Начало / Supervised entities / Notifications / Information regarding the notification procedure / Marketing of units of AIF in the Republic of Bulgaria by AIFM established in another Member State

Last update: 10 February 2023

This page contains information on the national laws, regulations and administrative provisions governing the marketing requirements referred to in Article 5(1) of Regulation (EU) 2019/1156 of the European Parliament and of the Council of 20 June 2019 on facilitating cross-border distribution of collective investment undertakings (the “CBDF Regulation”).

Marketing requirements for AIFs

Directive 2011/61/EU of the European Parliament and of The Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (AIFMD), provides and regulates the notification procedure in respect of the competent authorities of alternative investment fund managers (AIFMs) which intend to market the units of alternative investment funds (AIFs) in a Member State different from their home Member State.

The provisions of AIFMD are incorporated in the Bulgarian legislation – the Collective Investment Schemes and Other Undertakings for Collective Investments Act (CISOUCIA).

  1. Prior authorization for marketing

1.1. Marketing in other Member States of units or shares of EU AIFs by AIFMs established in Bulgaria (Art. 32 of AIFMD, implemented in Article 245 and Article 249 of the CISOUCIA)

Marketing under Article 245 of CISOUCIA

An AIFM established in the Republic of Bulgaria may market units or shares of an alternative investment fund established in the Republic of Bulgaria or in another Member State, on the territory of another Member State, after submission of a notification to the FSC, to which the following shall be attached:

  1. Data of the host Member State;
  2. Information about the name, Member State in which the alternative investment fund is established, and the address of the alternative investment funds, which the person intends to market;
  3. The statute, rules and other instruments of incorporation of the alternative investment fund;
  4. Information about the name, place of establishment of the master alternative investment fund in the cases of a feeder alternative investment fund;
  5. Information about the name, Member State in which the seat or branch of the depositary are located, and the address of the depositary;
  6. The information under Article 237, Paragraph 1 of CISOUCIA, and any other information provided to investors;
  7. information about the measures for marketing of the units or shares of the alternative investment fund, as well as the measures to prevent marketing to non-professional investors, including where the alternative investment fund manager employs the services of third parties for the services provided to the fund;
  8. The address, as well as the other information necessary for the issuance of an invoice or for the communication of the applicable regulatory fees of the competent authority of the host Member State;
  9. Information about the measures under Article 247a, Paragraph 1 of CISOUCIA.

The FSC shall transmit to the respective competent authority of the host Member State the documentation about the notification within 20 business days from its receipt and the submission of all data and documents. With the submission of the notification documentation, the FSC confirms that the AIFM is licensed by the FSC and that its license includes management of alternative investment funds with the respective investment strategy. The FSC shall immediately inform the applicant of the provision of the notification to the host Member State.

In the event of a material change in the information contained in its original notification, a Bulgaria based AIFM shall notify the FSC at least 1 month before implementing the change as regards any changes planned by the AIFM, and where an unscheduled change occurs – within one day after its occurrence.

An AIFM established in the Republic of Bulgaria, when marketing units or shares of an alternative investment fund to non-professional investors in the territory of another Member State, shall take the necessary measures to ensure:

  1. The processing of subscription, redemption orders and making other payments to the investors in units in accordance with the conditions laid down in the documents required under Article 237, Paragraph 1 of CISOUCIA;
  2. The provision of information to investors on how to submit orders under item 1 and receive redemption amounts;
  3. Facilitation of the exercise of the rights of investors and access to the information under Article 237, Paragraph 1 of CISOUCIA and any other information provided to investors in relation to such rights;
  4. Access of the investors to the information and documents required under Articles 235 and 237 of CISOUCIA for the purposes of acquainting with them or receiving copies thereof;
  5. Provision on a durable medium of the information under items 1 – 4 to the investors;
  6. A contact person for communication with the competent authority of the host Member State.

Information of the measures above is provided in the notification letter.

