The Financial Supervision Commission has sent notification about its consent for the portfolio transfer from “Credendo - Short-Term EU Risks úvěrová pojišťovna, a.s.” to “Credendo - Short- Term Non - EU Risks SA”
The Financial Supervision Commission has sent notification about its consent for the partial portfolio transfer from UK P&I Club N.V to International Transport Intermediaries Insurance Company (Europe) Limited
The Financial Supervision Commission has sent notification about its consent for the portfolio transfer from “UnipolSai Assicurazioni S.p.A.” to “Unipol Gruppo S.p.A.”
The Financial Supervision Commission (FSC) has been notified by the competent authority of the Republic of Italy (IVASS) of the forthcoming portfolio transfer from the insurance undertaking “Societa Cattolica di Assicurazione S.p.A.” to “Generali Italia S.p.A.”, both with head offices in the Republic of Italy. After reviewing the portfolio documents, the FSC decided to send a letter to the national competent authority of the Republic of Italy on granting consent for the transfer of the insurance portfolio from the “Societa Cattolica di Assicurazione S.p.A.” to “Generali Italia S.p.A.”.
After the insurance portfolio transfer “Societa Cattolica di Assicurazione S.p.A.” to “Generali Italia S.p.A.” will continue to operate on the territory of the Republic of Bulgaria under the conditions of the freedom to provide services.
The challenges facing the FSC are the fintech industry and the adoption of the euro
Boyko Atanasov– Chair of the Financial Supervision Commission
On March 15, 2019, Boyko Atanasov was elected as Chair of the Financial Supervision Commission by the 44th National Assembly of the Republic of Bulgaria.
Mr. Boyko Atanasov was the Deputy Chair of the Financial Supervision Commission, Head of the Investment Supervision Department for the period 2017-2019. He has more than 20 years of professional experience in the revenue administration system – from 2013 to 2017 he was the executive director of the National Revenue Agency.
Mr. Atanasov graduated from the University of National and World Economy, majoring in Planning and Forecasting of Economic Systems and has a number of economic specializations in Bulgaria and abroad.
Mr. Atanasov, what „are“ the trends for the development of the non-banking sector in 2023?
In the context of the post-pandemic period, global digitization, the European Green Deal and the preparation of the financial sector for entry into the euro area the Financial Supervision Commission continues to work for sustainable stability of the insurance market in Bulgaria, to introduce innovations in the regulation of the capital market, as well as and for absolute strictness and complete transparency of the actions and processes of the pension insurance market.
Capital markets
The non-banking financial sector, part of which is the capital market, is an alternative for financing business activities, complementing the opportunities offered by the banking sector. Undoubtedly, one of the most dynamic and rapidly developing sectors of the capital market is the sector of investment funds.
The development of the mutual funds market is essential for both private and corporate investors seeking higher returns. A positive development trend is also emerging in relation to alternative investment funds as a form of collective investment. In recent years, there has been a steady increase in interest in this relatively new subject of the Bulgarian capital market, but with huge opportunities for progress. This type of financing complements bank financing, while alternative investment funds can offer financing for riskier activities. A significant part of them in Bulgaria direct their investment strategies to micro, small and medium-sized enterprises in the form of equity investments and the provision of convertible loans.
I can say that there are increasingly high expectations regarding this significant segment of the fund industry, carrying a huge potential for development and giving requests to become an important factor in the capital market.
Insurance market
Many of the processes in insurance have already been digitized, including underwriting policies, filing claims, intermediary accountability. Digitization in the field of insurance will continue in the coming years, with the ultimate goal being to offer all products online. Sales through electronic channels will remain stable in both general and life insurance. Digitization will lead to even more personalized products where individuals will compile the risks themselves depending on their individual needs.
It is my view that the question of capital adequacy of insurers will continue to be a leading one in terms of supervision. All of them will have to implement the requirements of IFRS-17, which will present them with new challenges – to reorganize their operations and their systems so as to generate the information and data they need to implement the requirements of the standard.
