring access of banks with registration within the territory of Bulgaria to the relevant bank market on the territory of the third country.

Article 18. The representative office of any bank in the Republic of Bulgaria shall be obliged to submit to the BNB a transcript of the instrument of registration with the Bulgarian Chamber of Commerce and Industry within fourteen days after the date of issue of the said instrument. No such representative office may carry on commercial activity.
Article 19. In case of a refusal, the applicant may file a new application for granting of a licence for conduct of banking business not earlier than 12 months from entry into force of the refusal thereof.
Section II

Mutual recognition

Article 20. (1) A bank licensed in a Member State may carry on through a branch within the territory of the Republic of Bulgaria the activities covered in Article 2 (1) and (2), provided that said activities are included in its licence and upon a notice thereof from the competent authority to the BNB.

(2) To carry on banking business within the territory of the Republic of Bulgaria through a branch the bank licensed in a Member State shall establish only one branch regardless of the number of places of operation.

Article 21. (1) The Bulgarian National Bank shall take necessary actions for exercise of supervision over the branch under Article 20 within two months from receipt of a notification from the competent authorities of the home country of the said bank's intention to conduct business within the territory of the Republic of Bulgaria. Within the term under sentence one the BNB may specify the conditions under which, in the interest of the general good, the bank may conduct its business within the territory of the Republic of Bulgaria.

(2) A bank licensed in a Member State may commence its activity within the territory of the Republic of Bulgaria upon receipt of a notification thereof from the BNB or after expiry of the time limit under paragraph 1.

Article 22. A bank licensed in a Member State may carry on directly within the territory of the Republic of Bulgaria the activities under Article 2 (1) and (2) should said activities be covered by its licence and upon a notification thereof to the BNB from the competent authority which has granted the licence. The bank shall specify the names and addresses of the persons who will represent it before the BNB.
Article 23. (1) A bank licensed in the Republic of Bulgaria may carry on activities within the territory of another Member State should said activities be covered by its licence for banking business.

(2) The bank under paragraph 1 shall notify in writing the BNB of its intention to establish a branch within the territory of another Member State. The notification shall contain information about:


1. the Member State within the territory of which it plans to establish the branch;


2. the registered address and registered office where it intends to register the branch, and the correspondence address;


3. the persons to whom management and representation of the branch is to be entrusted, including description of their responsibilities;


4. a programme of the operations of the branch, including description of the activities under Article 2 (1) and (2) which it intends to carry on;


5. the organizational structure of the branch;


6. other documents as laid down in a BNB ordinance.


(3) Should the BNB deem that the planned activity within the territory of another Member State is in accordance with the organisational structure and financial situation of the bank, within three months of receipt of the notification and all the documents referred to in paragraph 2, the BNB shall communicate the received information to the competent authorities of the host Member State, as well as the amount of own funds and the capital adequacy ratio of the bank. The BNB shall notify the applicant bank within the same time limit.


(4) The Bulgarian National Bank shall give reasons for its refusal to communicate the information referred to in paragraph 3 where:


1. the bank plans to carry on within the territory of another Member State an activity which is outside its scope of licence;


2. it deems that the planned activity within the territory of another Member State is not in conformity with the structural organization and financial situation of the bank;


3. it deems that the structural organization of the branch does not ensure its reliable and sound management.


(5) BNB refusal under paragraph 4 shall be issued in writing within three months of receipt of the notification and all the documents referred to in paragraph 2 and shall notify the bank thereof within the same time limit.


(6) BNB refusal under paragraph 4 as well as its failure to reply within the time limit set shall be subject to a right to apply to courts in accordance with the procedure of Article 151.


(7) The Bulgarian National Bank shall notify the European Commission of any refusal under paragraph 4.


(8) The bank under paragraph 1 shall notify the BNB and the competent authorities of the host Member State of any changes in the stated circumstances under subparagraphs 2 - 6 of paragraph 2 no later than 30 days before the change becomes effective.