De-notification

An AIFM established in the Republic of Bulgaria may de-notify marketing on the territory of another Member State of units or shares of some or all of the AIFs notified under Article 245, Paragraph 1 of CISOUCIA, if the following conditions are met:

  1. A blanket offer to repurchase or redeem, free of any charges or deductions, in respect of all such units held by investors in Bulgaria, shall be made public for at least 30 working days, directly or through financial intermediaries, to all investors in the territory of the Member State concerned whose identity is known and for which the notification of marketing is withdrawn;
  2. The intention to terminate the marketing of units or shares of some or all AIFs in the territory of the Member State is made public through publicly available means, which are usually used in the marketing of units of alternative investment funds, including electronically;
  3. Any contractual arrangements with financial intermediaries or third parties entrusted with functions are amended or terminated with effect from the date of withdrawal of the notification of marketing, in order to prevent any new or subsequent, direct or indirect, marketing or placement of the units referred to in the notification under Article 247c of CISOUCIA.

The requirements under item 1 shall not apply to managers of closed-end alternative investment funds and to funds under Regulation (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds.

As of the date of withdrawal of the notification, the AIFM shall cease any subsequent marketing or placement of the units or shares of the managed alternative investment fund, for which the notification of marketing has been withdrawn.

Marketing under Article 249 of CISOUCIA

An AIFM established in another Member State, may market an AIF established in the Republic of Bulgaria, or in another Member State, or an AIF established in a third country, on the territory of the Republic of Bulgaria, based on a notification received by the FSC from the competent authority of the home Member State of the AIFM.

The notification documents and information that have to be provided are the same as the documents required for the notification under Art. 245 of CISOUCIA above. In addition to this, a confirmation by the competent authority of the home Member State that the AIFM is licensed by the competent authority of the home Member State and that its license includes management of AIFs with the respective investment strategy, shall be attached.

The marketing of the units or shares of the AIF, as well as the introduction and implementation of measures to prevent marketing to non-professional investors, including where the AIFM employs the services of third parties for the services provided to the fund, should be in compliance with the requirements of the legislation of the Republic of Bulgaria.

Marketing of units or shares of particular alternative investment funds by an AIFM established in another Member State in accordance with this section shall refer only to professional investors.

The de-notification arrangements are the same as the requirements under Art. 245 of CISOUCIA above.

Non-EU AIFs managed by an EU AIFM: application of AIFM notification procedure (Art. 36 AIFMD). Prior authorization from the FSC is required.

1.2. Marketing of Non-EU AIF by an AIFM established in Bulgaria with a passport notification (Art. 35 of AIFMD, implemented in Art. 240 of CISOUCIA)

An AIFM established in the Republic of Bulgaria may market in the territory of the Republic of Bulgaria units or shares of an AIF established in a third country, and a feeder AIF established in a Member State, which does not meet the requirements under Article 239, Paragraph 2 of CISOUCIA, after it has made a notification to the FSC, if the following conditions have been met:

  1. The AIFM meets all the requirements of the CISOUCIA;
  2. There are appropriate cooperation arrangements in place between the FSC and the competent authorities of the country where the AIF is established, which provide effective information exchange with a view to the performance by the FSC of its supervision powers;
  3. The third country where the AIF is established is not listed as a Non-cooperative Country or Territory on the list of the Financial Action Task Force;
  4. There is a concluded agreement between the Republic of Bulgaria, the third country where the AIF is established and any other Member State, where units or shares of the respective AIF will be marketed, in accordance with the standards established in Article 26 of the Model Tax Convention on Income and on Capital of the Organization of Economic Cooperation and Development, which provides effective information exchange on tax matters.

Prior authorization from the FSC is required – the FSC shall issue a permission for marketing of the fund.

