Bulgaria’s FSC Grants Management and Distribution of Collective Investment Schemes (CIS)

Overview

The Bulgarian Financial Supervision Commission (FSC) has outlined the rules for managing and distributing Collective Investment Schemes (CIS), including regulation of alternative investment funds, undertakings for collective investments in transferable securities, and exchange-traded funds. The FSC applies European Securities and Markets Authority (ESMA) and European Banking Authority (EBA) recommendations and guidelines in its supervisory practice, ensuring a holistic approach to all CIS.

Crowdfunding Regime

Bulgaria has implemented the EU’s Crowdfunding Regulation (2020/1503), which came into effect at the end of 2021. The regulation applies directly in Bulgaria, and fintech companies offering crowdfunding services must comply with its requirements.

• The FSC is responsible for licensing and supervising crowdfunding service providers.
• Banks are regulated by the Bulgarian National Bank.
• Regulatory assessment for fintech companies providing alternative finance products will depend on the specific nature of their business and activities.

Alternative Investment Funds

Managers of alternative investment funds require a licence if they manage directly or indirectly funds with assets exceeding €100 million (or its equivalent in Bulgarian leva).

• EU management companies can operate in Bulgaria under the right to establishment or freedom to provide services, subject to passporting procedures.
• Peer-to-peer and marketplace lending activities are not specifically regulated in Bulgaria unless considered crowdfunding, which is subject to the EU Crowdfunding Regulation.
• Alternative fund managers must register with the FSC if they meet regulatory qualification requirements.

Payment Services and Open Banking

Bulgaria’s Payment Services and Payment Systems Act transposes the EU Payment Services Directive (PSD2), requiring payment services providers to obtain a licence from the Bulgarian National Bank. EU payment service providers can operate in Bulgaria under the right to establishment or freedom to provide services, subject to passporting procedures.

• There are no specific laws promoting open banking standards, but the PSPSA provides a framework for introducing such standards through application programming interfaces (APIs) or other means.

Insurance Products and Credit References

Fintech companies selling or marketing insurance products in Bulgaria must comply with relevant regulations, which transpose the Insurance Distribution Directive. The FSC regulates insurance companies, intermediaries, and ancillary intermediaries.

• There are no restrictions on providing credit references or credit information services in Bulgaria, as Regulation (EU) No. 462/2013 applies directly to the country.