(9) A bank licensed in the Republic of Bulgaria which intends to exercise for the first time its right to carry on activity directly within the territory of another Member State shall notify the BNB of its intentions, specifying the services to be provided within the territory of the host Member State. Within one month of receipt of the notification the BNB shall inform the competent authorities of the host Member State.


(10) The bank as referred to in paragraph 9 may carry on directly activities within the territory of another Member State, provided that said activities are included in its licence for banking business.

Article 24. (1) A financial institution having its registered office in a Member State may carry on within the territory of the Republic of Bulgaria, either through a branch or directly, one or more of the activities referred to in Article 3 (1), provided that it is a subsidiary of a bank or a jointly-owned subsidiary of two or more banks licensed in a Member State, the Memorandum or the Articles of Association of which permit expressly the carrying on of the activities referred to in Article 3 (1) and which fulfills each of the following conditions:

1. the parent bank or banks which own jointly the financial institution are licensed for conduct of banking business within the territory of the Member State by the law of which the financial institution is governed;


2. the financial institution actually carries on one or more of the activities referred to in Article 3 (1) within the territory of the home Member State by the law of which the financial institution is governed;


3. the parent bank or banks which own jointly the financial institution hold 90% or more of the votes in the general meeting of the financial institution;


4. the parent bank or banks which own jointly the financial institution shall satisfy the competent authorities regarding the prudent management of the financial institution and have declared to the BNB, upon consent of the relevant home Member State competent authorities, that they jointly and severally guarantee the commitments entered into by the financial institution;


5. the financial institution and the activities it is to carry on in the Republic of Bulgaria are effectively included in the consolidated supervision of the parent bank or of each of the banks which own jointly the financial institution, exercised in accordance with the provisions of this Act, including the minimum own funds requirements, control of large exposures and limitation of participations.


(2) Compliance with the conditions under paragraph 1 shall be verified by the competent authorities of the home Member State by a certificate, which shall form part of the notification to the BNB.


(3) If the BNB receives information from the competent authorities of the home Member State that the financial institution concerned has ceased to fulfill any of the conditions under subparagraphs 1 - 5 of paragraph 1, such financial institution shall lose its rights and all its activities shall become subject to the Bulgarian legislation.

Article 25. (1) A financial institution having its registered office in the Republic of Bulgaria may carry on within the territory of a Member State one or more of the activities under Article 3 (1), either through a branch or directly, should it be a subsidiary of a bank or a jointly-owned subsidiary of two or more banks licensed in the Republic of Bulgaria and which fulfills each of the following conditions:

1. the Memorandum or the Articles of Association of the financial institution permits the provision of the services;


2. any of the requirements referred to in Article 24 (1) is fulfilled and the parent bank or banks which own jointly the financial institution have confirmed in writing compliance with said requirements.


(2) Where it establishes that the conditions under paragraph 1 are fulfilled, the BNB shall issue a certificate, to be communicated to the competent authorities of the host Member State.


(3) The procedure for issue of a certificate shall be laid down in a BNB ordinance.


(4) The Bulgarian National Bank shall exercise supervision on a consolidated basis over the financial institution referred to in paragraph 1 and shall monitor its shareholding structure in accordance with a procedure as set out in a BNB ordinance.


(5) In the exercise of supervision over the financial institution under paragraph 1 the BNB shall cooperate with the competent authorities of Member States subject to the conditions of professional secrecy.


(6) The provisions of this Article shall not apply to financial institutions which by virtue of another law have the right to carry on directly or through a branch activity in another Member State.

Article 26. (1) The parent bank or banks which own jointly the financial institution shall notify the BNB of any changes in the circumstances referred to in Article 25 (1) within seven days of occurrence thereof.

(2) The Bulgarian National Bank shall notify the competent authorities of the respective host Member State where the financial institution ceases to fulfill any of the conditions referred to in Article 25 (1).

Article 27. (1) The provisions of Articles 24 - 26 shall be applied mutatis mutandis to financial institutions which are subsidiaries of other financial institutions.
Section III

Permissions

Article 28. (1) Any natural or legal person as well as connected persons may not, without the prior written permission of the BNB, acquire directly or indirectly shares in a bank licensed in the Republic of Bulgaria if as a result of the acquisition their holding would become qualifying holding or if such holding would reach or exceed the thresholds of 20, 33, 50, 66, 75 or 100% of the voting shares. Such permission is furthermore required in the cases where the bank would become a subsidiary.