We are witnessing all the preconditions that in the coming years the insurance market will continue to develop with new products related to both cyber risks that need insurance coverage and products concerning the impact of the climate on various activities and especially on agriculture.
Social insurance market
The regulatory policy carried out by the FSC regarding the activity of supplementary pension insurance is already 20 years old, and the sector has undergone remarkable development, especially in the last three years. Currently, the investment portfolios of the pension funds are well structured and highly diversified, with adequate reserves to guarantee the payment of lifetime pensions. The assets of the pension funds are subject to daily inspection by the Financial Supervision Commission, in its capacity as a specialized supervisory body. I can say that the activity of supplementary pension insurance is one of the most strictly regulated in our economy.
Just a few days ago, a change in the Social Security Code was passed by the parliamentary social committee, which will allow Bulgaria to introduce the so-called Pan-European Pension Product , which is commonly called a “European pension”. Through this product, Bulgarian citizens will have the opportunity to voluntarily provide for an additional pension within the EU, even if they change their residence from country to country, without administrative or financial inconveniences. They will also have access to many more pension products developed by European companies and will be able to choose higher-yielding but riskier or more conservative schemes. In this way, funds from other countries in the European Union will be able to operate on the Bulgarian market and pay additional pensions to people who are voluntarily insured in them as part of the third insurance pillar.
What are the strategic goals that the Commission sets for itself?
The FSC has entered a new strategic period covering the period from 2022 to 2024. The regulator’s development strategy includes a clearly defined long-term development vision supported by a strong expert team and maximum deployment of digitization processes in the non-banking sector. All this will be accompanied by constructive dialogue with all stakeholders in the processes regulated by the FSC. An important part of the development of the Bulgarian capital, insurance and social insurance market is the active and effective discussion with businesses in the direction of developing concepts and sustainable strategies. Our goal is to be predictable in our actions and to show objectivity when making decisions on which the development of Bulgaria depends.
In order to achieve results in accordance with the set development strategy, the Financial Supervision Commission has passed and will continue its course through specific steps such as the development of financial literacy of users of financial services and investors, increasing the scope of the communication process by conducting regular meetings with FinTech companies to discuss minimal risks and maximum benefits from technologies, promoting the development of start-up companies by activating the capabilities of the Innovative Hub, as well as adapting the new regulatory framework for crowdfunding. Together with the participants in the non-banking financial sector, we create a sustainable and innovation-friendly business environment, with an emphasis on the need for a partnership between the national regulator and business.
The already functioning Innovation Hub provides a single point of contact for interaction between us as a supervisory authority and the respective FinTech companies. Thanks to the introduced digital innovation, persons supervised by the Financial Supervision Commission and FinTech companies can count on assistance when they need clarification on the regulations or when applying for a permit for their activities.
Can we talk about digitization of the non-banking financial sector and what is the role of the FSC?
Technological advances already offer the financial sector tremendous opportunities to meet growing customer needs and regulatory requirements. Increasingly, staying competitive will mean that financial market participants stay abreast of the latest developments in fintech so that companies can ensure they are taking advantage of the best possible technology solutions.
I believe that we, as a regulatory and supervisory body of the insurance, investment and social insurance market, are already and will be observers of the innovation implementation process in order to know in detail how they work and are implemented. The goal is to ensure adequate evaluation of new product and business models. We also have a responsibility to balance the risks of innovations against the benefits to consumers; we also need to find the balance between encouraging innovation and protecting customers from potential downsides.
We will need to assess and where appropriate, adjust the regulatory framework, especially on the part of market behavior, in order to adequately deal with changing risks and business models. We also face the task of having the capacity to be able to react and supervise FinTech solutions in the future.
Last but not least, the Commission is already working on its digital transformation project to meet the needs of supervised persons so that all administrative services can take place in a digital environment. The result will be time saved for businesses and citizens. According to a report by the International Monetary Fund (IMF), for example, the level of development of e-government correlates with the level of foreign direct investment. The easier it is to do business in a country, the more companies want to invest in it. We hope that, as cause and effect, this will also stimulate the entry of new participants in the capital markets.
