Last update: 10 Ferbuary 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.
Marketing requirements for UCITS
Passporting regime
Directive 2009/65/EC of the European Parliament and the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (“the UCITS Directive”) provides and defines the legal framework for the notification procedure for UCITS intending to market their units in a Member State other than their home Member State.
The provisions of the UCITS Directive are incorporated in the Bulgarian Collective Investment Schemes and Other Undertakings for Collective Investments Act (CISOUCIA) – articles 128-135a.
According to Article 128, para 1 of CISOUCIA a collective investment scheme established in another Member State may market its units on the territory of the Republic of Bulgaria after the competent authority of such Member State notifies the Financial Supervision Commission (FSC).
The notification must include:
– A standardized notification letter according to Annex I of COMMISSION REGULATION (EU) No 584/2010 of 1 July 2010 implementing Directive 2009/65/EC of the European Parliament and of the Council as regards the form and content of the standard notification letter and UCITS attestation, the use of electronic communication between competent authorities for the purpose of notification, and procedures for on-the-spot verifications and investigations and the exchange of information between competent authorities;
– The documentation referred to in paragraphs (1) and (2) of Article 93 of the UCITS Directive (Art. 128, para 3 of CISOUCIA): the constituent instruments of the collective investment scheme, the prospectus, the last annual and half-yearly reports; the key Investor Information Document and/or the Key information Document under Regulation (EU) No 1286/2014 of the European Parliament and of The Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs);
– An attestation that the UCITS fulfils the conditions imposed by the UCITS Directive, from the competent authorities of the home Member State.
The notification documentation should be provided in English or in Bulgarian and should include all the necessary information that has to be provided to investors in the EU Member State in which it is situated. The Key investor information document (KIID) and/or the Key information Document (PRIIPs KID) under Regulation (EU) No 1286/2014 of the European Parliament and of The Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs), should be submitted to the investors in Bulgarian language.
A UCITS established in another Member State which intends to market its units on the territory of the Republic of Bulgaria, must make arrangements in Bulgaria to perform the following tasks (without being required to have a physical presence in Bulgaria or to appoint a third party) (Art. 130, para 1 of CISOUCIA):
- a) Process subscription, repurchase and redemption orders and make other payments to unit-holders relating to the units of the UCITS, in accordance with the conditions set out in the documents required pursuant to Chapter IX of UCITS Directive (Chapter Seven of CISOUCIA);
(b) Provide investors with information on how orders referred to in point (a) can be made and how repurchase and redemption proceeds are paid;
(c) Facilitate the handling of information and access to procedures and arrangements referred to in Article 15 of the UCITS Directive (Art. 122 of CISOUCIA) relating to the investors’ exercise of their rights arising from their investment in the UCITS;
(d) Make the information and documents required pursuant to Chapter IX of the UCITS Directive (Chapter Seven of CISOUCIA) available to investors under the conditions laid down in Article 94 of the that directive, for the purposes of inspection and obtaining copies thereof;
(e) Provide investors with information relevant to the tasks that the facilities perform in a durable medium; and
(f) Act as a contact point for communicating with the competent authorities.
The UCITS shall ensure that arrangements for the performance of the above tasks can be provided, including electronically, in Bulgarian. The implementation of the tasks may be entrusted to a third party if the following conditions are met:
- the third party is subject to supervision in respect of the implementation of the tasks, entrusted to it by the collective investment scheme;
- a written contract has been concluded between the collective investment scheme and the third party, setting out which tasks shall not be implemented directly by the collective investment scheme and the obligation of the collective investment scheme to provide all the necessary information and documents to the third party for implementation of the tasks.
After the competent authority of the UCITS home Member State has forwarded to the FSC all the required documentation, accompanied by an attestation verifying the UCITS compliance with the requirements of Directive 2009/65/EC, the UCITS has the right to market its units on the territory of the Republic of Bulgaria, without being obliged to pay any fee to FSC.
A message about completed notification procedure is to be sent to the respective UCITS by the competent authorities of its home Member State.
The UCITS shall take the necessary measures in order to ensure that the information which it is obliged to provide, is made available to unit-holders in Bulgaria.
Further changes to the information contained in the notification letter provided in accordance with Article 93, first paragraph, of Directive 2009/65/EC, or the share classes to be marketed, should be notified to the competent authorities of the UCITS home Member State and the FSC at least one month before implementing the change.
De-notification of arrangements made for marketing of UCITS
A UCITS established in another Member State which markets its units on the territory of the Republic of Bulgaria, may withdraw the notification of their marketing, including, where applicable, and withdraw the notification of the marketing of the relevant classes of units already notified, if the following conditions are met:
- a) 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 publicly available for at least 30 working days and shall be addressed, insofar as their identity is known, directly or through financial intermediaries, individually to all investors in Bulgaria;
- b) The intention to terminate arrangements for marketing those units in Bulgaria is made public through publicly available means, which are customary for the marketing of UCITS and suitable for a typical UCITS investor, including by electronic means;
- c) Any contractual arrangements with financial intermediaries or delegates shall be amended or terminated with effect from the date of withdrawal of the notification, in order to prevent any new or additional, direct or indirect marketing or placement of the units referred to in the withdrawal notification.
The information referred to in point a) and b) shall be presented in Bulgarian and shall clearly describe the consequences for investors if they do not accept the offer for redemption of their shares.
