Chapter 3 – Section V

Section V

Permission for Transformation

Article 23. (1) A permission for transformation of a bank through takeover or merger

can be granted only if corporations participating in transformation are banks.

(2) A permission for transformation of a bank, licensed by the Bulgarian National

Bank, is not granted by means of legal form change or through assignment of the

entire property to the sole proprietor.

(3) A permission for transformation through merger of banks is granted only if the

new established company has already obtained a bank license.

(4) In case of bank takeover, the right to conduct activities for which the acquiring

bank has not been licensed, does not pass over the acquiring bank.

(5) For granting a permission for splitting or spinning off through acquisition, acquiring

companies shall possess the respective license, if as a consequence of the succession,

they acquire the rights and the obligations raised in conducting their activities,

for which the license is requested.

(6) For granting a permission for splitting or spinning off through establishment or

in case of spinning off the sole commercial company, the new established companies

shall have received the license, if as a consequence of the succession, they acquire the

rights and the obligations raised in conducting their activities for which the license is

requested.

(7) In the cases under paragraphs 3, 5 and 6, the application for granting a license,

for which the Bulgarian National Bank is competent, shall be considered simultaneously

with this permission.

(8) Where as a consequence of the transformation there are circumstances, which

demand granting other permission under this Ordinance, the application for granting

this permission shall be considered simultaneously with the permission for transformation.

(9) In the cases under paragraph 5, prior to come up with a decision, the Bulgarian

National Bank shall take into consideration the statement of opinion of the Financial

Supervision Commission regarding the company participating in the transformation

and supervised by the Commission.

Article 24. (1) To obtain a permission for transformation, the bank shall submit:

1. a statement of motivated reasons substantiating the need of transformation and

the respective form of transformation;

2. a certified transcript of the decision by the competent bodies of the banks participating

in the transformation;

3. a certified transcript of the contract or the plan for transformation;

4. detailed information on rights and obligations passing over acquiring and/or new

established companies;

16 Ordinance No. 2

5. forecasted reports of the banks participating in the transformation, including

balance sheet, income statement, capital adequacy, liquidity, large exposures, holdings

and investments reports under Article 47, paragraphs 1 and 2 of the Law on

Credit Institutions, where the effect of transformation has been reflected;

6. reports by the managing bodies of the transformed and acquiring companies;

7. reports by the examiners (specialized auditing companies under Article 76 of the

Law on Credit Institutions) under Article 262m of the Commercial Code which consist

of conclusion related to the following:

а) authenticity of the presentation of financial and property position of the banks

participating in the transformation and their financial result;

b) the reliability of internal control systems of the acquiring bank;

c) the compliance of the forecasted supervisory reports, completed by the banks,

participating in the transformation, with the requirements of the Law on Credit Institutions

and the bylaws of its enactment;

8. an opinion by the examiner under Article 76 of the Law on Credit Institutions

whether there are circumstances under Article 77, paragraph 1 of the Law on Credit

Institutions during the audit;

9. a certified transcript of the licenses granted by other bodies outside the Bulgarian

National Bank, if there is such requirement under Article 23;

10. in the cases of takeover, splitting or spinning off through acquisition, a business

plan of the acquiring bank;

11. a draft announcement to the creditors of the banks, participating in the transformation,

which will be published in two central daily newspapers after granting of the

permission;

12. any other documents necessary for conducting the assessment whether the permission

shall be granted.

(2) The Bulgarian National Bank shall grant the permission for transformation where

it has established that:

1. the interests of the depositors and other creditors of the bank, participating in the

transformation, should not be threatened or impaired;

2. the passing assets and liabilities should not bring to the violation of the Law on

Credit Institutions or the bylaws on its enactment by the bank, participating in the

transformation;

3. the respective licenses and permissions have already been granted or will be

granted simultaneously with the permission, provided such licenses and permissions

are required under Article 23;

4. the positive statement of opinion by the Financial Supervision Commission has

been received, provided such statement is required under Article 23.

(3) Besides non-compliance with the requirements under paragraph 1, the Bulgarian

National Bank shall refuse to grant the requested permission:

Ordinance No. 2 17

1. for takeover, splitting through acquisition or spinning off through acquisition:

а) if there is a risk for deterioration of the financial position of the bank participating

in the transformation;

b) if in Bulgarian National Bank’s judgment, a bank participating in the transformation

may not continue to reliably and steadily exercise its bank activities after the

transformation;

c) if in Bulgarian National Bank’s judgment, a bank participating in the transformation

can not be able to continue performance of all its current and/or acquired after

the transformation obligations without delay;

2. if the applicant has not submitted all necessary information and documents in a

due term or if submitted documents contain incomplete, inconsistent, improper or

untrustworthy information.

Section V

Permission for Transformation

Article 23. (1) A permission for transformation of a bank through takeover or merger can be granted only if corporations participating in transformation are banks.

(2) A permission for transformation of a bank, licensed by the Bulgarian National Bank, is not granted by means of legal form change or through assignment of the entire property to the sole proprietor.

(3) A permission for transformation through merger of banks is granted only if the new established company has already obtained a bank license.

(4) In case of bank takeover, the right to conduct activities for which the acquiring bank has not been licensed, does not pass over the acquiring bank.

(5) For granting a permission for splitting or spinning off through acquisition, acquiring companies shall possess the respective license, if as a consequence of the succession, they acquire the rights and the obligations raised in conducting their activities, for which the license is requested.

(6) For granting a permission for splitting or spinning off through establishment or in case of spinning off the sole commercial company, the new established companies shall have received the license, if as a consequence of the succession, they acquire the rights and the obligations raised in conducting their activities for which the license is requested.

(7) In the cases under paragraphs 3, 5 and 6, the application for granting a license, for which the Bulgarian National Bank is competent, shall be considered simultaneously with this permission.

(8) Where as a consequence of the transformation there are circumstances, which demand granting other permission under this Ordinance, the application for granting this permission shall be considered simultaneously with the permission for transformation.

(9) In the cases under paragraph 5, prior to come up with a decision, the Bulgarian National Bank shall take into consideration the statement of opinion of the Financial Supervision Commission regarding the company participating in the transformation and supervised by the Commission.