In response to the changing environment, the Commission is using also social networks as additional communication channels to meet the new challenges of its goal of financially literate consumers of financial services. At the end of 2021, our digital campaign #invest safely was launched. In 2022, we renewed the design and content of the website of the Financial Supervision Commission, and in a few days we will present the institution’s mobile application – FSC Mobile. With it, users will have access to the Commission’s database of licensed investment firms, insurers and pension insurance companies, they will be able to check in real time the status of the digital complaint they have submitted, contact us directly, and view important dates from the supervisiom calendar.
What are the challenges you expect to face in the upcoming year?
The Financial Supervision Commission faces several main topics in the current and coming period: the development of the fintech industry and the crypto asset market, the adoption of the euro as the national currency, as well as the active protection of consumers. The FCS is a major participant in the process of creating the National Plan for the Introduction of the Euro in Bulgaria. The Commission’s vision for this key process for the Bulgarian economy includes the systematization of the necessary measures and actions in connection with the conversion of financial instruments. We intend to carry out the necessary monitoring of the expected stages for the adaptation of the clearing and settlement systems to work with the euro.
And most importantly for me, the Financial Supervision Commission remains fully focused on its main priorities: to protect consumers of financial services, to maintain the stability of the non-banking financial sector and to promote the development of the insurance, investment and social insurance sectors.
Mr. Boyko Atanasov, Chair of the Financial Supervision Commission, presented some of the results achieved by the FSC for the period 2019-2022, as well as important highlights of the adopted Development Strategy of the FSC for the period 2022-2024. The presentation today was within the framework of a round table on the topic “Strategic Management and Regulation of Business Processes in the State”, organized by the Higher School of Insurance and Finance (VUZF) and its Laboratory for Academic and Applied Research.
The Chair of the FSC presented to the audience some of the results achieved for the last three-year period. 2019 – 2022, on the one hand, is the time frame of the FSC Strategy for the specified period, and on the other hand, this period also coincides with the election of Boyko Atanasov for the position of Chair of the Commission. “For the three-year period, we managed to ensure stability of the insurance market, we introduced innovations in the regulations of the capital market and strengthened the pension-insurance market to the extent of exceptional rigor and full transparency. All this happened in sync with the development of the organization – digitization, optimized processes and at the same time improvement of the team of high-level experts of the FSC. We worked with public visibility for every single innovation or sanction we made.”
Mr. Atanasov briefly presented the new Strategy for the development of the FSC for the period 2022-2024 as a basic and important tool for achieving the set goals and expected results. “The facts about the results achieved so far, presented in the report for the previous period, presented on the official page of the FSC, show that the Strategy of the FSC is well formulated and the main priorities and set sub-goals are being implemented. The strategy of the FSC for the upcoming period is aimed at several main priorities, with the ultimate goals being the reduction of administrative burden, flexibility and adaptability to the business environment, and optimization of processes through digitization.”
During the round table discussions, he also announced the upcoming presentation of the new institutional site of the FSC and the Commission’s mobile application, the purpose of which is to facilitate users in the process of obtaining information about regulations in the non-banking financial sector. Boyko Atanasov also described the functions of the Innovation Hub, providing a single point of contact with FinTech companies. It was clearly emphasized that the establishment of a unified information system for submitting and receiving information from supervised persons in an electronic standardized format is also in progress.
“We act as a referee, not a player. In detail – we aim to create conditions for equality in the criteria for access to capital markets and opportunities for fair competition between participants. When we give trust and fair treatment, we get trust and fair treatment. This should be the basic principle of functioning not only of the Commission, but also of any other state organization. The governance style should be authoritative, not authoritarian.” Mr. Boyko Atanasov also stated.
The presentation ended with an emphasis on the regulatory functions of the FSC and the resulting benefits for users of financial services, by ensuring stable and secure financial markets.