(2) A permission from BNB is also required where the thresholds referred to in paragraph 1 would be reached or exceeded as a result of arising connection between shareholders of a bank or as a result of inheritance. The transferees may not exercise the voting right attaching to such shares prior to obtaining a written permission from the BNB. Should no such permission be requested within one month of occurrence of connection or succession, or should no such permission be granted, the BNB may apply the measure referred to in subparagraph 15 of Article 103 (2) herein.


(3) The Bulgarian National Bank shall hold preliminary consultations with the competent supervision authority in the Member State where:


1. the person which plans to acquire shares in the capital of a bank under paragraph 1 is a bank, an insurance company or an investment intermediary licensed in another Member State or a parent undertaking of another bank, insurance company or investment intermediary licensed in another Member State exercising control over a bank, insurance company or investment intermediary licensed in another Member State, or


2. as a result of such acquisition the bank whose shares are subject to acquisition would become a subsidiary or would be controlled by the acquirer - a bank, insurance company or investment intermediary licensed in another Member State.


(4) Where any shares referred to in paragraph 1 have been acquired without prior permission, upon public offering of shares on the stock exchange or on another regulated (organized) market of securities, the acquirers may not exercise the voting power attached to any such shares prior to obtaining a written permission from the BNB. Should no such permission be requested within one month after acquisition, or should no such permission be granted, the BNB may apply the measure referred to in subparagraph 15 of Article 103 (2) herein.


(5) Prior to the grant of permission, no shares referred to in paragraphs 2 and 4 shall be counted against the required quorum at the General Meeting of Shareholders.


(6) Save by written permission of the BNB, no bank may:


1. open branches abroad;


2. alter the business name thereof as indicated in the licence;


3. transform itself;


4. effect banking transactions beyond the scope of the licence as granted;


5. increase the capital thereof by non-cash assets;


6. purchase any own shares issued thereby;


7. reduce the capital thereof.


8. establish or acquire control over a bank which has its registered office abroad.


(7) Any transaction or decision covered under paragraphs 1 and 6, wherefor no advance permission has been granted, shall be void.

Article 29. (1) The Bulgarian National Bank shall consider the application for grant of permissions under Article 28 (1), (2), (4) and (6) within three months of receipt thereof. In the cases of subparagraph 3 of Article 28 (6) the BNB shall consider the application upon presentation thereto of a permission from the Commission for the Protection of Competition, where granting of such a permission is mandatory.

(2) The terms and procedure for the grant of permissions referred to in paragraphs (1), (2), (4) and (6) as well as the grounds for refusal shall be established by an ordinance issued by the BNB.

Article 30. (1) Upon passing a resolution on an increase of a bank's capital by means of payments raised from the shareholders, the General Meeting or the Management Board (Board of Directors), as the case may be, shall establish a time limit for effecting of the payments, which may not be longer than six months after entry of the resolution on the increase of the capital (in the court register). In the case of public offering of shares, the said time limit shall begin to run from the publication of the prospectus.

(2) Any shares in respect whereof the payments due have not been effected, or which have not been sold within the time limit, shall be cancelled, and the competent authority shall take action for alteration of the resolution up to the amount of actually paid-up capital. Any resolution on alteration must be passed not later than three months after expiry of the time limit referred to in paragraph 1.


(3) Should any resolution referred to in paragraph 2 be not passed within the established time limit, the [competent] court shall enter the respective alteration in the commercial register, acting on a submission by the BNB.


(4) Should grounds for applying for permission arise in respect of any shareholders as a result of an alteration of the resolution, Article 28 (4) herein shall apply accordingly.


(5) The procedure established by paragraphs (2) and (3) shall furthermore apply where the BNB ascertains that the capital has been increased by non-cash assets without permission or that the resources whereby cash payments have been effected are not owned by the shareholder.