Article 24. (1) To obtain a permission for transformation, the bank shall submit:

1. a statement of motivated reasons substantiating the need of transformation and the respective form of transformation;

2. a certified transcript of the decision by the competent bodies of the banks participating in the transformation;

3. a certified transcript of the contract or the plan for transformation;

4. detailed information on rights and obligations passing over acquiring and/or new established companies;

16 Ordinance No. 2

5. forecasted reports of the banks participating in the transformation, including balance sheet, income statement, capital adequacy, liquidity, large exposures, holdings and investments reports under Article 47, paragraphs 1 and 2 of the Law on Credit Institutions, where the effect of transformation has been reflected;

6. reports by the managing bodies of the transformed and acquiring companies;

7. reports by the examiners (specialized auditing companies under Article 76 of the Law on Credit Institutions) under Article 262m of the Commercial Code which consist of conclusion related to the following:

а) authenticity of the presentation of financial and property position of the banks participating in the transformation and their financial result;

b) the reliability of internal control systems of the acquiring bank;

c) the compliance of the forecasted supervisory reports, completed by the banks, participating in the transformation, with the requirements of the Law on Credit Institutions and the bylaws of its enactment;

8. an opinion by the examiner under Article 76 of the Law on Credit Institutions whether there are circumstances under Article 77, paragraph 1 of the Law on Credit Institutions during the audit;

9. a certified transcript of the licenses granted by other bodies outside the Bulgarian National Bank, if there is such requirement under Article 23;

10. in the cases of takeover, splitting or spinning off through acquisition, a business plan of the acquiring bank;

11. a draft announcement to the creditors of the banks, participating in the transformation, which will be published in two central daily newspapers after granting of the permission;

12. any other documents necessary for conducting the assessment whether the permission shall be granted.

(2) The Bulgarian National Bank shall grant the permission for transformation where it has established that:

1. the interests of the depositors and other creditors of the bank, participating in the transformation, should not be threatened or impaired;

2. the passing assets and liabilities should not bring to the violation of the Law on Credit Institutions or the bylaws on its enactment by the bank, participating in the transformation;

3. the respective licenses and permissions have already been granted or will be granted simultaneously with the permission, provided such licenses and permissions are required under Article 23;

4. the positive statement of opinion by the Financial Supervision Commission has been received, provided such statement is required under Article 23.

(3) Besides non-compliance with the requirements under paragraph 1, the Bulgarian National Bank shall refuse to grant the requested permission:

Ordinance No. 2 17

1. for takeover, splitting through acquisition or spinning off through acquisition:

а) if there is a risk for deterioration of the financial position of the bank participating in the transformation;

b) if in Bulgarian National Bank’s judgment, a bank participating in the transformation may not continue to reliably and steadily exercise its bank activities after the transformation;

c) if in Bulgarian National Bank’s judgment, a bank participating in the transformation can not be able to continue performance of all its current and/or acquired after the transformation obligations without delay;

2. if the applicant has not submitted all necessary information and documents in a due term or if submitted documents contain incomplete, inconsistent, improper or untrustworthy information.

Chapter 3 – Section IV

Section IV

Permission for a Change in the Name Specified in the License

Article 22. (1) A bank wishing to obtain a permission to change its name as specified

in the license shall file a written application with the Bulgarian National Bank,

attaching the following documents thereto:

1. a certified transcript of the decision of the bank’s competent body;

2. a statement of motivated reasons for changing the present name of the bank.

(2) A foreign bank wishing to change the name specified in its license for conducting

bank activity through a branch on the territory of the Republic of Bulgaria shall

file a written application with the Bulgarian National Bank, attaching the documents

certifying the change in the bank’s name in its home country.

(3) Where necessary, the Bulgarian National Bank shall request a statement of opinion

of the Competition Protection Commission.

(4) The Bulgarian National Bank shall refuse to grant a permission for changing the

name specified in the license, if the requirement stipulated in Article 6, paragraph 3 of

the Law on Credit Institutions is not met.

Section IV

Permission for a Change in the Name Specified in the License Article 22. (1) A bank wishing to obtain a permission to change its name as specified in the license shall file a written application with the Bulgarian National Bank, attaching the following documents thereto:

1. a certified transcript of the decision of the bank’s competent body;

2. a statement of motivated reasons for changing the present name of the bank.

(2) A foreign bank wishing to change the name specified in its license for conducting bank activity through a branch on the territory of the Republic of Bulgaria shall file a written application with the Bulgarian National Bank, attaching the documents certifying the change in the bank’s name in its home country.

(3) Where necessary, the Bulgarian National Bank shall request a statement of opinion of the Competition Protection Commission.

(4) The Bulgarian National Bank shall refuse to grant a permission for changing the name specified in the license, if the requirement stipulated in Article 6, paragraph 3 of the Law on Credit Institutions is not met.

Chapter 3 – Section III

Section III

Permission for Opening an Overseas Branch of a Domestic Bank

Article 20. (1) A domestic bank wishing to obtain a permission to establish a branch

abroad shall file a written application with the Bulgarian National Bank which shall

contain the following information:

1. the name of the country where the bank intends to open a branch, and the registered

office thereof;

Ordinance No. 2 13

2. the names of at least two persons appointed to manage the branch and represent

the bank abroad.

(2) The following documents shall be submitted with the application under paragraph

1:

1. a certified transcript of the decision of the bank’s competent management body

for the establishment of the overseas branch in the respective country;

2. a certified transcript of the decision of the bank’s competent management body

for the appointment of the persons who will manage the branch and represent the bank

abroad;

3. a business plan, which shall, in addition to the information under Article 13,

paragraph 2, items 3, 4 and 5 of the Law on Credit Institutions, contain economic

substantiation of the need to open a branch of the bank in the respective country.

(3) Any person appointed to manage the branch of the bank abroad shall submit:

1. a certificate proving no previous conviction for a premeditated crime of a public

character, or in case of non-residents, another document to the same effect;

2. information on:

а) full name, URN, date and place of birth, permanent address;

b) education, including the names of educational institutions where it was acquired,

and length of study;

c) attended qualification training courses and seminars stating place and years of

training;

d) command of foreign languages (both written and spoken) stating the proficiency

level;

e) professional experience with details on the occupied positions by year;

f) current employment and a detailed job description of the present position;

g) a certified transcript of a diploma, or any other similar document of completed

higher education;

3. a statement certifying the following circumstances:

a) that the person is not and has not been deprived of the right to hold a position of

material liability;

b) that the person has not been a member of a managing or controlling body, or a

general partner in a company which has been wound up due to bankruptcy, if creditors

have not been paid;

c) that the person is not a spouse or a relative, in direct or lateral lineage up to the

third degree, of another person who manages and represents the branch, or of a member

of an internal control office of the branch;

d) that the person has not been a member of a managing or controlling body of a

bank in the last five years prior to the date of the ruling on declaring the bank bankrupt;

14 Ordinance No. 2

e) the amount of taxes paid for the last three years, containing information whether

the person has been penalized for tax evasion, and whether the person has any outstanding

taxes.

(4) The Bulgarian National Bank shall refuse to grant a permission where:

1. there is a risk that the financial position of the bank may deteriorate as a result of

opening a branch abroad;

2. the business plan submitted includes bank transactions or activities beyond the

scope of the license granted to the bank;

3. the proposed organizational structure of the branch does not ensure its reliable

and stable management;

4. the bank supervision exercised in the host country is not sufficiently effective;

5. an agreement of supervisory cooperation between the Bulgarian National Bank

and the respective host supervisory authority of the branch has not been concluded

and there are some legal or administrative impediments to the bank supervision exercised

over the branch by the Bulgarian National Bank.