During the event, the panelists – leading representatives of state institutions and regulatory bodies, experts, representatives of the academic and scientific field, represented by the Fiscal Council, the Executive Agency for the Promotion of Small and Medium Enterprises, the Bulgarian Development Bank, Unicredit Bulbank, the Bulgarian forum of business leaders, VUZF, the Bulgarian National Bank, the Bulgarian Stock Exchange and the FSC discussed the interaction between business and the state, strategic directions and priorities, the state budget as instruments in the implementation of this policy, as well as how far the regulatory function of the state should extend.
Right on the birthday of Prof. DrEconSc Mihail Dinev, December 15, a large round table was held – “The work of Prof. DEconSc Mihail Dinev and the future of control” in UNWE.. Assoc. Prof. Dr. Daniela Petrova, head of the Financial Control Department, launched the event by reminding that Prof. Dinev is the founder of the Financial Control Department at UNWE and has great merits for the development of financial control in the country
The Chair of FSC – Boyko Atanasov, was among the official participants in the event, among other professionals distinguished by their contribution to the development of control in Bulgarian institutions: Prof. Ognyan Simeonov, Chair of the Commission for Public Oversight of Statutory Auditors; Boris Mihaylov, Executive Director of the National Revenue Agency; Tsvetan Tsvetkov, Chair of the National Audit Office, Boyko Kostov, Chair of ICPA; Vesela Karaivanova, Deputy Governor of the National Insurance Institute; Prof. Dr. Grigoriy Vazov, president and rector emeritus of the Higher School of Insurance and Finance and many others.
The round table began with acknowledgments to Prof. DrEconSc Mihail Dinev for his undeniable authority as a scientist and expert in his field. The participants in the event also shared memories full of respect for a person who marked the history of UNWE with his remarkable professional experience, brilliant ideas combined with energy, modern thinking and positive approach.
During the discussion dedicated to the new control environment, Mr. Atanasov shared that for him it is the result of the new economic reality. “When the environment changes, we must be keep up in taking control actions, we must be flexible, because our role is above all to protect the public interest. I see the control activity and the work in the Commission not in terms of hibernation, but rather in a proactive strategic position”, he added. The Chair of the FSC pointed out the challenges facing the non-banking sector – alternative investment funds, financial innovations, the Green Deal and the European legislative framework for digitalization, as defining the equation of the new economic reality – they provide new horizons, but also bring new risks.
Mr. Atanasov also commented on the relationship between academia and practice, stating that “the symbiosis between theory and practice is a valuable way of thinking and acting.The new economic realities must predetermine the preparation of young people and provoke the need for new knowledge, and that is precisely why it is important that the cooperation between the FSC and UNWE is based on a two-way sharing of practical experience by experts and the academic environment.”.
Boyko Atanasov, Chair of the FSC, Tsvetan Tsvetkov – Chair of the National Audit Service, Prof. Dr. Dimitar Dimitrov, Rector of UNWE, Prof. Dr. Rumen Brusarski, Dean of the Faculty of Finance and Accounting, UNWE, Boyko Kostov – Chair of ICPA
The commemorative event ended with the presentation of honorary plaques by the Faculty of Finance and Accounting to: Tsvetan Tsvetanov, Chair of the National Audit Service and Boyko Kostov, Chair of the Institute of Chartered Professional Accountants in Bulgaria.
The Chair of the Financial Supervision Commission – Boyko Atanasov and the Rector of the University of National and World Economy – Prof. Dr. Dimitar Dimitrov discussed the possibilities for the implementation of an analysis and assessment of the development of the non-banking financial sector until 2030. The study aims to predict and plan how the markets will develop, to help companies to plan their income and expenses, and to find out how regulations affect the insurance sector.
“I believe that a future cooperation between the Financial Supervision Commission and the UNWE will be extremely useful for the research process of preparing analyzes and evaluation of the macroprudential policy for the non-banking financial sector, the determination of national policies and strategies, and will contribute to the economic growth of the country. I am also convinced that our joint efforts and our common commitment will yield an excellent result.” shared Mr. Atanasov.