1.3. Marketing of non-EU AIFs managed by AIFMs established in an EU Member State to professional investors in Bulgaria (Article 36 of the AIFMD, implemented in Article 241 of CISOUCIA)

An AIFM established in the Republic of Bulgaria may market in the territory of the Republic of Bulgaria units or shares of an AIF managed thereby established in a third country and without meeting the requirements under Article 240 of CISOUCIA, if the following conditions have been met:

  1. In the management of the AIF, the AIFM meets all the requirements of CISOUCIA with the exception of Article 233 of that act;
  2. The AIFM has ensured the performance of the functions under Article 233, Paragraph 1 of CISOUCIA by one or more third parties, and has provided to the FSC information about their names and seats;
  3. There are appropriate cooperation arrangements in place in line with the international standards for the purposes of systemic risk monitoring between the FSC and the competent authorities of the country where the AIF is established, which provide effective information exchange with a view to the performance by the FSC of its supervision powers;
  4. The third country where the AIF is established, and if there are no licensing or registration requirements – where it has its seat, is not listed as a Non-cooperative Country or Territory on the list of the Financial Action Task Force.

Prior authorization from the FSC is required – the FSC shall issue an permission for marketing of the fund.

1.4. Marketing of AIFs managed by non-EU AIFM on the territory of the Republic of Bulgaria (Art. 42 AIFMD, implemented in Art. 251 of CISOUCIA).

Notwithstanding the requirements under Art. 37, 39 and 40 of AIFMD (Section IV of CISOUCIA), an AIFM originating in a third country may market in the territory of the Republic of Bulgaria an AIF to professional investors without marketing it in the territory of another Member State, if the following conditions have been met:

  1. In managing the AIF, the AIFM meets all the requirements of the CISOUCIA, including the requirements of Articles 235 – 237 of that act, as well as the requirements of Article 234, where applicable;
  2. There are appropriate cooperation arrangements in place in line with the international standards for the purposes of systemic risk monitoring between the FSC, the competent authorities of the country where the AIF is established, the competent authorities of the third country where the seat of the AIFM is located, which provide effective information exchange with a view to the performance by the FSC of its supervision powers;
  3. The third country where the seat of the AIFM is located, as well as the third country where the third-country AIF is established, is not listed as a Non-cooperative Country or Territory in the list of the Financial Action Task Force.

Prior authorization from the FSC is required – the FSC shall issue an authorization for marketing of the AIF.

1.5.Marketing of AIFs to retail investors in Bulgaria

In case of marketing of AIF to retail investors the rules for national investment funds (NIF) apply (Art. 171 and following of CISOUCIA).

  1. Marketing communications

All marketing communications to investors shall comply with the requirements of Article 4, Paragraphs 1 – 3 of Regulation (EU) 2019/1156 of the European Parliament and of the Council of 20 June 2019 on facilitating cross-border distribution of collective investment undertakings and amending Regulations (EU) No. 345/2013, (EU) No. 346/2013 and (EU) No. 1286/2014 (OJ, L 188/55 of 12 July 2019), and the ESMA Guidelines on Marketing Communications.

In case of retail AIF the rules for marketing materials for NIF apply – Art. 182, par. 4 of CISOUCIA, and Art. 174 of Ordinance 44.

Marketing communications are not verified by the FSC. However, such verification could be made by the FSC on a discretionary basis.

  1. Marketing to retail investors or to professional investors

The marketing to professional investors is made according to the rules of AIFMD as implemented in the CISOUCIA.

The marketing to retail investors is allowed only in accordance with the rules for national investment funds (NIF) (Art. 171 and following of CISOUCIA).

  1. Reporting obligations in relation to marketing

There aren’t any reporting requirements in relation to marketing of AIFs.

  1. Distribution of open-ended AIFs and of closed-ended AIFs

The rules for both types of AIFs are the same in case marketed to professional investors.

When marketed to retail investors, the NIF rules apply (Art. 171 and following of CISOUCIA).

  1. Other rules governing the marketing of AIFs applicable within the jurisdiction of the competent authority

Fees

The Bulgarian legislation does not provide for any provisions about initial or subsequent registration fees for passporting of AIFs, nor annual supervision fees for marketing of AIFs in Bulgaria.

Language

According to Art. 193, para 2 of Ordinance 44 the information under Art. 22-24 of AIFMD (Art. 235-237 of CISOUCIA) should be provided in Bulgarian. Additionally, the information under Art. 23 of AIFMD could be provided in another language after a written consent by the investor.