Article 21. Having received the permission by the competent supervisory authority

in the host country, the bank shall send within ten days a copy of the permission to the

Bulgarian National Bank.

Section III

Permission for Opening an Overseas Branch of a Domestic Bank

Article 20. (1) A domestic bank wishing to obtain a permission to establish a branch abroad shall file a written application with the Bulgarian National Bank which shall contain the following information:

1. the name of the country where the bank intends to open a branch, and the registered office thereof;

Ordinance No. 2 13

2. the names of at least two persons appointed to manage the branch and represent the bank abroad.

(2) The following documents shall be submitted with the application under paragraph

1:

1. a certified transcript of the decision of the bank’s competent management body for the establishment of the overseas branch in the respective country;

2. a certified transcript of the decision of the bank’s competent management body for the appointment of the persons who will manage the branch and represent the bank abroad;

3. a business plan, which shall, in addition to the information under Article 13, paragraph 2, items 3, 4 and 5 of the Law on Credit Institutions, contain economic substantiation of the need to open a branch of the bank in the respective country.

(3) Any person appointed to manage the branch of the bank abroad shall submit:

1. a certificate proving no previous conviction for a premeditated crime of a public character, or in case of non-residents, another document to the same effect;

2. information on:

а) full name, URN, date and place of birth, permanent address;

b) education, including the names of educational institutions where it was acquired, and length of study;

c) attended qualification training courses and seminars stating place and years of training;

d) command of foreign languages (both written and spoken) stating the proficiency level;

e) professional experience with details on the occupied positions by year;

f) current employment and a detailed job description of the present position;

g) a certified transcript of a diploma, or any other similar document of completed higher education;

3. a statement certifying the following circumstances:

a) that the person is not and has not been deprived of the right to hold a position of material liability;

b) that the person has not been a member of a managing or controlling body, or a general partner in a company which has been wound up due to bankruptcy, if creditors have not been paid;

c) that the person is not a spouse or a relative, in direct or lateral lineage up to the third degree, of another person who manages and represents the branch, or of a member of an internal control office of the branch;

d) that the person has not been a member of a managing or controlling body of a bank in the last five years prior to the date of the ruling on declaring the bank bankrupt;

14 Ordinance No. 2

e) the amount of taxes paid for the last three years, containing information whether the person has been penalized for tax evasion, and whether the person has any outstanding taxes.

(4) The Bulgarian National Bank shall refuse to grant a permission where:

1. there is a risk that the financial position of the bank may deteriorate as a result of opening a branch abroad;

2. the business plan submitted includes bank transactions or activities beyond the scope of the license granted to the bank;

3. the proposed organizational structure of the branch does not ensure its reliable and stable management;

4. the bank supervision exercised in the host country is not sufficiently effective;

5. an agreement of supervisory cooperation between the Bulgarian National Bank and the respective host supervisory authority of the branch has not been concluded and there are some legal or administrative impediments to the bank supervision exercised over the branch by the Bulgarian National Bank.

Article 21. Having received the permission by the competent supervisory authority in the host country, the bank shall send within ten days a copy of the permission to the Bulgarian National Bank.

Chapter 3 – Section II

Section II

Permission for Acquiring Shares in a Domestic Bank

Article 18. (1) Within the meaning and in accordance with this Section, granting or

refusing the permissions is made under Article 28, paragraphs 1, 2 and 4, and Article

31 of the Law on Credit Institutions.

(2) For granting a permission under paragraph 1, the natural persons and legal

entities shall specify in their applications the number, type, nominal value and total

nominal value, acquisition price per share and total acquisition price of the shares,

their portion in the bank’s capital, as well as:

12 Ordinance No. 2

1. information on the shares of the bank, already owned by the applicant and persons

related to him and with whom he maintains close relations;

2. a statement certifying if any personal or estate collateral has been established by

the bank in favour of the applicant or any person related to him.

(3) The documents under Article 7, paragraph 1 shall be enclosed to the application

under paragraph 2.

(4) The documents under Article 7, paragraph 2, and in the cases under Article 8

the envisaged or additionally requested documents shall be enclosed to the application

under paragraph 2.

(5) For granting a permission to the applicant natural person, in assessment of its

fitness, the respective requirements under Article 14, paragraph 3, items 6, 7, 9, 10,

11, 12 and 13 of the Law on Credit Institutions shall be applied.

(6) For granting a permission to the applicant legal entity, in assessment of its fitness,

the respective requirements under Article 14, paragraph 3, items 6, 7, 9, 10, 11,

12 and 13 of the Law on Credit Institutions shall be applied.

(7) In addition to inconformity with the requirements under paragraphs 5 and 6, the

Bulgarian National Bank shall refuse granting the permission if:

1. any suspicion of money laundering exists;

2. the information submitted by the applicant does not ensure enough data on the

persons exercising a direct or indirect control over the applicant, or on their financial

position and business activity nature;

3. the applicant or the persons exercising a direct or indirect control over him have

not proved their reliability and financial stability;

4. submitted information on transactions by which the applicant will acquire equity

interest in the bank or by which a direct or indirect control over the applicant has been

established arouses suspicion of simulated transactions.

Article 19. The Bulgarian National Bank shall conduct preliminary consultations

with competent supervisory authorities and request submission of written permission

for performing investment in the Republic of Bulgaria, if this is stipulated in applicable

foreign legislation, in the cases where in relation to the applicant under Article 18,

the conditions under Article 13, paragraphs 4 or 5 of the Law on Credit Institutions are

available.

Section II

Permission for Acquiring Shares in a Domestic Bank

Article 18. (1) Within the meaning and in accordance with this Section, granting or refusing the permissions is made under Article 28, paragraphs 1, 2 and 4, and Article 31 of the Law on Credit Institutions.

(2) For granting a permission under paragraph 1, the natural persons and legal entities shall specify in their applications the number, type, nominal value and total nominal value, acquisition price per share and total acquisition price of the shares, their portion in the bank’s capital, as well as:

12 Ordinance No. 2

1. information on the shares of the bank, already owned by the applicant and persons related to him and with whom he maintains close relations;

2. a statement certifying if any personal or estate collateral has been established by the bank in favour of the applicant or any person related to him.

(3) The documents under Article 7, paragraph 1 shall be enclosed to the application under paragraph 2.

(4) The documents under Article 7, paragraph 2, and in the cases under Article 8 the envisaged or additionally requested documents shall be enclosed to the application under paragraph 2.

(5) For granting a permission to the applicant natural person, in assessment of its fitness, the respective requirements under Article 14, paragraph 3, items 6, 7, 9, 10, 11, 12 and 13 of the Law on Credit Institutions shall be applied.