Prof. Dimitrov, on his part, expressed his belief that the implementation of scientific research, which will be supported by the FSC, will facilitate, enrich and support the professors of the university who are ready to work for its realization.
As a subsequent step in the initiated inter-institutional relations, the Financial Supervision Commission will organize a presentation of the goals and methods for the implementation of the UNWE study to the Bulgarian insurance community.
On October 5, 2022, in the presence of officials and guests, an anniversary conference was held on the occasion of 140 years since the beginning of insurance in Bulgaria and 30 years since the establishment of the Association of Bulgarian Insurers (ABI). The prestigious event is organized by ABI, a long-standing partner of the Financial Supervision Commission (FSC).
The conference was opened by Mr. Konstantin Velev – Chair of the Board of ABI, Mrs. Daniela Dobreva – Deputy Minister of Finance and Mr. Boyko Atanasov – Chair of the Financial Supervision Commission. Leading figures of European insurance were also present – Mrs. Petra Hielkema, President of the European Insurance and Occupational Pensions Authority (EIOPA), Michaela Köhler – Director General of the European Federation of Insurers Insurance Europe and Didier Millero – Head of the Insurance and pension insurance Sector in the Directorate General “Financial Stability, Financial Services and Capital Markets Union” of the European Commission.
Mr. Velev set the highlights of the conference – regulations, competitiveness and the growing climatic, demographic and digital risks of the modern age, as well as the search for appropriate protection against them.
In her speech, the Deputy Minister of Finance – Ms. Daniela Dobreva emphasized the successful partnership of the Ministry of Finance with the FSC and the ABI, as “the goal is to increase the protection of users of insurance services, guarantee financial stability and preserve the competitiveness of Bulgarian insurers”.
The Chair of the FCS – Mr. Boyko Atanasov welcomed the participants and shared that “the role of the Association of Bulgarian Insurers is to be a pillar of security, a balancer for diplomacy, a visionary for conquering new horizons. I believe that the words that best describe our joint work with the insurance sector in Bulgaria are dialogue, technological orientation and cause”.
The Financial Supervision Commission will continue to support the insurance industry and work to achieve a smooth implementation of the new regulations affecting this sector in the country. As of the first half of the year, it represented 3.9% of GDP calculated on the basis of gross premium income (insurance penetration), and 8.2% calculated on the basis of insurers’ assets (2021 data). For the first six months of 2022, Bulgarian insurers realized gross premium income in the amount of BGN 1.7 billion, taking into account an increase in written premiums of 11%, and for the same period benefits were paid in a total amount of BGN 684 million , with the same growing by 10% on an annual basis.
The cited data are an indicator of a stable insurance market, which is a prerequisite for a higher level of competitiveness and at the same time for maintaining confidence in it. Innovation is about to be created and introduced, with the potential to position insurance companies and their customers at another level.
During the conference, Mr. Vladimir Savov, Deputy Chair of the FSC, Head of the Insurance Supervision Department, took part in the discussion part of the panel “Insurance Market: Regulations and Competitiveness – in Search of the Balance”. Topics fundamental to insurance were discussed and effective policies were outlined to stimulate the development of the sector, with all the resulting benefits for the economy and society.
On May 19, 2022, for the fourteenth year in a row, the most prestigious annual awards in the insurance and pension insurance sector in our country were presented – Insurer of the Year, Pension Insurance Company of the Year and Insurance Broker of the Year for 2021, as well as the annual awards of the Prof. Dr. Veleslav Gavriyski Foundation.
The prestigious awards are organized by the Higher School of Insurance and Finance (VUZF), the Association of Bulgarian Insurers (ABI), the Association of Supplementary Pension Insurance Companies (BASPSC), the “Prof. Veleslav Gavriyski” foundation and the Bulgarian Association of Insurance Brokers (BAIB). The criteria by which the winners are determined are announced publicly, and an expert jury of representatives of the organizers nominates the awardees in 9 categories.
