Financial Supervision Commission (FSC) / Komisiya za Finansov Nadzor (KFN)

Overview

The Financial Supervision Commission (FSC), known in Bulgarian as Komisiya za Finansov Nadzor (KFN / Комисия за финансов надзор), is the independent regulatory authority responsible for the supervision and regulation of Bulgaria's non-banking financial sector. Established on 1 March 2003 under the Financial Supervision Commission Act, the FSC consolidated previously fragmented supervisory functions for capital markets, insurance, and pension funds into a single integrated regulator.

The FSC is institutionally independent from the executive branch and reports directly to the National Assembly (Parliament) of the Republic of Bulgaria. Its primary mission is to maintain stability and transparency in the non-banking financial sector and to ensure the protection of consumers of financial services and products. The Commission exercises binding regulatory authority over securities markets, investment firms, insurance companies, health insurance providers, supplementary pension insurance funds, and related financial intermediaries operating in Bulgaria.

With Bulgaria's accession to the European Union on 1 January 2007 and subsequent euro adoption on 1 January 2026, the FSC has become increasingly integrated into the European regulatory architecture, coordinating with the European Securities and Markets Authority (ESMA), the European Insurance and Occupational Pensions Authority (EIOPA), and other EU-level bodies. Bulgaria has also become a relevant jurisdiction for fintech and investment firm licensing within the EU single market.

Current Chairman: Vasil Golemanski (elected by the National Assembly for a six-year term)

Headquarter Location: 16 Budapeshta Street, 1000 Sofia, Bulgaria

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

Capital Markets and Securities Regulation

The FSC is the competent authority for securities markets regulation in Bulgaria, responsible for maintaining fair, transparent, and efficient capital markets. Key functions include:

• Investment Firm Authorization and Supervision — Licensing and ongoing supervision of investment intermediaries (brokers, dealers, advisors), ensuring compliance with MiFID II requirements as transposed into Bulgarian law

• Public Offerings and Prospectuses — Review and approval of prospectuses for public offerings of securities and admission to trading on regulated markets

• Market Abuse Prevention — Investigation and enforcement against insider trading, market manipulation, and unlawful disclosure of inside information under the EU Market Abuse Regulation (MAR)

• Regulated Market and MTF Oversight — Supervision of the Bulgarian Stock Exchange (BSE) and any multilateral trading facilities operating in Bulgaria

• Post-Trade Infrastructure — Oversight of central securities depositories, clearing, and settlement systems including the Central Depository AD

• Corporate Governance and Financial Reporting — Monitoring of listed company disclosure obligations, periodic financial reporting, and corporate governance standards

The Bulgarian Stock Exchange (Bulgarska Fondova Borsa, BSE) is the primary regulated market in Bulgaria, and the FSC oversees its operations, listing rules, and trading conduct.

Collective Investment Schemes and Asset Management

The FSC authorizes and supervises collective investment scheme operators and asset managers in Bulgaria:

• UCITS Management Companies — Authorization and supervision of UCITS management companies and UCITS fund prospectuses

• Alternative Investment Fund Managers (AIFM) — Authorization and registration of AIFM under the AIFMD framework as transposed into Bulgarian law

• Fund Governance — Oversight of fund management company governance, valuation procedures, liquidity management, and risk controls

• Cross-Border Fund Distribution — Supervision of fund passporting into and from Bulgaria under EU fund distribution frameworks

Insurance Market Supervision

The FSC is the competent authority for insurance and reinsurance supervision in Bulgaria:

• Insurance Company Licensing — Authorization of insurance and reinsurance undertakings

• Solvency II Compliance — Prudential supervision under the Solvency II Directive, including capital adequacy, technical provisions, and governance requirements

• Insurance Distribution — Oversight of insurance intermediaries and brokers under the Insurance Distribution Directive (IDD)

• Consumer Protection — Monitoring of policy terms, claims handling, and insurance product governance

• Health Insurance — Specific supervisory competence over voluntary health insurance providers in Bulgaria

Pension Fund Supervision

The FSC regulates supplementary pension insurance in Bulgaria:

• Pension Insurance Companies — Licensing and supervision of pension insurance companies managing supplementary pension funds

• Universal Pension Funds — Oversight of mandatory universal supplementary pension funds (second pillar)

• Voluntary Pension Funds — Supervision of voluntary supplementary pension funds (third pillar)

• Occupational Pension Funds — Oversight of employer-sponsored occupational pension schemes

• Investment Policy and Asset Management — Monitoring of pension fund investment policies, asset allocation, and risk management

• Member Protection — Ensuring pension fund solvency, adequate reserves, and fair treatment of pension fund members