(6) For granting a permission to the applicant legal entity, in assessment of its fitness,

the respective requirements under Article 14, paragraph 3, items 6, 7, 9, 10, 11, 12 and 13 of the Law on Credit Institutions shall be applied.

(7) In addition to inconformity with the requirements under paragraphs 5 and 6, the Bulgarian National Bank shall refuse granting the permission if:

1. any suspicion of money laundering exists;

2. the information submitted by the applicant does not ensure enough data on the persons exercising a direct or indirect control over the applicant, or on their financial position and business activity nature;

3. the applicant or the persons exercising a direct or indirect control over him have not proved their reliability and financial stability;

4. submitted information on transactions by which the applicant will acquire equity interest in the bank or by which a direct or indirect control over the applicant has been established arouses suspicion of simulated transactions.

Article 19. The Bulgarian National Bank shall conduct preliminary consultations with competent supervisory authorities and request submission of written permission for performing investment in the Republic of Bulgaria, if this is stipulated in applicable foreign legislation, in the cases where in relation to the applicant under Article 18, the conditions under Article 13, paragraphs 4 or 5 of the Law on Credit Institutions are available.

Chapter Three – Permissions

Chapter Three

Permissions

Section I

General Provisions Regarding Permissions Issued by the

Bulgarian National Bank

Article 17. (1) Under the conditions and the procedure of this Chapter, granting or

refusing issuance of permissions is made under Articles 28, 31 and 122 of the Law on

Credit Institutions, as well as a certificate under Article 25 of the Law on Credit Institutions.

(2) The Bulgarian National Bank shall grant a permission under paragraph 1 where:

1. it has established that in respect of the applicant, all requirements for granting the

Ordinance No. 2 11

respective permission provided for in the Law on Credit Institutions and in this Chapter

are met; and

2. it has considered that grounds to refuse permission are not available.

(3) At applicant’s request for obtaining a permission, the Bulgarian National Bank

may relieve him of submission of particular documents provided for in this Chapter

where:

1. an year after submission of these documents related to granting a license, permission

or certificate to the applicant has not yet passed; and

2. the applicant has submitted a declaration, verified by a notary public, that no

changes have occurred in the circumstances ascertained by these documents.

(4) During the procedure of granting a permission the Bulgarian National Bank

may request from the applicant to submit within the set term additional information

and documents with the purpose of ascertaining all circumstances required for assessment

of available conditions for granting or refusing a permission.

(5) The Bulgarian National Bank shall come up with a decision on the application

for granting a permission within a three-month period after its receipt.

(6) Besides the grounds specified for respective permissions, the Bulgarian National

Bank may also refuse to grant a permission where it has established that:

1. all documents required for the respective permission are not attached to the

application, and no later than 14 days after its receipt these documents are not presented,

or

2. the applicant has not submitted within the set term all additional information and

documents under paragraph 4, or

3. documents submitted by the applicant contain incomplete, inconsistent, improper

or untrustworthy information, or

4. the applicant bank violates requirements under Chapters Four of the Law on

Credit Institutions or the bylaws on enactment of these requirements.

(7) Paragraph 6, item 4 shall not apply to the permissions under Article 28, paragraph

6, item 2 of the Law on Credit Institutions.

Chapter Three

Permissions

Section I

General Provisions Regarding Permissions Issued by the Bulgarian National Bank

Article 17. (1) Under the conditions and the procedure of this Chapter, granting or refusing issuance of permissions is made under Articles 28, 31 and 122 of the Law on Credit Institutions, as well as a certificate under Article 25 of the Law on Credit Institutions.

(2) The Bulgarian National Bank shall grant a permission under paragraph 1 where:

1. it has established that in respect of the applicant, all requirements for granting the Ordinance No. 2 11 respective permission provided for in the Law on Credit Institutions and in this Chapter are met; and

2. it has considered that grounds to refuse permission are not available.

(3) At applicant’s request for obtaining a permission, the Bulgarian National Bank may relieve him of submission of particular documents provided for in this Chapter

where:

1. an year after submission of these documents related to granting a license, permission or certificate to the applicant has not yet passed; and

2. the applicant has submitted a declaration, verified by a notary public, that no changes have occurred in the circumstances ascertained by these documents.

(4) During the procedure of granting a permission the Bulgarian National Bank may request from the applicant to submit within the set term additional information and documents with the purpose of ascertaining all circumstances required for assessment of available conditions for granting or refusing a permission.

(5) The Bulgarian National Bank shall come up with a decision on the application for granting a permission within a three-month period after its receipt.

(6) Besides the grounds specified for respective permissions, the Bulgarian National Bank may also refuse to grant a permission where it has established that:

1. all documents required for the respective permission are not attached to the application, and no later than 14 days after its receipt these documents are not presented,

or

2. the applicant has not submitted within the set term all additional information and documents under paragraph 4, or

3. documents submitted by the applicant contain incomplete, inconsistent, improper or untrustworthy information, or

4. the applicant bank violates requirements under Chapters Four of the Law on Credit Institutions or the bylaws on enactment of these requirements.

(7) Paragraph 6, item 4 shall not apply to the permissions under Article 28, paragraph

6, item 2 of the Law on Credit Institutions.

Chapter 2 – Section V

Section V

Conditions for Commencement of Bank Activity

Article 16. (1) The applicant who has been granted a bank license may commence

conducting bank activity after he has received confirmation from the Deputy Governor

of the Bulgarian National Bank heading the Banking Supervision Department and

after submission of the following documents and information:

1. a certified transcript of the court decision proving that the bank, respectively the

branch of the bank with a seat in a third country, has been entered in the Commercial

Register;

2. a document certifying that the bank has paid in its initial contribution to the

Deposit Insurance Fund; branches of banks with a seat in a third country shall submit

a document under the preceding sentence, provided that the provisions of Article 2,

paragraph 2 of the Law on Bank Deposit Guaranty apply to them;

3. a certified copy of a document verifying the ownership right on the premises

where bank activity will be conducted, or a lease contract;

4. a document certifying that the premises under item 3 comply with security and

protection requirements;

5. a certificate of fire protection compliance of the bank premises, issued by the

specialized regional fire protection authorities;

6. a detailed description of the information support system of the bank, including

measures for protection and transfer of information, as well as hardware and software

tools and technologies for in-house use.

(2) The funds deposited on a cumulative account may be used by the licensed

person after submitting to the servicing bank a written confirmation under paragraph

1, or may be withdrawn by the applicant after entry into force of the decision for the

refusal to grant a license.