Among the official guests at the ceremony this year were Boyko Atanasov, Chair of the Financial Supervision Commission, Diana Yordanova – Deputy Chair of the Financial Supervision Commission, Head of the Social Insurance Supervision Department and Vladimir Savov – Deputy Chair of the FSC, head of the Insurance Supervision Department.
“I believe that, together with the professional community, we will continue to work for the sustainable stability of the non-banking financial sector in Bulgaria, to preserve trust and confirm the standards of good insurance and insurance practices”, said Mr. Boyko Atanasov. He presented the grand prize Insurer of the Year in the Non-Life Insurance category to IC Bulstrad Vienna Insurance Group AD.
Ms. Diana Yordanova, Deputy Chair of the FSC, Head of the Social Insurance Supervision Department presented the Pension Insurance Company of the Year 2021 award in the category Supplementary Mandatory Pension Insurance. The winner was PIC Doverie AD.
The Insurance Broker of the Year award in the Non-Life Insurance category, which went to SDI Group OOD, and the Insurer of the Year – Life Insurance award, winner DZI Life Insurance EAD, were presented by Mr. Vladimir Savov, Deputy Chair of the FSC, Head of the “Insurance Supervision department.
In sync with new technologies, to improve the level of public awareness related to the non-banking financial sector and to protect consumers of financial products and services, the Financial Supervision Commission (FSC) in December last year launched the digital campaign #invest safely. Increasing financial literacy in the field of safe investing remains among the leading chief goals of the FSC, which continues its initiative to popularize the campaign during the World Money Week (March 21-27).
Experts from the Financial Supervision Commission, in partnership with industry organizations, represented by the Bulgarian Association of Licensed Investment Brokers and the Investor Compensation Fund, will present to students a series of public lectures under the title “Investment Security in the Digital World”, dedicated to the protection of investors, the recognition of legitimate investment firms and the functioning of the capital market.
The initiative marks the beginning of meetings between experts and students, within the framework of the first event, with graduates of one of the most authoritative and largest business universities in Bulgaria – the University of National and World Economy. The main objective of the #invest safely – campaign will be presented to the audience to meet the needs of society with up-to-date information regarding the areas regulated by the Financial Supervision Commission in the non-banking financial sector – capital markets, insurance and pension insurance.
“Our participation in the World Money Week and our partnership with higher education institutions, within whose reach are the economic professionals in the country, is one of the steps in the strategy of our commitment to increase financial literacy among young people. Our vision is also to position Bulgaria among European countries whose young people have basic preparation for their meeting with the world of investments, in the conditions of a digitized non-banking financial sector”, said Mr. Boyko Atanasov, Chair of the Financial Supervision Commission
Within the educational initiative of the Financial Supervision Commission, future economists from 5 leading universities in the country – UNWE, Faculty of Economics of Sofia University, AUBG, VUZF and EU-Varna will acquire key competencies for investing in the capital markets and protecting against financial fraud through the digital events specially organized for them.
On the website https://investsafely.fsc.bg/, and YouTube in the LinkedIn channels of #investsafely, anyone interested can find useful tips and be introduced to investing, through news, video content and a list of licensed investment firms.
On the occasion of World Money Week, FSC experts will take part as guest speakers in the events “From Zero To Fintech”, organized by the Bulgarian Fintech Association and the webinar on “Security of digital financial instruments: Pay safely on the Internet!” initiated by Junior Achievement. They will also contribute as part of the jury of the “My Business” competitions – for the youngest and financial #LIFEHACK – for adolescents in high school.
On December 6, 2022, the Association of Banks in Bulgaria (ABB) gathered prominent representatives of the financial sector on the occasion of Banker’s Day. The official event began with a conference, which was opened by Mrs. Diana Miteva – Chair of the ABB Board of Directors.
The first panel of the conference – moderated by Mrs. Miteva, with participants – Radoslav Milenkov, Deputy Governor of the Bulgarian National Bank, Boyko Atanasov, Chair of the Financial Supervision Commission, Lyudmila Petkova, Deputy Minister of Finance, was dedicated to the new realities – macroeconomic factors and regulatory environment.