AML/CFT Compliance Supervision

The FSC exercises AML/CFT supervisory authority over entities within its regulatory perimeter:

• Customer Due Diligence — Verification of KYC, CDD, and EDD requirements for investment firms, insurance companies, and pension funds

• Suspicious Activity Reporting — Coordination with the Financial Intelligence Directorate (FID) at the State Agency for National Security (SANS)

• Sanctions Compliance — Monitoring of compliance with EU, UN, and national sanctions lists

• Beneficial Ownership — Verification of beneficial ownership identification and transparency requirements

MiCA and Digital Finance

Following the entry into force of the EU Markets in Crypto-Assets Regulation (MiCA), the FSC has taken on supervisory responsibilities for certain crypto-asset activities:

• Crypto-Asset Service Providers (CASPs) — Authorization and supervision of CASPs operating in Bulgaria under MiCA

• Asset-Referenced Tokens — Oversight of issuers of asset-referenced tokens

• Digital Finance Innovation — Participation in EU digital finance regulatory initiatives

Recent Developments (2025-2026)

New Board Composition (2025): The National Assembly elected new board members in May 2025, including Ms. Velichkova (former Secretary General), Mr. Plamen Danailov, and Ms. Diana Yordanova, refreshing the Commission's governance.

Euro Adoption Impact (January 2026): Bulgaria's adoption of the euro on 1 January 2026 has implications for FSC-supervised entities, particularly regarding currency denomination of investments, insurance policies, and pension fund assets.

MiCA Implementation: The FSC has assumed competent authority status for crypto-asset service provider authorization under MiCA, expanding its supervisory perimeter.

Regulatory Powers

The FSC possesses comprehensive administrative enforcement authority over supervised entities:

• Administrative Fines and Property Sanctions — Imposition of fines and property sanctions upon establishment of offences by supervised entities

• Coercive Administrative Measures — Issuance of recommendations to undertake specific corrective actions

• License Suspension or Revocation — Withdrawal of authorization for serious or persistent violations

• Prohibition Orders — Prohibitions on individuals from holding management positions in regulated entities

• Mandatory Compliance Directions — Binding directives requiring regulatory compliance within specified timelines

• Public Disclosure — Publication of enforcement actions and sanctions decisions

• Supervisory Warnings — Issuance of formal warnings to supervised entities

The FSC publishes annual activity reports to the National Assembly, including aggregate enforcement statistics and supervisory findings. Recent enforcement priorities include investment firm conduct compliance, insurance solvency adequacy, pension fund investment policy adherence, and AML/CFT compliance.

Criminal Referral

For serious violations involving potential criminal conduct, the FSC coordinates with the Bulgarian prosecution authorities and law enforcement agencies for criminal investigation and prosecution.

Regulatory Role and Function

Executive Leadership

Chairman: Vasil Golemanski (elected by the National Assembly for a six-year term)

Commission Board Members:

The FSC Board consists of the Chairman, a Deputy Chairman, and members elected by the National Assembly. As of 2025, board members include:

• Ms. Velichkova (former Secretary General; elected May 2025)

• Mr. Plamen Danailov (elected 15 May 2025)

• Ms. Diana Yordanova (elected May 2025)

Organizational Structure:

The FSC is organized into three principal supervisory divisions corresponding to its regulatory domains:

• Investment Activity Supervision Division — Capital markets, investment firms, and securities regulation

• Insurance Supervision Division — Insurance and reinsurance company oversight

• Social Insurance Supervision Division — Pension fund and supplementary pension insurance oversight

Additional Functional Units:

• Legal Department

• International Cooperation Department

• Administrative and IT Department

• AML/CFT Compliance Unit

• Consumer Protection Unit

Legal Foundation

The FSC operates under the following primary legislative framework:

Financial Supervision Commission Act (2003, amended)

• Establishes the legal status, functions, organizational structure, and powers of the FSC

• Defines the composition and appointment procedures for the Commission Board

• Grants the FSC independence from the executive branch with accountability to the National Assembly

• Sets out the enforcement powers, administrative sanctions, and supervisory procedures

Markets in Financial Instruments Act (MFIA)

• Transposition of MiFID II into Bulgarian law

• Establishes the regulatory framework for investment firms, regulated markets, and market infrastructure

• Grants the FSC licensing and supervisory authority over investment intermediaries and trading venues

Public Offering of Securities Act (POSA)

• Regulates public offerings, prospectus requirements, and ongoing disclosure obligations for listed companies

• Grants the FSC authority over securities issuance, takeover bids, and corporate governance standards

Insurance Code

• Comprehensive legislation governing insurance and reinsurance activities in Bulgaria

• Transposes Solvency II Directive requirements

• Grants the FSC licensing and prudential supervisory authority over insurance undertakings

