What does the new Law on Measures Against Market Abuse With Financial Instruments provide for?

In order to ensure the implementation of Regulation (EU) 596/2014 and transposition of Directive 2015/2392 into national legislation, the National Assembly passed the Law on Measures Against Market Abuse With Financial Instruments, which came into force on 30.09.2016. It repeals the Act against Market Abuse with Financial Instruments.

• What does the act regulate?

The act regulates the measures against insider dealing, illegal disclosure of inside information and market manipulation of financial instruments. The aims of the act are to detect and prevent market abuse, to increase the public confidence in the financial instruments market, to ensure timely and full disclosure of information to investors, as well as to create conditions for the development of fair, transparent and efficient market in financial instruments.

• Which are the competent authorities?

The act provides that Тhe Financial Supervision Commission and Deputy-Chairman of the FSC, who chairs the “Investment Supervision” Department supervises the compliance with the Act, the Regulation (EU) № 596/2014 and the respective subdelegated legislation.

• Who will be able to report violations of the law?

Anyone may submit a notice of violation of this Act, the Regulation (EU) № 596/2014 and its subdelegated legislation in case of a violation, and if there is a reasonable doubt about committed or imminent infringing activities. The received notices of violation shall be entered in a special register kept by the officials of the “Investment Supervision” Department to the Financial Supervision Commission. The Act regulates special communication channels through which the notices for violations or infringement are to be made. A number of measures are being introduced to protect information associated with the submitted reports of violations and to protect the identity of persons who have submited notices of infringement, where access to the information is granted only to employees of the FSC. The information entered in the register shall be kept in a way that ensures confidentiality and security.

• What are the competencies of the Financial Supervision Commission and the deputy-chairman of the FSC?

In the Act are provided compulsory administrative measures and administrative penal provisions. The size of the prescribed penalties and fines may vary from BGN 500 to BGN 30 million depending on the type of violation, sequence, and other criteria. With а motivated decision the Deputy Chairman, respectively the FSC may impose compulsory administrative measures to prevent and stop administrative violations of the Act, the Regulation (EU) № 596/2014 and its subdelegated legislation, and to prevent and remove harmful consequences from such violations. The decisions which impose compulsory administrative measures are immediately enforceable, irrespective of whether or not they are being appealed.

Regulation (EU) № 596/2014 aims to create a united and stable legal framework which is to introduce the same rules to all EU citizens, as well as to help remove the distortions of competition by overcoming the differences in nationals legislations.