Section V

Conditions for Commencement of Bank Activity Article

16. (1) The applicant who has been granted a bank license may commence conducting bank activity after he has received confirmation from the Deputy Governor of the Bulgarian National Bank heading the Banking Supervision Department and after submission of the following documents and information:

1. a certified transcript of the court decision proving that the bank, respectively the branch of the bank with a seat in a third country, has been entered in the Commercial Register;

2. a document certifying that the bank has paid in its initial contribution to the Deposit Insurance Fund; branches of banks with a seat in a third country shall submit a document under the preceding sentence, provided that the provisions of Article 2, paragraph 2 of the Law on Bank Deposit Guaranty apply to them;

3. a certified copy of a document verifying the ownership right on the premises where bank activity will be conducted, or a lease contract;

4. a document certifying that the premises under item 3 comply with security and protection requirements;

5. a certificate of fire protection compliance of the bank premises, issued by the specialized regional fire protection authorities;

6. a detailed description of the information support system of the bank, including measures for protection and transfer of information, as well as hardware and software tools and technologies for in-house use.

(2) The funds deposited on a cumulative account may be used by the licensed person after submitting to the servicing bank a written confirmation under paragraph 1, or may be withdrawn by the applicant after entry into force of the decision for the refusal to grant a license.

Chapter 2 – Section IV

Section IV

Procedure for the Bulgarian National Bank to Come up with a

Decision on an Application for a License

Article 14. (1) Within three months after receipt of the application and all required

documents, the Bulgarian National Bank shall come up with a decision for license

issuing, provided the conditions under Article 15, paragraph 1 of the Law on Credit

Institutions are met, or will refuse to grant a license.

(2) To certify that the provisions of Article 15, paragraph 1 of the Law on Credit

Ordinance No. 2 9

Institutions are met, the applicant shall submit the following:

1. information on the paid in contributions, no less than the minimum required

capital to conduct bank activities;

2. documents certifying that payments for subscribed shares have been deposited

on a cumulative account opened with a domestic bank as agreed with the Bulgarian

National Bank;

3. a curriculum vitae and documents of the appointed administrators certifying

their qualifications and professional experience required in the field of activities they

will perform;

4. information on the buildings and premises suitable for performing bank activities,

and the necessary technical equipment;

5. a decision on the establishment of an internal control office and the rules for its

activity;

6. information on:

а) the person who will be in charge of the internal control office, his curriculum

vitae, a certificate proving no previous conviction, copies of diplomas and other documents

certifying his professional qualification and experience, a statement of existence

of any relatedness with other persons;

b) appointed internal control officers: curriculum vitae and other documents certifying

the qualifications and professional experience required.

7. administrative and accounting procedures ensuring the reliable conducting of

activity and control over it;

8. internal terms and procedures for:

а) credit activity (lending operations);

b) liquidity management;

c) risk management and control.

Article 15. The issued license is printed on a special type of paper, carrying a

watermark bearing the Bulgarian National Bank logo, with the colours of the Republic

of Bulgaria and a wax seal of the Bulgarian National Bank, and shall contain the following

requisites:

1. the heading ‘License’;

2. the name of the body issuing the license;

3. the person to whom the license is issued;

4. the legal grounds for issuing the license;

5. the scope of activities covered by the license, respectively transactions restricted

by the Bulgarian National Bank;

6. the signature of the Governor of the Bulgarian National Bank.

Section IV

Procedure for the Bulgarian National Bank to Come up with aDecision on an Application for a License Article 14. (1) Within three months after receipt of the application and all required documents, the Bulgarian National Bank shall come up with a decision for license issuing, provided the conditions under Article 15, paragraph 1 of the Law on Credit Institutions are met, or will refuse to grant a license.

(2) To certify that the provisions of Article 15, paragraph 1 of the Law on Credit

Ordinance No. 2 9

Institutions are met, the applicant shall submit the following:

1. information on the paid in contributions, no less than the minimum required capital to conduct bank activities;

2. documents certifying that payments for subscribed shares have been deposited on a cumulative account opened with a domestic bank as agreed with the Bulgarian National Bank;

3. a curriculum vitae and documents of the appointed administrators certifying their qualifications and professional experience required in the field of activities they will perform;

4. information on the buildings and premises suitable for performing bank activities, and the necessary technical equipment;

5. a decision on the establishment of an internal control office and the rules for its activity;

6. information on:

а) the person who will be in charge of the internal control office, his curriculum vitae, a certificate proving no previous conviction, copies of diplomas and other documents certifying his professional qualification and experience, a statement of existence of any relatedness with other persons;

b) appointed internal control officers: curriculum vitae and other documents certifying the qualifications and professional experience required.

7. administrative and accounting procedures ensuring the reliable conducting of activity and control over it;

8. internal terms and procedures for:

а) credit activity (lending operations);

b) liquidity management;

c) risk management and control.

Article 15. The issued license is printed on a special type of paper, carrying a watermark bearing the Bulgarian National Bank logo, with the colours of the Republic of Bulgaria and a wax seal of the Bulgarian National Bank, and shall contain the following requisites:

1. the heading ‘License’;

2. the name of the body issuing the license;

3. the person to whom the license is issued;

4. the legal grounds for issuing the license;

5. the scope of activities covered by the license, respectively transactions restricted by the Bulgarian National Bank;

6. the signature of the Governor of the Bulgarian National Bank.

Chapter 2 – Section III

Section III

License to a Bank with a Seat in a Third Country for Conducting

Bank Activity on the Territory of the Republic of Bulgaria

through a Branch

Section III

License to a Bank with a Seat in a Third Country for Conducting Bank Activity on the Territory of the Republic of Bulgaria through a Branch

Article 13. (1) A bank with a seat in a third country, wishing to obtain a license to conduct bank activity on the territory of the Republic of Bulgaria through a branch, shall file a written application with the Governing Council of the Bulgarian National Bank through the Governor of the Bulgarian National Bank and the Deputy Governor heading the Banking Supervision Department. The application shall contain the following information:

1. a motivated statement of the reasons to establish a branch of the bank on the territory of the Republic of Bulgaria;

2. a detailed description of the types of bank transactions and activities, the foreign bank intends to conduct through its branch on the territory of the Republic of Bulgaria;

3. the legal form, the name, registered office, head office address of the bank and branch company; the address of the bank’s head office shall be in the country where the competent supervisory authority has granted license to the bank and where the said bank actually conducts bank activity;

Ordinance No. 2 7

4. a register and the registration number of the bank, if required by the applicable law;

5. the national law that the bank applies.