Social Insurance Code (Supplementary Pension Insurance Provisions)

• Establishes the legal framework for supplementary pension insurance (second and third pillar)

• Grants the FSC licensing and supervisory authority over pension insurance companies and pension funds

Measures Against Market Abuse in Financial Instruments Act

• Transposition of the EU Market Abuse Regulation (MAR) enforcement provisions

• Grants the FSC investigation and enforcement powers for insider trading and market manipulation

Law on Measures Against Money Laundering (MAMLA)

• Transposing EU AML Directives

• Establishes AML/CFT compliance requirements for FSC-supervised entities

EU Regulatory Frameworks:

• Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR)

• Solvency II Directive

• Insurance Distribution Directive (IDD)

• Alternative Investment Fund Managers Directive (AIFMD)

• UCITS Directive

• Market Abuse Regulation (MAR)

• Markets in Crypto-Assets Regulation (MiCA)

• Sustainable Finance Disclosure Regulation (SFDR)

Licensing and Authorization Relevance

The Financial Supervision Commission (FSC) licenses and authorizes non-banking financial market participants in Bulgaria:

The licensing process involves assessment of capital adequacy, fitness and propriety of management, business plan viability, organizational structure, AML/CFT compliance frameworks, and IT systems readiness.

Payments and Money Movement Relevance

The Financial Supervision Commission (FSC) does not directly regulate payment systems or payment service providers. Payment institution licensing and supervision in Bulgaria falls under the jurisdiction of the Bulgarian National Bank (BNB). However, the FSC's regulatory activities intersect with payments and money movement in several areas:

Payment Systems Governed or Overseen

The FSC does not directly operate or oversee payment systems. Payment system oversight is the responsibility of the Bulgarian National Bank (BNB). However, the FSC oversees post-trade infrastructure relevant to securities markets:

[Payment systems operated by BNB are documented in A228-BG-NAT-bulgarian-national-bank.md]

Relationship to Other Regulators

Bulgarian National Bank (BNB) — A228

The FSC and the Bulgarian National Bank (BNB) form Bulgaria's dual regulatory structure for the financial sector:

• BNB Jurisdiction: Banking supervision, payment institution licensing, electronic money institution licensing, monetary policy (now within Eurosystem), payment systems operation and oversight, AML/CFT supervision for banks and payment service providers

• FSC Jurisdiction: Capital markets, investment firms, insurance, pension funds, and non-banking financial services

• Coordination: The two regulators coordinate on financial stability matters, cross-sectoral risk assessment, and AML/CFT enforcement through formal cooperation agreements

• Complementary Roles: An entity seeking to operate across both banking and capital markets in Bulgaria must obtain authorizations from both the BNB (for banking/payment activities) and the FSC (for investment/securities activities)

European Securities and Markets Authority (ESMA)

• Policy coordination, supervisory convergence, and regulatory harmonization

• Participation in supervisory colleges for cross-border investment firms

• Market surveillance data sharing and enforcement cooperation

• MiCA and MiFID II implementation coordination

European Insurance and Occupational Pensions Authority (EIOPA)

• Solvency II supervisory coordination

• Insurance Distribution Directive implementation

• Pension fund supervision standards alignment

• Cross-border insurance supervision cooperation

European Systemic Risk Board (ESRB)

• Macroprudential risk assessment coordination

• Systemic risk monitoring in non-banking financial sector

• Financial stability data reporting

International Organization of Securities Commissions (IOSCO)

• Securities regulation harmonization

• Cross-border enforcement cooperation

• Market integrity and investor protection standards

Financial Intelligence Directorate (FID) at SANS

• AML/CFT coordination for non-banking financial sector

• Suspicious activity report processing and intelligence sharing

• Sanctions enforcement coordination

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Financial Supervision Commission Headquarters

• Address: 16 Budapeshta Street, 1000 Sofia, Bulgaria

• Telephone: +359 2 9404 999

• Call Center: 0800 40 444 (domestic toll-free)

• Fax: +359 2 9404 606

• Email: [email protected]

• Website: https://www.fsc.bg/en/

• Working Hours: 9:00 - 17:30 (Monday to Friday)

Chairman's Office

• Contact: Office of Chairman Vasil Golemanski

• Telephone: +359 2 9404 999 (Central Switchboard)

Investment Activity Supervision Division

• Focus: Capital markets, investment firms, securities regulation

• Contact: Available through official website

Insurance Supervision Division

• Focus: Insurance and reinsurance company oversight

• Contact: Available through official website

Social Insurance Supervision Division

• Focus: Pension fund supervision

• Contact: Available through official website

Notes on Naming and Language