From the date of the withdrawal of the notification, as communicated to the FSC by the competent authority of the home country, the UCITS shall cease any new or additional, direct or indirect activity of marketing or placing its units which have been subject to withdrawal in Bulgaria.
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.
For domestic UCITS according to Art. 81 of Ordinance 442 marketing communications associated with the activity of collective investment schemes, as well as public statements of members of the Board of directors of the management companies must be approved in advance by the head of internal control and compliance in the management companies of UCITS. This article also sets out requirements to the marketing of UCITS via phone calls, which should be done in accordance with ESMA Guidelines on marketing communications under the Regulation on cross-border distribution of funds. Article 82 of that ordinance states that the marketing communications and information materials of the UCITS subject to a performance fee, should clearly indicate all the information necessary for investors to properly understand the performance fee model and methodology for its calculation, which includes a description of the method for calculating the fees for results achieved, specifying the specific parameters and the date on which the fee is paid.
Marketing communications are not verified by the FSC. EU UCITS marketing their units in Bulgaria are not required to provide marketing communications addressed to investors in Bulgaria to the FSC. However, such verification could be made by the FSC on a discretionary basis.
Reporting obligations in relation to marketing
No additional requirements have been set.
According to Article 80, para 1 of Ordinance 44 a UCITS from another Member State that publicly offers its shares in the Republic of Bulgaria shall publish and provide the FSC with all information that it provides to the supervisory authority and discloses to the public in the sending state, as well as any update of this information.
Other rules governing the marketing of UCITS 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 EU UCITS, nor annual supervision fees for marketing of EU UCITS in Bulgaria.
Language
According to Art. 131, para 2 of CISOUCIA the KIID, respectively the PRIIPs KID has to be translated into Bulgarian in any case and any other information may be presented in Bulgarian or in English by the choice of the UCITS, respectively the management company. Additionally, Art. 80 of Ordinance No 44 requires that all the information the UCITS publicly discloses to the investors in Bulgaria has to be translated into Bulgarian at the request of an investor.
CISOUCIA is available in English on the 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 UCITS, there may be other legal provisions that may apply when marketing them in Bulgaria, although they are not specifically designed for the marketing of UCITS, depending on the individual situation of those involved in the marketing of shares or units of UCITS. 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 UCITS 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 a UCITS. Where uncertainty exists, those marketing or investing in UCITS should obtain independent advice as to the applicable requirements to their individual situation.
Contacts:
Inquiries in relation to marketing of EU UCITS in Bulgaria: delovodstvo@fsc.bg, bg_fsc@fsc.bg
Designated email for UCITS notifications: UCITS-notification@fsc.bg
Correspondence in relation to change and update of information regarding arrangements made for EU UCITS marketing shares/units in Bulgaria: EU_UCITS_reporting@fsc.bg
Summary of the marketing requirements for UCITS
1) 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:
– Art. 65 of CISOUCIA (transposing Art. 77of UCITS Directive), the requirements of Art. 4, para 1 of Regulation (EU) 2019/1156 and the requirements of the ESMA Guidelines on marketing communications under the Regulation on cross-border distribution of funds)
– Art. 81 and 82 of Ordinance 44.
2) Marketing communications are not verified by the Bulgarian Financial Supervision Commission (FSC). Marketing communications are subject to ongoing supervision (on-site inspections) conducted by the FSC. EU UCITS marketing their units in Bulgaria are not required to provide marketing communications addressed to investors in Bulgaria to the FSC. However, such verification could be made by the FSC on a discretionary basis. For domestic UCITS according to Art. 81 of Ordinance 442 marketing communications associated with the activity of collective investment schemes, as well as public statements of members of the Board of directors of the management companies must be approved in advance by the head of internal control and compliance in the management companies of UCITS.
3) Reporting obligations in relation to marketing – Relevant articles by national legal framework regarding reporting obligations in relation to marketing of UCITS are the following:
Domestic UCITS:
– Art. 53-64 of CISOUCIA ;
– Art. 71-82 of Ordinance 44.
EU UCITS – no additional requirements exceed UCITS Directive
According to Article 80, para 1 of Ordinance 44 a UCITS from another Member State that publicly offers its shares in the Republic of Bulgaria shall publish and provide the FSC with all the information that it provides to the supervisory authority and discloses to the public in the sending state, as well as any update of this information.
4) Passporting rules – art. 128-135a of CISOUCIA (transposing Art. 91-95 of UCITS Directive)
Information about the notification procedure is available in Bulgarian on this link: https://www.fsc.bg/?page_id=28210&lang=en
5) De-notification of arrangements made for marketing – Art. 135a of CISOUCIA, transposing Art. 93a of UCITS Directive. There are no additional rules set.
6) Any other rules governing marketing of UCITS:
Language requirements – according to Art. 131, para 2 of CISOUCIA the KIID has to be translated into Bulgarian in any case and any other information may be presented in Bulgarian or in English by the choice of the UCITS, respectively the management company.
PRIIPs KID has to be translated in Bulgarian.
Additionally, Ordinance No 44 requires that all the information that the UCITS makes public to the investors in Bulgaria should be translated into Bulgarian at the request of an investor.
Fees – no initial or subsequent registration fees for passporting of EU UCITS, nor annual supervision fees for marketing of EU UCITS in Bulgaria.
[1] 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
2 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