(2) The following shall be attached to the application:

1. a certified transcript of the registration certificate of the bank with current information concerning the registered office and head office address, subject of activities, amount of capital, management system, and the persons who represent and manage the bank according to the register, if any, where the certificate is entered, the way of representation and data on the authorization of the persons;

2. a certified transcript of the bank license issued by the competent home supervisory authority, including a detailed description of the permitted types of bank transactions and activities;

3. a list of the persons related to the bank within the meaning of § 1, item 4, letters ‘c’ − ‘k’ of the Law on Credit Institutions;

4. a certified transcript of the Articles of Association, respectively Memorandum of  Association, and other Acts of Association of the bank;

5. a certified transcript of the decision for establishment of a branch in the Republic of Bulgaria issued by the competent management body of the bank with a seat in a third country;

6. a business plan of the branch which, in addition to the data under Article 5, paragraph 2, items 6 and 7 of this Ordinance and Article 13, paragraph 2, items 3, 4 and 5 of the Law on Credit Institutions, shall also contain a detailed description of the functions of the branch, as well as its relations with the bank’s head office in respect of decision-making on its operations on the territory of the Republic of Bulgaria;

7. audited financial statements of the bank for the last three years;

8. a certified transcript of the act of the competent management body of the bank on the election (appointment) of at least two persons who will manage and represent the branch of the bank on the territory of the Republic of Bulgaria and the documents for the issuance of certificates to these persons according to Article 11, paragraph 2 of the Law on Credit Institutions;

9. a written approval for the establishment of the branch issued by the competent home supervisory authority, if required;

10. a written statement by the competent management body of the bank to submit the annual financial statements, as well as semiannual information on the capital adequacy of the bank.

(3) In addition to the application, a written statement by the bank’s home supervisory authority shall be submitted, containing the following:

1. an updated evaluation of the financial position of the bank, including the amount of the bank’s own capital, capital adequacy ratios of the bank, on a consolidated basis

8 Ordinance No. 2

inclusive, and the supervisory measures and sanctions taken in respect of the bank;

2. a statement that the bank is subject to supervision on a consolidated basis;

3. a commitment to duly notify the Bulgarian National Bank of:

а) any supervisory measures taken in respect of the bank;

b) any changes in the capital adequacy, liquidity or other indicators which could have a negative effect on the stability of the bank and its branch in the Republic of Bulgaria;

c) any amendments to prudential banking supervision regulations and any other conditions that could significantly affect the operations of the bank and its branch in the Republic of Bulgaria;

d) any changes in the scope of bank secrecy and requirements in relation to its security and disclosure in the bank’s home country in connection with the transactions of its branches abroad;

e) any changes in the deposit insurance scheme in the bank’s home country;

f) any sudden occurrence of insolvency or overindebtedness of the bank;

g) the deposit insurance scheme which will be applied to the branch depositors;

4. a commitment to cooperation with the Bulgarian National Bank in conducting on-site examinations on the premises of the branch, as well as submission of information upon request.

(4) Where the applicant wishes to conduct activities under Article 2, paragraph 2,

items 8 and/or 9 of the Law on Credit Institutions, he shall submit the documents, required by the Financial Supervision Commission on the issuance of permission to conduct activity as investment intermediary, in accordance with the Law on Public Offering of Securities and the bylaws of its enactment.

(5) The applicant shall submit updated copies, in Bulgarian language, of the current legislation regulating bank activity in the country of domicile, including prudential regulations and the functions and powers of the respective competent supervisory authority.

(6) Any person elected, respectively appointed, to manage and represent the branch of the bank with a registered office in a third country shall submit the documents under Article 10, paragraph 1 and Article 11.

Chapter 2 – Section II

Section II

License for an Electronic Money Institution

Article 12. To file an application for issuance of an electronic money institution

license, the applicant shall meet the requirements of Article 5, paragraphs 1 and 2, and

Articles 6–11.

Section II

License for an Electronic Money Institution

Article 12. To file an application for issuance of an electronic money institution license, the applicant shall meet the requirements of Article 5, paragraphs 1 and 2, and Articles 6–11.

Chapter Two

Licenses

Section I

License for a Bank

Article 5. (1) The application for a bank license shall be filed with the Governing

Council of the Bulgarian National Bank through the Governor of the Bulgarian National

Bank and Deputy Governor heading the Banking Supervision Department. It

shall contain the name, registered office and head office address of the bank, the amount

of capital and the part of it which shall be paid in with the bank incorporation, and

specify exhaustively the transactions and activities under Article 2 of the Law on Credit

Institutions which the bank will carry out.

(2) The documents enclosed to the application under Article 13, paragraph 2 of the

Law on Credit Institutions shall satisfy the following additional requirements:

1. an applicant’s Articles of Association providing for the activities that the bank

will carry out, authorization to sign and represent the bank, and information concerning

the internal control system;

2. besides other constitutive documents under Article 13, paragraph 2, item 1 of the

Law on Credit institutions, the applicant shall enclose certified transcripts of the bank’s

Minutes of the Constituent containing decisions made thereof and the Minutes of

Meetings of the elected managing bodies of the bank;

3. documents containing data on the paid-in and subscribed shares under Article

13, paragraph 2, item 2 of the Law on Credit Institutions shall include a list of bank

shareholders, data on the amount of subscribed capital that each shareholder has paid

and documents certifying that each subscribing shareholder has paid into the bank

account of the incorporated company at least 25 per cent of the total nominal value or

issuing value of the subscribed shares provided for in the Articles of Association.

Ordinance No. 2 3

(3) Where the applicant shall conduct activities under Article 2, paragraph 2, items

8 and/or 9 of the Law on Credit Institutions, he shall apply the documents required by

the Financial Supervision Commission for the issuance of permission to conduct activities

as investment intermediary in accordance with the Law on Public Offering of

Securities, and the bylaws on its enactment.

(4) The documents under Articles 6–10 shall be enclosed to the application.

Article 6. (1) Any natural person, having subscribed for three per cent or over three

per cent of the voting shares, shall submit the following documents:

1. full name of the person;

2. place of birth and unified registration number (URN);

3. nationality;

4. number of the ID card, including date and place of issue;

5. permanent home address and residence of the person;

6. the person’s profession or occupation;

7. description of the professional activity of the person for the last five years;

8. data on the amount of the income received by the person and taxes paid for the

last five years;

9. a declaration that certifies the circumstances under Article 13, paragraph 2, item

7, letters ‘а’, ‘b’ and ‘c’ of the Law on Credit Institutions and information weather the

person has any outstanding taxes, or has been penalized for tax evasion;

10. a declaration that certifies the existence or absence of relatedness with other

persons with the meaning of § 1, item 4 of the Law on Credit Institutions with the

indication of the names and addresses of related persons;

11. a certificate proving no previous conviction or, in case of a foreign person,

another document to the same effect;

12. documents about the available funds in the banks, where the person has accounts,

as of no longer than 30 days preceding the date of filing the application;

13. a declaration about the type and size of person’s obligations, valid as of no

longer than 30 days preceding the date of filing the application and a certificate for the

presence of any outstanding taxes or other public obligations;

14. a list of the banks where the person has opened accounts.

