Law on Credit Institutions
Published in SG, issue 59 of 21 July 2006;amended, issue 105 of 2006; issues 52, 59 and 109 of 2007; issue 69 of 2008; amended, issues 23 and 24 of 2009, effective as of 31 March 2009
Article 2. (1) A bank shall be a legal person which is engaged in the business of publicly accepting deposits or other repayable funds and extending credits and other financing for its own account and at its own risk.
(2) A bank may also conduct the following activities if they are covered by its license:
1. (amended; SG, issue 23 of 2009, effective as of 1 November 2009, amended; Darjaven Vestnik, issue 24 of 2009, effective as of 31 March 2009) providing money transfer services and after 1 November 2009 providing payment services within the meaning of the Law on Payment Services and Payment Systems;
2. (amended; SG, issue 23 of 2009, effective as of 1 November 2009, amended; SG, issue 24 of 2009, effective as of 31 March 2009) issuance and administration of other means of payment (payment cards, traveller’s cheques and letters of credit) in so far as these activities do not fall under the scope of item 1;
3. acceptance of valuables on deposit;
4. depository and custodian activities;
5. (repealed; SG, issue 24 of 2009, effective as of 31 March 2009)
6. financial leasing;
7. guarantee transactions;
8. trading for its own account or for customers’ account with:
a) (amended; SG, issue 24 of 2009, effective as of 31 March 2009) money market instruments – cheques, bills of exchange, deposit certificates, and other beyond the cases under item 9;
b) foreign currency and precious metals;
c) (amended; SG, issue 24 of 2009, effective as of 31 March 2009) financial futures, options, exchange and interest-rate instruments, and other derivative instruments beyond the cases under item 9;
9. (amended; SG, issue 52 of 2007, in force as of 1 November 2007) trading for its own account and for customers’ account in transferable securities, underwriting issues in securities, and other services and activities under Article 5, paragraphs 2 and 3 of the Law on Markets in Financial Instruments;
10. (amended; SG, issue 24 of 2009, effective as of 31 March 2009) money brokerage;
11. (amended; SG, issue 24 of 2009, effective as of 31 March 2009) advice to companies concerning their capital structure, branch strategy and related issues, as well as advice and services concerning company transformations and transactions on acquiring enterprises;
12. (amended; SG, issue 24 of 2009, effective as of 31 March 2009) acquisition of claims originating from delivery of goods or provision of services (factoring);
13. equity acquisition and management;
14. provision of bank safes;
15. collection and distribution of information and references on customers’ creditworthiness;
16. other such activities defined in an Ordinance of the Bulgarian National Bank (BNB).
(3) (amended; SG, issue 52 of 2007, in force as of 3 July 2007) The acquisition, registration, settlement, payment and trade in government securities shall be effected pursuant to the procedure and terms of the Law on the Government Debt. Trade in government securities on regulated markets in financial instruments and multilateral trading facilities shall be effected pursuant to the procedure of the Law on Markets in Financial Instruments.
(4) A bank may not conduct in the line of business transactions other than those provided for under paragraphs 1 and 2, except where necessary for conducting its activities or in the process of collecting its claims on credits made. A bank may set up or acquire institutions for providing ancillary services.
(5) (amended; SG, issue 24 of 2009, effective as of 31 March 2009) Accepting public deposits or other repayable funds, as well as the services as provided for in paragraph 2, items 3–4 shall only be carried out by:
1. a person who has been granted a bank license by the BNB;
2. a bank with a seat in a third country, which has been granted a license by the BNB to conduct bank activities in the Republic of Bulgaria through a branch;
3. a bank authorised by the competent authorities of a Member State to carry out bank activities, which provides services on the territory of the Republic of Bulgaria either directly or via a branch.
(6) In addition to banks, electronic money may also be issued by electronic money institutions, which:
1. have been granted license by the BNB;
2. have been granted license by the competent authorities of a Member State, which provide services on the territory of the Republic of Bulgaria either directly or through a branch.
Article 3. (amended; SG, issue 24 of 2009, effective as of 31 March 2009)
(1) A financial institution is a person other than a credit institution whose principal activity is conducting one or more activities:
1. under Article 2, paragraph 2, items 1, 2, 6–12;
2. acquiring holdings in a credit institution or another financial institution;
3. extending loans with funds other than accepted deposits or other repayable funds.
(2) Financial institutions, which are not subject to licensing or registering under another law, shall be recorded in a register of the BNB in order to conduct activities. The register shall be public, and a certificate shall be issued thereof.
Article 3a. (new; SG, issue 24 of 2009, effective as of 31 March 2009) (1) To be recorded in the register under Article 3, paragraph 2, the financial institution whose trade registration is on the territory of the Republic of Bulgaria shall meet the following requirements:
1. to be established as a joint-stock company, a limited liability company or a limited liability partnership with shares and to have a capital paid in with cash contributions to the amount as specified in a BNB ordinance;
2. the location where the principal business activity is carried out shall be situated on the territory of the Republic of Bulgaria;
3. the persons who manage and represent the company and those who directly or indirectly acquire a qualifying holding in the company’s capital shall have the required qualification, professional experience and reputation.
(2) A foreign financial institution which intends to pursue activities on the territory of the Republic of Bulgaria through a branch or directly shall be recorded in the register based on the notification and the certificate under Article 24, paragraph 2.
(3) The procedure of recording and striking off the register under Article 3, paragraph 2, as well as all documents required for recording shall be specified in the ordinance under paragraph 1, item 1.
(4) The Bulgarian National Bank shall refuse to record a domestic or foreign financial institution in the register if it does not meet the requirements for recording or no required data or documents have been submitted or those submitted contain incomplete, contradictory or untrue information.
(5) The Bulgarian National Bank shall strike off the register a domestic or foreign financial institution at its request or if the BNB establishes that:
1. it no longer meets the requirements of this Article;
2. the record has been made on the basis of untrue information or incorrect documents;
3. it has stopped to fulfil the duties under this Law and the enactment acts thereto or other regulatory requirements for implementing its activity.
(6) Requirements to the activity of the financial institution shall be specified in the ordinance under paragraph 1, item 1.
Article 56. (amended; SG, issue 24 of 2009, effective as of 31 March 2009) (1) The Bulgarian National Bank shall establish and maintain an information system on customers’ monetary obligations to banks under Article 2, paragraph 5 and to financial institutions whose main activity is under Article 2, paragraph 2, item 6 or under Article 3, paragraph 1, item 3.
(2) Banks and financial institutions under paragraph 1 shall provide and may receive information from the system under paragraph 1.
(3) Article 64 shall accordingly apply to the access to the information system.
(4) The conditions and the procedure for the establishment and functioning of the information system, as well as for the provision and receipt of information shall be determined by an ordinance of the BNB.
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