Article 31. (1) A permission herein must furthermore be held by any shareholder who or which, upon participation in an increase of a bank's capital by means of payments raised from the shareholders or through conversion of part of the debentures into shares, acquires or retains a holding equal to or exceeding the thresholds of 20, 33, 50, 66, 75 or 100 per cent of the voting shares in the increased capital. In this case Article 28 (3) shall apply accordingly.

(4) Should grounds for applying for permission arise in respect of any shareholders as a result of increasing the capital by a lower amount than the amount fixed in the resolution, Article 28 (4) herein shall apply accordingly.


(3) The terms and procedure for the grant of permissions under this Article shall be established by an ordinance issued by the BNB.


(4) Upon violation of the requirements under paragraph 1 the acquisition shall be effective, but the BNB may apply the measure referred to in subparagraph 15 of Article 103 (2) herein.

Article 32. (1) Where any person acquires 3 or more than 3 per cent of the voting shares in a bank licensed in the Republic of Bulgaria, the Central Depository shall notify the BNB of the name/business name and address/registered office of the said person within seven days after entry of the acquisition into the Register of Shareholders.

(2) A person referred to in paragraph 1 shall be obliged, when so requested by the BNB, to submit thereto the documents covered under subparagraphs 7 - 9 of Article 13 (2) herein within a time limit set by the BNB.


(3) Upon failure to comply with the requirement referred to in paragraph 2, as well as where the information provided is not sufficiently comprehensive and reliable, the measure referred to in subparagraph 15 of Article 103 (2) herein may be applied to that person.


(4) The Bulgarian National Bank shall furthermore be vested with the powers referred to in paragraph 3 where the BNB establishes that:


1. the person has submitted untrue particulars, or


2. by the activity or influence thereof on decision-making, the person may impair the reliability or security of the bank or of the operations thereof, or


3. the person has not paid contributions with own funds.

Article 33. (1) Any natural or legal person who/which intends to transfer, whether directly or indirectly, its qualifying holding in a bank licensed in the Republic of Bulgaria or to reduce its qualifying holding so that its shares would fall below 20, 33, 50, 66, 75 or 100 per cent of the capital, shall inform the BNB about:

1. the amount of the participating interest held thereby before the transfer;


2. the amount of the participating interest to be held thereby after the transfer.


(2) Where a bank ceases to be a subsidiary of a person, said person shall inform the BNB.


(3) The notifications referred to in paragraphs 1 and 2 shall be submitted not later than 10 days before occurrence of the circumstance thereof.

Article 34. (1) Banks licensed in the Republic of Bulgaria shall notify the BNB within seven days of coming to knowledge of any acquisition or transfer of shares in their capital as a result of which the participating interest of the shareholders would exceed or fall below one of the thresholds specified in Article 28 (1).

(2) The banks shall submit to the BNB by the 15th day of the month following every quarter a written information about the names of the shareholders holding a qualifying holding as well as about the amount of such holding.

Article 35. A bank shall be registered with the commercial register upon presentation of the licence issued by the BNB, and any alterations covered under Article 28 (6) herein, upon submission thereto of the requisite permission as granted by the BNB.
Section IV

Withdrawal of licence

Article 36. (1) The BNB may withdraw a licence for conduct of banking business as granted where:

1. the bank fails to commence conduct of licensed banking business within twelve months after the grant of said licence;


2. any violations covered under Article 103 (1) herein have been committed;


3. the bank has submitted false particulars on the grounds of which the said licence was granted;


4. the bank has ceased to engage in business for more than 6 months;


5. the bank no longer fulfils the conditions under which the licence was granted;


6. the bank no longer possesses sufficient own funds or can no longer be relied on to fulfill its obligations to creditors, and in particular no longer provides security for the assets entrusted to it.


(2) The BNB shall mandatorily withdraw any bank's licence as granted on the grounds of insolvency where:


1. the bank concerned has not met a due and payable monetary obligation for more than seven business days, or


2. its own funds are a negative value.


(3) The own funds of a bank shall be determined in accordance with the prudential supervision requirements and the rules laid down in Article 40 (1).


