BULGARIA Law and Practice Contributed by: Nikolay Cvetanov, Boris Lazarov, Asen Apostolov and Patrizia Foffo, Penkov, Markov & Partners
1. Legal Framework 1.1 Key Laws and Regulations Principal Laws
Requirements Regulation (CRR), which gov - ern the capital and liquidity of banks in the EU. • Sub-regulations – Regulations of the Bulgar - ian National Bank – the BNB issues a num - ber of secondary legislative acts that further specify the legislation and set technical requirements and standards for the activities of banks. These include regulations on mini - mum reserves, risk management and capital buffers, the liquidity management and capital adequacy requirements of banks, etc. Regulatory Authorities The BNB is the main regulatory authority in the banking sector. It is responsible for licensing banks, supervising their activities and enforcing regulatory requirements. The BNB carries out macro-prudential and micro-prudential supervi - sion. The Financial Supervision Commission (FSC) also has a role in the area. Although it does not directly regulate banks, the FSC supervises insurance companies and capital markets, all related to the financial sector as a whole. As part of the EU, Bulgaria complies with the regulatory framework of the European Banking Authority (EBA), which sets common standards and guidelines for banks in the EU. In the context of the European Banking Union, Bulgaria participates in the Close Co-operation Mechanism with the European Central Bank (ECB), which includes direct supervision of cer - tain systemically important banks in Bulgaria.
The regulatory framework of the banking sector in Bulgaria is based on national laws and regula - tions that are aligned with European legislation. The main regulatory authority is the Bulgarian National Bank (BNB), which along with the Euro - pean authorities ensures the stability and safety of the entire banking sector. The main laws and regulations in the area are as follows. • Credit Institutions Act (CIA) – the main nation - al law that regulates the activities of the credit institutions in Bulgaria. It lays down licensing procedures, capital requirements, risk man - agement and liquidity requirements. • Bulgarian National Bank Act (BNBA) – defines the functions and powers of the BNB as the central regulatory authority. It regulates the functions of the BNB in the areas of monetary policy, regulation of the payment system and supervision of credit institutions. • Payment Services and Payment Systems Act (PSPSA) – concerns the provision of payment services and electronic money, as well as the registration and supervision of providers of such services. • Measures Against Money Laundering Act (MAMLA) – requires from banks and other financial institutions to implement measures to prevent money laundering and terrorist financing, including customer identification and transaction monitoring. • European regulations – Bulgaria, as a mem - ber of the European Union, is also subject to European banking regulations. Key pieces of legislation include the Capital Requirements Directive (CRD IV) as well as the Capital
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