The Chair of FSC congratulated the banking community on the occasion, sharing his belief that the banking and non-banking sectors are actually 2 sides of the same coin in the equation of the new economic reality.
“Regulators must place emphasis on those regulations that enable businesses to make informed and ethical decisions in a changing environment. We must create new principles that are relevant in the new reality. The understanding is that the regulators are the anchor of the sailing ship is incorrect, we are the compass that protects it from hitting underwater rocks, we are partners of businesses and investors. My vision for FSC is not one of hibernation, but rather a proactive strategic position in which to look for challenges, both at the macroeconomic level and at the operational business level. I believe that regardless of the new economic reality and geopolitical situation, today we all declare our willingness to work together for the stability and future of the Bulgarian economy, upholding the global digitalization, the European Green Deal and the upcoming entry into the euro area- trends that provoke us to be united in order to be sustainable, on the one hand, and on the other – to boldly face any change,” he stated.
According to him, the biggest challenge is undoubtedly the introduction of the euro, on which the future of the Bulgarian economy and life in the country depends. Leading among other challenges are financial innovations, which can position the capital market at a new level, but also must be carefully introduced. The Chair of FSC also shared that “we ourselves are actively working for the digitalization of the Financial Supervision Commission – reducing the administrative activity for the supervised persons, so that Bulgaria is a place where it is easy to do business”. He announced the launch of a mobile application of the FSC within days, for the convenience of users and supervised persons.
After the adoption of the new regulations, the Financial Supervision Commission will have the important task to create regulatory certainty and increased operational resilience of digital technologies in the financial sector by encouraging the development of innovation, but also by continuing to maintain a secure environment for optimal, but above all secure user experience.
The second panel was dedicated to “Looking ahead – banks and their clients” with the participation of Atanas Pekanov, Acting Deputy Prime Minister for the Management of European Funds, Tsvetanka Mincheva, Deputy Chair of the Board of Directors of ABB and Miroslav Vichev, CEO of Borika AD.
The conference was followed by a celebratory cocktail on the occasion of Banker’s Day.
The Financial Supervision Commission – with a commitment to stable results in a time of digitalization, green investments and regulatory changes
In the context of the post-Covid pandemic, global digitization, the European Green Deal, the hostilities in Ukraine and on the threshold of the euro area the Financial Supervision Commission continues to work for stability of the insurance market in Bulgaria, to introduce innovations in the regulation of the capital market, as well as ensure absolute strictness and complete transparency of the actions and processes of the pension insurance market. The development trend of the capital market is headed towards digitization and creation of conditions for more participants and reduced administrative burden. The positive relationship between innovation and financial technology has already reshaped standard consumer behavior and thinking, and this process has led to new opportunities for realizing optimized business models. At the same time, we, the participants in the financial sector, have the task of analyzing and forecasting potential risks. It is in this direction that the FSC focuses its activity on the balance between the promotion of innovation on the part of companies for investment purposes and the protection of consumers from the negative aspects that the new online space implies. In order to achieve results with the set development strategy, the Financial Supervision Commission has passed through specific steps such as the development of financial literacy of users of financial services and investors, improving the communication process by conducting regular meetings with FinTech companies to discuss minimal risks and maximum benefits from technologies, promoting the development of start-up companies by activating the capabilities of the Innovative Hub, as well as adapting the new regulatory framework for crowdfunding. Together with the participants in the non-banking financial sector, we create a sustainable and innovation-friendly business environment, with an emphasis on the need for a partnership between the national regulator and business. Dynamics in the development of technologies and digitization have a key role in changing consumer attitudes and growth expectations. The role of the FSC is to provoke the sync between the regulatory requirements and their implementation in a digital environment, with the ultimate goal being to reduce the administrative burden. Part of the specific results are the functioning Innovation Hub, providing a single point of contact with FinTech companies and the changed regulations for access to the capital markets of small and medium-sized enterprises. The FSC mobile application, building a unified information system