(4) By the act of withdrawal of a licence, the BNB shall mandatorily appoint conservators, unless such have been appointed theretofore.


(5) The provisions of Article 26 (1) and Article 34 of the Administrative Procedure Code regarding explanations and objections of the persons concerned shall not apply to issue of acts under this Article.


(6) By the withdrawal of the licence the business of the bank shall be terminated and a compulsory liquidation shall be conducted.

Article 37. (1) Upon withdrawal of a bank's licence on the grounds of Article 36 (1), the BNB shall file a request to the commercial register for registration of the winding up and declaring it in liquidation.

(2) In the cases referred to in Article 36 (2) the BNB shall file a request to the competent court for initiation of bankruptcy proceedings.


(3) The decision of the BNB on withdrawal of a licence shall be promulgated in the State Gazette. The BNB shall furthermore take other measures necessary for informing the public about the revocation of the licence thereof.


(4) The BNB shall notify the European Commission of any licence withdrawal.


(5) Upon withdrawal of a licence for conduct of banking business of a bank which has a branch in a Member State, the BNB shall inform the competent supervision authority of the respective Member State on a timely basis.

Article 38. (1) The BNB may withdraw the licence for conduct of banking business of a bank from a third country for conduct of business through a branch on the grounds of Article 36 (1).

(2) The BNB shall withdraw the licence for conduct of banking business of a bank from a third country for conduct of business through a branch where the licence of the bank has been withdrawn by the competent authority in the country by its registered office.


(3) After the withdrawal of the licence of a bank from a third country the BNB shall take measures to notify the public of the licence withdrawal.

Chapter Four

OWN FUNDS, LIQUIDITY AND OTHER REQUIREMENTS

Article 39. (1) To ensure fulfillment of their obligations to creditors, banks shall possess own funds adequate to the risks assumed in the course of their business.

(2) Banks shall, at any time, maintain own funds exceeding or being equal to the amount of capital requirements for:


1. credit risk - for their overall activity;


2. position risk, settlement risk and counterparty risk - for their trading portfolio activity;


3. currency and commodity risk - for their overall activity;


4. operational risk - for their overall activity;


5. other risks inherent to their activity.


(3) The share capital of a bank as well as its own funds shall not fall below BGN 10 million.


(4) Banking groups and financial holding companies shall have adequate own funds in accordance with the requirements under paragraph 2 applicable to their subsidiaries.

Article 40. (1) The structure and elements of own funds, the capital adequacy requirements, the techniques and methods for calculation, the conditions for approval or recognition of evaluation models and approaches, as well as the terms and procedure for approval or recognition of persons who perform evaluation of risks shall be laid down in an ordinance of the BNB.

(2) In regard to the requirements under Article 39 the BNB shall:


1. grant permissions for inclusion or prescriptions for exclusion of certain items in the own funds;


2. recognize agencies for external credit evaluation or export insurance;


3. recognize netting agreements;


4. authorize and approve the application for prudential supervision purposes of sophisticated approaches and internal rating models for measurement of credit, operational and market risks;


5. permit application of alternative approaches and techniques;


6. recognize a supervisory treatment established in another Member State or a third country where such treatment is effected in compliance with the principles set out in this Act and the statutory instruments for its application.


(3) By the ordinance under paragraph 1 the BNB shall establish the terms and procedure for granting of permissions under paragraph 2.

Article 41. (1) No bank may pay out dividends or distribute capital before setting aside the funds required for the Reserve Fund, as well as where any such distribution would result in non-conformity with the requirements laid down in the ordinance under Article 40 (1).

(2) The banks may not use funds in the Reserve Fund for distribution of dividends without the permission of the BNB.

Article 42. (1) Any bank shall manage its assets and liabilities in a manner that allows it at any time to fulfill its due and payable obligations by:

1. adopting funding and liquidity plans consistent with the nature of its activity;


2. maintaining liquid funds to ensure mismatches between cash inflows and cash outflows;


3. maintaining a system for interest rate risk monitoring in all operations;


4. adjusting promptly the maturity structure of assets and liabilities upon a change in market conditions;


5. maintaining the necessary information about calculation of its liquidity position at any moment.