The Bulgarian Collective Investment Schemes and Other Undertakings for Collective Investment Act (CISOUCIA) is available in English on this link: https://www.fsc.bg/wp-content/uploads/2022/08/Collective-Investment-Schemes-and-Other-Undertakings-for-Collective-Investments-Act.pdf

Ordinance No 44 of 20.10.2011 on the requirements to the activity of collective investment schemes, their management companies, national investment funds, alternative investment funds and managers of alternative investment funds is available only in Bulgarian on this link: https://www.fsc.bg/wp-content/uploads/2022/07/N_44_DV_55_2022.pdf

Other requirements 

In addition to the provisions referred to above, which are set out specifically for the marketing of AIFs, there may be other legal provisions that may apply when marketing them in Bulgaria, although they are not specifically designed for the marketing of AIFs, depending on the individual situation of those involved in the marketing of shares or units of AIFs. Marketing in Bulgaria may trigger the application of other requirements, such as Consumer Protection Act (https://psc.egov.bg/documents/20124/0/CONSUMER+PROTECTION+ACT_37.pdf).

Disclaimer: The FSC has taken reasonable care to ensure that the information on the national provisions governing the marketing requirements for AIFs in Bulgaria included on this webpage is up-to-date and complete. The FSC is not responsible for maintaining external websites and is not liable for any error or omission on any external website to which hyperlinks are provided on this webpage.

The following is a non-exhaustive list of national laws that could be applicable and FSC is not liable for any omission in that list. Supervision of the requirements deriving from these laws is not under the supervision of FSC. The applicability of these requirements, and any other legal requirements, should be assessed before marketing or investing in an AIF. Where uncertainty exists, those marketing or investing in AIFs should obtain independent advice as to the applicable requirements to their individual situation.

Contacts:

Inquiries in relation to marketing of AIFs in Bulgaria: delovodstvo@fsc.bg, bg_fsc@fsc.bg

Designated email for AIFMD notifications: AIFMD-notification@fsc.bg

Summary of the marketing requirements for AIFs

  • Notification and prior authorisation for marketing:

– Art. 245 and 249 of CISOUCIA – notification procedure;

– Art. 240 and 241 and Art. 251 of CISOUCIA – requirement for prior approval of marketing.

In case of marketing to retail investors the rules for national investment funds (NIF) apply (Art. 171 and following of CISOUCIA).

2)         The format and content of marketing material, including the identification of the information and documents to be notified to the authority prior to the commencement of marketing:

Only in case of retail AIF the rules for marketing materials for NIF apply – Art. 182, par. 4 of CISOUCIA, and Art. 174 of Ordinance 44.

3)         Marketing communications are not verified by the FSC.

4)         Marketing to retail investors or to professional investors:

Marketing to professional investors – AIFMD rules apply.

Marketing to retail investors is allowed only in case of NIFs where national rules apply (Art. 171 and following of CISOUCIA).

5)         Reporting obligations in relation to marketing – none;

6)         Passporting rules – Art. 245 and 249 of CISOUCIA.

7)         Distribution of funds established in a non-EU Member State under the national private placement regime (if applicable): N/A

8)         Distribution of open-ended AIFs and of closed-ended AIFs – the rules for both types of AIFs are the same in case marketed to professional investors. When marketed to retail investors, the NIF rules apply (Art. 171 and following of CISOUCIA).

9)         De-notification of arrangements made for marketing:

Article 247b and Article 250a of CISOUCIA transposing Article 32a of AIFMD.

10)       Additional requirements applicable in particular to the marketing of certain categories of AIFs that exist under national law (e.g. private equity or real estate AIFs) – N/A;

11)       Any other rules governing marketing of AIFs applicable within the jurisdiction of the NCA:

Fees: no initial or subsequent registration fees for passporting of AIFs, nor annual supervision fees for marketing of AIFs in Bulgaria.

Language requirements: Art. 193, para 2 of Ordinance 44.

Approval under Art. 251 of CISOUCIA – the requirements to the documents and the language are set in Art. 194 of Ordinance 44.