for submitting and receiving information from supervised persons in an electronic standardized format is also in progress. An interesting moment in the current situation is that, within the framework of integrating innovations to reduce the administrative burden, the European Commission presented a Proposal for a Regulation of the European Parliament and the Council establishing a European single access point (ESAP). Its purpose is to provide the public with centralized access to all necessary information relevant to financial services. The European single access point will give investors easy, fast and comparable access to data on European companies, thereby also facilitating access to financing for European companies. ESAP is expected to contribute to the further integration of financial services and capital markets in the EU single market and to promote the development of smaller national capital markets and economies by providing greater visibility to them. The Financial Supervision Commission, in sync with the European Commission, introduces measures to implement the new regulations and creates conditions for the realization of the vision of a European single access point. Certainly one of the extremely meaningful and cause-oriented topics is that of the “Green Deal”. Ecology, social responsibility and transparent management are already part of the worldview and way of thinking of institutions and regulators in Europe. In accordance with the objectives of the European Union, the Financial Supervision Commission in Bulgaria supports through specific actions the targeting of national and European funding towards a sustainable economy, the planning of tools for business recovery after crises, as well as the balanced regional development of the country. I believe, and I see the specific results, that the Bulgarian regulator in the non-banking sector strategically arranges its actions in support of achieving the goals of the “Green Deal”. In this line of thinking, we all as a society are tasked with turning our attention to renewable energy, energy efficiency, green buildings, clean transportation, products created by the circular economy. After the adoption of the European Green Deal, the focus of the FSC will be on financial risks for institutions and the financial system, as well as on sustainability risk (ESG risks). When we talk about achieving sustainable goals, examples are always important. Green bonds are a suitable financial instrument for large-scale sustainability projects, by giving access to a robust financing tool for green projects compliant with the EU taxonomy. On the other hand, investors in such bonds will be able to more easily assess and compare the sustainability of their investments, which will reduce risks and strengthen their confidence in the market. The new EUGBS voluntary standard will be open to all EU and non-EU issuers, including corporations, financial institutions and issuers of covered bonds and asset-backed securities, as well as governments and other public bodies. In this regard, the challenges to the FSC to exercise its supervisory powers over capital market participants in compliance with the requirements laid down in the legislative package for Sustainable finance, namely the Disclosures Regulation, the Climate and Sustainable Finance Benchmarks Regulation and the Taxonomy Regulation. The FSC is also a major participant in the process of creating the National Plan for the Introduction of the Euro in Bulgaria. The FSC’s vision for this key process for the Bulgarian economy , includes the systematization of the necessary measures and actions in connection with the conversion of financial instruments. We intend to carry out the necessary monitoring of the expected stages for the adaptation of the clearing and settlement systems to work with the euro. In the context of the complicated international situation caused by the war in Ukraine and the sanctions and restrictions imposed by the EU, USA, Canada, the UK against the Russian Federation, the Russian Central Bank, credit institutions and companies, as well as individuals, the Commission took timely measures such as issued recommendations and guidelines to the investment, insurance and insurance sector for increased caution and the implementation of a strengthened risk management policy before proceeding with investments in financial instruments issued by issuers related to the Russian Federation. The challenges we face provoke us to be vigilant, focused on achieving the set goals of increasing consumer protection, as well as promoting investors, of a stable, regulated and transparent non-banking sector. Amid this global transformation, the FSC is starting a new strategic period for 2022 – 2024. The change for the regulator includes long-term planning, a strong expert team and determination to implement innovation in the field of digitization and regulations to stimulate the capital market. All this will be accompanied by constructive dialogue with all stakeholders in the processes regulated by the FSC. An important part of the development of the Bulgarian capital, insurance and social insurance market is the active and effective communication with businesses in the direction of developing concepts and sustainable strategies. Our goal is to be predictable in our actions and to show objectivity when making decisions on which the development of Bulgaria depends.