(2) Liquid assets, maturity structure of assets, liabilities and off-balance-sheet items and any other liquidity management requirements shall be laid down in an ordinance of the BNB.

Article 43. A bank shall periodically value the credits extended and the other risk-weighted exposures, and shall allocate provisions for impairment losses under criteria as the BNB shall establish by an ordinance.
Article 44. (1) No bank or group of banks shall incur large exposures whereof the percentage value of own funds exceeds at any time the established limits.

(2) Any bank or group of banks shall establish the exposure incurred thereby to a single person or to economically connected persons as the sum total of balance-sheet assets and off-balance-sheet items as defined by a BNB ordinance.


(3) The exposure incurred to any single person or economically connected persons shall be regarded as a "large exposure" when the value thereof has reached or exceeded 10 per cent of own funds of the bank or banking group.


(4) Any decision leading to the incurrence of a large exposure shall be made by the Management Board (Board of Directors). Where any such exposure exceeds 15 per cent, the decision shall be made unanimously.


(5) The exposure to any single person or to any economically connected persons may not exceed 25 per cent of own funds of the bank or banking group.


(6) In the aggregate, the large exposures referred to in paragraph 3 may not exceed the octuple amount of own funds.


(7) The BNB shall establish the terms and procedure under which separate elements of the exposure may be weighted at less than 100 per cent or be excluded from the calculation of the ratios referred to in paragraphs 5 and 6 and under Article 45 (6).

Article 45. (1) Subject solely to the unanimous decision of its collective management body a bank may incur exposures to:

1. officers of the bank;


2. shareholders with shares entitling them to more than 10 per cent of the total number of votes in the General Meeting of Shareholders;


3. a shareholder whose representative is a member of the management or the supervisory body of the bank;


4. spouses, brothers, sisters and lineal relatives up to the third degree of consanguinity, including the persons under subparagraphs 1, 2 and 3;


5. legal persons in the management whereof the persons under subparagraphs 1 - 4 participate;


6. commercial companies in which the bank or a person under subparagraphs 1 - 4 participates in the management or has a qualifying holding;


7. third parties acting for the account of the persons under subparagraphs 1 - 6.


(2) In the cases of paragraph 1 the decision on incurrence of the exposure shall define the conditions thereunder.


(3) The procedure referred to in paragraph 1 shall not apply where:


1. the amount of the exposure to a person under subparagraphs 1 and 4 of paragraph 1 does not exceed the said person's annual remuneration;


2. the amount of the exposure to a single person under subparagraphs 2, 3, 5, 6 and 7 of paragraph 1 is less than one per cent of the bank's own funds, but not exceeding BGN 300,000.


(4) Banks may not provide more favourable conditions on exposures to the persons under paragraph 1, such as:


1. entering into a transaction which, due to its nature, purpose, characteristics or risk, the bank would not have normally concluded with clients outside the persons under paragraph 1;


2. collection of interest, fees and other pecuniary obligations or acceptance of collaterals not lower than those required from other clients in similar cases.


(5) The amount of an unsecured credit granted by the bank to its employee may not exceed 24 times his monthly gross monthly remuneration and the total amount of such credits may not exceed three per cent of the bank's own funds. The banks shall adopt internal rules for the granting of such credits.


(6) The total exposure of a bank to a person under paragraph 1 shall not exceed 10 per cent of its own funds and where said person is a bank, 20 per cent. The total amount of all incurred exposures of the bank to the persons under paragraph 1 may not exceed 20 per cent of its own funds.


(7) Within the meaning of this Article an exposure to a single person shall be the sum total of the balance-sheet assets and off-balance-sheet items as set out in the ordinance under Article 44 (2).

Article 46. Officers who have granted credits in violation of Articles 44 and 45 shall be jointly and severally liable for the amounts granted together with the borrower.
Article 47. (1) The total amount of a bank's participations in undertakings other than banks, investment intermediaries or insurance companies may not exceed 50 per cent of its own funds and together with its investments in immovable property and other tangible fixed assets, its total own funds.