(2) Any legal entity having subscribed for three per cent or over three per cent of

the voting shares shall submit, in addition to the documents under Article 13, paragraph

2, items 7 and 8 of the Law on Credit Institutions, the following:

1. structure of the legal entity capital and its allocation between the shareholders

(partners);

2. Articles of Association or other similar documents;

3. a certified transcript of the decision of the competent management body according

to a law, a certificate from a commercial or other public register that the entity is

4 Ordinance No. 2

registered therein, Articles of Association, or Memorandum of Association concerning

the person’s interest in the bank’s capital;

4. auditor’s reports and financial statements for the last three years;

5. a declaration that certifies the relatedness with other persons within the meaning

of § 1, item 4 of the Law on Credit Institutions, with the indication of the names and

addresses of related persons, undersigned by the persons who manage and represent

the legal entity according to a law, Articles of Association, or Memorandum of Association;

6. a list of the banks where the legal entity has opened accounts;

7. balance sheets, income statements as of no longer than 30 days preceding the

date of filing the application;

8. documents about the available funds in the banks, where the person has accounts,

which are as of no longer than 30 days preceding the date of filing the application;

9. a certificate for the presence of any outstanding taxes or other public obligations

as of no longer than 30 days preceding the date of filing the application.

Article 7. (1) Any natural person having subscribed for ten per cent or over ten per

cent of the voting shares shall submit, in addition to the data required under Article 6,

paragraph 1, the following:

1. an employment record of the person for the last ten years;

2. a statement certifying the following circumstances:

а) whether the person has been a member of a managing or controlling body or a

general partner in a company which has been wound up due to bankruptcy, if creditors

have not been paid;

b) whether any related person has been declared insolvent, respectively bankrupt,

or has been under a forced liquidation procedure for the last ten years;

c) whether any civil litigations or enforcement proceedings have been instituted

against him or against a person related to him for outstanding loans for the last ten

years.

(2) Any legal entity having subscribed for ten per cent or over ten per cent of the

voting shares, shall submit, in addition to the data required under Article 6, paragraph

2, the following:

1. a description of the business activity of the enterprise for the last ten years;

2. a letter of reference certifying good-faith performance of obligations issued by a

bank servicing the business of the said person signed by the persons authorized to

manage and represent the bank;

3. a declaration certifying compliance with the requirements under paragraph 1,

item 2, undersigned by the persons who manage and represent the legal entity according

to a law, Articles of Association, or Memorandum of Association;

4. detailed information about the structure of the group where the applicant participates;

Ordinance No. 2 5

5. information on the enterprises’ financial position the applicant maintains close

relations with.

(3) Any legal entity with a seat in a third country, having subscribed for 10 per cent

or over 10 per cent of the voting shares, in addition to the documents under paragraph

2, shall submit a document on the investment grade assigned by the External Credit

Assessment Institution recognized by the Bulgarian National Bank in accordance with

Article 40, paragraph 2, item 2 of the Law on Credit Institutions.

Article 8. (1) Where a person having subscribed for 25 per cent or over 25 per cent

of the voting shares is a foreign bank with a seat in a third country, or a company

which has a foreign bank as a subsidiary with a seat in a third country, or is controlled

by a person that also controls a foreign bank with a seat in a third country, the Bulgarian

National Bank shall:

1. carry on preliminary consultations with the competent supervisory authority of

the bank, where the seat of this bank is in a third country; and

2. require submission of an appropriate authorization for making the investment in

relation to the incorporation of a bank in the Republic of Bulgaria, where this is required

under the home country’s legislation.

(2) In the cases where a person having subscribed for 25 per cent or over 25 per cent

of the voting shares is a foreign bank with a seat in a third country, the applicant shall

provide a statement of opinion of this bank as regards the envisaged contribution to the

development of competition in the bank services market in the Republic of Bulgaria.

Article 9. Where the applicant shareholder is a foreign person, the Bulgarian National

Bank shall require information on the effective laws and bylaws applicable in

the foreign bank’s country of domicile, regulating the shareholder’s legal status and

its activities and information regarding functions and powers of the competent banking

supervisory authority, if there is such authority.

Article 10. (1) Any natural person elected member of the supervisory board shall

submit the following information and documents:

1. full name, URN, nationality and permanent address;

2. a certificate proving no previous conviction or, in case of a foreign person, another

document to the same effect;

3. a declaration certifying that the person meets the requirements under Article 11,

paragraph 1, items 4–8 of the Law on Credit Institutions;

4. a declaration, certifying the amount of taxes paid for the last five years, providing

information whether the person has been penalized for tax evasion, and whether the

person has any outstanding taxes;

5. a declaration, certifying the existence or absence of relatedness with other persons.

(2) Any legal entity elected member of the supervisory board of a bank shall submit

the following:

6 Ordinance No. 2

1. a certificate issued by the court that it has been entered in the commercial or

another public register;

2. full name of the natural person authorized to represent the legal entity in the

supervisory board, as well as a transcript of the decision of the competent body on his

authorization.

(3) The natural person who will represent the legal entity in the supervisory board

shall submit the documents under paragraph 1.

Article 11. Any person elected member of the management board, or the board of

directors respectively, shall submit the documents required for the issuance of a certificate

under Article 11, paragraph 2 of the Law on Credit Institutions, and:

1. a declaration certifying the amount of taxes paid for the last five years providing

information whether the person has been penalized for tax evasion, and whether the

person has any outstanding taxes;

2. a declaration certifying the existence or absence of relatedness with other persons.

Licenses

Section I

License for a Bank

Article 5. (1) The application for a bank license shall be filed with the Governing Council of the Bulgarian National Bank through the Governor of the Bulgarian National Bank and Deputy Governor heading the Banking Supervision Department. It shall contain the name, registered office and head office address of the bank, the amount of capital and the part of it which shall be paid in with the bank incorporation, and specify exhaustively the transactions and activities under Article 2 of the Law on Credit Institutions which the bank will carry out.

(2) The documents enclosed to the application under Article 13, paragraph 2 of the Law on Credit Institutions shall satisfy the following additional requirements:

1. an applicant’s Articles of Association providing for the activities that the bank will carry out, authorization to sign and represent the bank, and information concerning the internal control system;

2. besides other constitutive documents under Article 13, paragraph 2, item 1 of the Law on Credit institutions, the applicant shall enclose certified transcripts of the bank’s Minutes of the Constituent containing decisions made thereof and the Minutes of Meetings of the elected managing bodies of the bank;

3. documents containing data on the paid-in and subscribed shares under Article 13, paragraph 2, item 2 of the Law on Credit Institutions shall include a list of bank shareholders, data on the amount of subscribed capital that each shareholder has paid and documents certifying that each subscribing shareholder has paid into the bank account of the incorporated company at least 25 per cent of the total nominal value or issuing value of the subscribed shares provided for in the Articles of Association.

Ordinance No. 2 3

(3) Where the applicant shall conduct activities under Article 2, paragraph 2, items 8 and/or 9 of the Law on Credit Institutions, he shall apply the documents required by the Financial Supervision Commission for the issuance of permission to conduct activities as investment intermediary in accordance with the Law on Public Offering of Securities, and the bylaws on its enactment.