(2) The amount of a direct and/or indirect participation of a bank in an undertaking other than a bank, investment intermediary or insurance company may not exceed 10 per cent of its own funds.


(3) A bank may not be a general partner in a commercial company.

Chapter Five

SPECIAL RULES FOR ELECTRONIC MONEY INSTITUTIONS

Article 48. (1) An electronic money institution shall be a joint-stock company engaged in the business of electronic money issuing.

(2) An electronic money institution may furthermore carry on the following activities:


1. provision of financial and non-financial services directly related to electronic money issuance such as:


(a) administering of electronic money by the performance of operational and other ancillary functions related to its issuance;


(b) issuing and administering of other means of payment but excluding the granting of any form of credit;


2. storing of data on electronic devices on behalf of other undertakings or public institutions.


(3) An electronic money institution may not carry on by the nature of trade other commercial activity falling outside the scope of paragraphs 1 and 2.


(4) The requirements for granting of an authorization (licence), supervision and winding up of a bank shall apply mutatis mutandis to electronic money institutions save as otherwise provided for herein.


(5) An electronic money institution that has been authorized by the competent authorities of a Member State may carry on within the territory of the Republic of Bulgaria, directly or through a branch, solely the services for issuance of electronic money excluding the ancillary services under paragraph 2.


(6) An electronic money institution shall not have holdings in other undertakings except where such undertakings perform operational or other ancillary activities related to electronic money issued or distributed by the electronic money institution concerned.


(7) The receipt of funds in exchange for electronic money issuance does not constitute receipt of deposits or other repayable funds within the meaning of this Act where the electronic money is issued immediately upon receipt of said funds.

Article 49. (1) The minimum required paid-up capital for incorporation of an electronic money institution shall not be less than BGN 2 million.

(2) The amount of own funds of an electronic money institution shall not fall below the amount under paragraph 1.


(3) The amount, structure and proportions of own funds available to electronic money institutions at all times as well as the assets in which they may invest shall be laid down in a BNB ordinance.


(4) The provisions of Chapter Four shall not apply to electronic money institutions.

Article 50. (1) Electronic money institutions shall have assets amounting to not less than the total amount of all financial liabilities related to outstanding electronic money.

(2) The type of assets, their evaluation and amount, conditions for risk management and limitations on market risks which electronic money institutions may incur from the investments under paragraph 1 shall be determined by a BNB ordinance.


(3) Should the value of the assets under paragraph 1 fall below the amount of financial liabilities related to outstanding electronic money, the electronic money institution in question shall take appropriate measures to remedy promptly its financial situation.


(4) For the purposes of paragraph 3 the BNB may permit for a certain period of time the value of financial liabilities of an institution related to outstanding electronic money to be guaranteed by assets other than those under paragraph 1 up to an amount not exceeding the lower of 5 per cent of the institution's financial liabilities or the amount of its own funds.


(5) Electronic money institutions shall have in place a sound and prudent management, administrative and accounting procedures and adequate internal control mechanisms safeguarding the institution from financial and non-financial risks it might incur, including technical and procedural risks as well as risks related to its cooperation with undertakings carrying on operational or other ancillary functions related to the electronic money services provided by the institution concerned.

Chapter Six

DISCLOSURE OF CONFLICT OF INTEREST. CONFIDENTIALITY

Article 51. (1) Any officer in a bank shall be obliged to disclose in writing to the management body of the bank concerned any commercial, financial or other business interest which the said officer or any member or members of the family thereof may have in the conclusion of any commercial transaction with the bank.

(2) A business interest shall exist where any of the following shall be a party to a contract with the bank:


1. the officer or a member of the family thereof;


2. any person wherewith the officer or any member of the family thereof is economically connected by:


(a) owning, directly or indirectly, a qualifying holding therein;


(b) being an officer thereof;


(c) being a partner in a general or limited partnership or a limited liability company.


(3) Any officer shall be obliged upon entering into office to declare in writing to the Management Board (or the Board of Directors, as the case may be) the names and addresses of any persons economically connected therewith and with any member or members of the family thereof and the business interest which the officer and the members of his family hav

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