(4) The documents under Articles 6–10 shall be enclosed to the application.

Article 6. (1) Any natural person, having subscribed for three per cent or over three per cent of the voting shares, shall submit the following documents:

1. full name of the person;

2. place of birth and unified registration number (URN);

3. nationality;

4. number of the ID card, including date and place of issue;

5. permanent home address and residence of the person;

6. the person’s profession or occupation;

7. description of the professional activity of the person for the last five years;

8. data on the amount of the income received by the person and taxes paid for the last five years;

9. a declaration that certifies the circumstances under Article 13, paragraph 2, item

7, letters ‘а’, ‘b’ and ‘c’ of the Law on Credit Institutions and information weather the person has any outstanding taxes, or has been penalized for tax evasion;

10. a declaration that certifies the existence or absence of relatedness with other persons with the meaning of § 1, item 4 of the Law on Credit Institutions with the indication of the names and addresses of related persons;

11. a certificate proving no previous conviction or, in case of a foreign person, another document to the same effect;

12. documents about the available funds in the banks, where the person has accounts, as of no longer than 30 days preceding the date of filing the application;

13. a declaration about the type and size of person’s obligations, valid as of no

longer than 30 days preceding the date of filing the application and a certificate for the presence of any outstanding taxes or other public obligations;

14. a list of the banks where the person has opened accounts.

(2) Any legal entity having subscribed for three per cent or over three per cent of the voting shares shall submit, in addition to the documents under Article 13, paragraph

2, items 7 and 8 of the Law on Credit Institutions, the following:

1. structure of the legal entity capital and its allocation between the shareholders (partners);

2. Articles of Association or other similar documents;

3. a certified transcript of the decision of the competent management body according to a law, a certificate from a commercial or other public register that the entity is

4 Ordinance No. 2

registered therein, Articles of Association, or Memorandum of Association concerning the person’s interest in the bank’s capital;

4. auditor’s reports and financial statements for the last three years;

5. a declaration that certifies the relatedness with other persons within the meaning of § 1, item 4 of the Law on Credit Institutions, with the indication of the names and addresses of related persons, undersigned by the persons who manage and represent the legal entity according to a law, Articles of Association, or Memorandum of Association;

6. a list of the banks where the legal entity has opened accounts;

7. balance sheets, income statements as of no longer than 30 days preceding the date of filing the application;

8. documents about the available funds in the banks, where the person has accounts, which are as of no longer than 30 days preceding the date of filing the application;

9. a certificate for the presence of any outstanding taxes or other public obligations as of no longer than 30 days preceding the date of filing the application.

Article 7. (1) Any natural person having subscribed for ten per cent or over ten per cent of the voting shares shall submit, in addition to the data required under Article 6,

paragraph 1, the following:

1. an employment record of the person for the last ten years;

2. a statement certifying the following circumstances:

а) whether the person has been a member of a managing or controlling body or a general partner in a company which has been wound up due to bankruptcy, if creditors have not been paid;

b) whether any related person has been declared insolvent, respectively bankrupt, or has been under a forced liquidation procedure for the last ten years;

c) whether any civil litigations or enforcement proceedings have been instituted

against him or against a person related to him for outstanding loans for the last ten years.

(2) Any legal entity having subscribed for ten per cent or over ten per cent of the voting shares, shall submit, in addition to the data required under Article 6, paragraph

2, the following:

1. a description of the business activity of the enterprise for the last ten years;

2. a letter of reference certifying good-faith performance of obligations issued by a bank servicing the business of the said person signed by the persons authorized to manage and represent the bank;

3. a declaration certifying compliance with the requirements under paragraph 1, item 2, undersigned by the persons who manage and represent the legal entity according to a law, Articles of Association, or Memorandum of Association;

4. detailed information about the structure of the group where the applicant participates;

Ordinance No. 2 5

5. information on the enterprises’ financial position the applicant maintains close relations with.

(3) Any legal entity with a seat in a third country, having subscribed for 10 per cent or over 10 per cent of the voting shares, in addition to the documents under paragraph

2, shall submit a document on the investment grade assigned by the External Credit Assessment Institution recognized by the Bulgarian National Bank in accordance with Article 40, paragraph 2, item 2 of the Law on Credit Institutions.

Article 8. (1) Where a person having subscribed for 25 per cent or over 25 per cent of the voting shares is a foreign bank with a seat in a third country, or a company which has a foreign bank as a subsidiary with a seat in a third country, or is controlled by a person that also controls a foreign bank with a seat in a third country, the Bulgarian

National Bank shall:

1. carry on preliminary consultations with the competent supervisory authority of the bank, where the seat of this bank is in a third country; and

2. require submission of an appropriate authorization for making the investment in relation to the incorporation of a bank in the Republic of Bulgaria, where this is required under the home country’s legislation.

(2) In the cases where a person having subscribed for 25 per cent or over 25 per cent of the voting shares is a foreign bank with a seat in a third country, the applicant shall provide a statement of opinion of this bank as regards the envisaged contribution to the development of competition in the bank services market in the Republic of Bulgaria.

Article 9. Where the applicant shareholder is a foreign person, the Bulgarian National Bank shall require information on the effective laws and bylaws applicable in the foreign bank’s country of domicile, regulating the shareholder’s legal status and its activities and information regarding functions and powers of the competent banking supervisory authority, if there is such authority.

Article 10. (1) Any natural person elected member of the supervisory board shall submit the following information and documents:

1. full name, URN, nationality and permanent address;

2. a certificate proving no previous conviction or, in case of a foreign person, another document to the same effect;

3. a declaration certifying that the person meets the requirements under Article 11, paragraph 1, items 4–8 of the Law on Credit Institutions;

4. a declaration, certifying the amount of taxes paid for the last five years, providing information whether the person has been penalized for tax evasion, and whether the person has any outstanding taxes;

5. a declaration, certifying the existence or absence of relatedness with other persons.

(2) Any legal entity elected member of the supervisory board of a bank shall submit the following:

6 Ordinance No. 2

1. a certificate issued by the court that it has been entered in the commercial or another public register;

2. full name of the natural person authorized to represent the legal entity in the supervisory board, as well as a transcript of the decision of the competent body on his authorization.

(3) The natural person who will represent the legal entity in the supervisory board shall submit the documents under paragraph 1.

Article 11. Any person elected member of the management board, or the board of directors respectively, shall submit the documents required for the issuance of a certificate under Article 11, paragraph 2 of the Law on Credit Institutions, and:

1. a declaration certifying the amount of taxes paid for the last five years providing information whether the person has been penalized for tax evasion, and whether the person has any outstanding taxes;

2. a declaration certifying the existence or absence of relatedness with other persons.