Legal Framework

New Regulation (MiFID 2)

Dear Clients,

As of January 3rd, 2018, the requirements of the new European legal framework in the financial markets field are in force – Directive 2014/65/ EU of the Parliament and of the Council and Regulation № 600/2014 of the Parliament and of the Council on markets in financial instruments (“MiFID 2/MiFIR package”)

In the process of regulating the activities concerning the provision of investment services and activities related to financial instruments, certain technical standards have been developed by the European Securities and Markets Authority (ESMA) and approved by the European Commission which standards provide harmonized application of the MiFID2/MiFIR package within the European Union.

Primary aim of the legislative changes is the strengthening of the integration, the competitiveness, the efficiency and the integrity of the financial markets in the EU as well as the guarantee of a high protection grade for the investors.

In relation with the application of the provisions on a national scale the new Markets in Financial Instruments Act together with the new regulations issued by the Financial Supervision Commission which develop and upgrade the existing requirements towards the activity organization of the investment intermediaries, e.g. concerning their relationships with clients.

According to the regulatory requirements First Investment Bank AD in its capacity of an investment intermediary provides information to its clients related to:

Their publication on the website aims at provision of information to the clients, and to the potential clients of First Investment Bank AD respectively, subject of the terms and conditions of article 3 of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive2014/65/ EU of the Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (Commission Delegated Regulation (EU) 2017/565). 



Client categorization
According to the Markets in Financial Instruments Act all investment intermediaries shall categorize their clients in one of the following categories: 
  1. retail
  2. professional
  3. eligible counterparty
The level of protection for each of the client categories depends on the estimated experience and knowledge inherent to the respective category and as regulated in the Markets in Financial Instruments Act:
  • The retail clients receive full protection level;
  • The professional clients receive the protection level stipulated in the Markets in Financial Instruments Act in accordance with their experience and knowledge; 
  • The eligible counterparties receive the lowest level of protection.
The level of protection affects the relations the Bank maintains with the clients, with the differences being as follows:
  • Type and volume of information provided to the Client;
  • Type of information required from the Client;
  • Process on provision of investment services, performance of investment services, execution of clients’ orders and provision of the respective level of protection.

In its activity as an investment intermediary First Investment Bank AD applies Rules on client categorization, approved by the Bank’s Managing Board. They are published on the bank’s website for the purpose of providing information to the clients, and to the potential clients of First Investment Bank AD respectively, subject of the terms and conditions of article 3 of Commission Delegated Regulation (EU) 2017/565. 



Client orders
First Investment Bank AD Policy on Execution of Client Orders

In its capacity of an investment intermediary First Investment Bank AD executes orders for financial instruments to the best interests and results for the client in accordance with the approved by the Bank’s Managing Policy of First Investment Bank AD for execution of customer orders.

The Policy is published on the bank’s website for the purpose of providing information to the clients, and to the potential clients of First Investment Bank AD respectively, subject of the terms and conditions of article 3 of Commission Delegated Regulation (EU). 

Places of execution of clients’ orders

In accordance with the Markets in Financial Instruments Act, in its capacity of a investment intermediary provides to its clients information regarding the places of execution of clients’ orders, in view of provision of best possible service and performance conditions. 

Main places the First Investment Bank AD executes clients’ orders are as follows:

І. Execution Venues

  • Regulated market in Bulgaria - „Bulgarian Stock Exchange - Sofia" AD - for financial instruments, registered in Bulgarian depository institutions and admitted to trading on „Bulgarian Stock Exchange - Sofia" AD: equity securities, capital increase rights/warrants, corporate or municipal bonds, compensatory instruments, exchange -traded funds (ETFs), bulgarian government securities held by the Bulgarian National Bank as a official depository of the State.
  • Regulated markets, Organised/Multilateral Trading Facility in Europe and the USA - for equity securities, rights, corporate or municipal bonds, accepted for trading on the exchange, exchange-traded funds (ETFs), depository receipts and other exchange -traded instruments;
  • E-Bond /Multilateral Trading Facility/ is an electronic functionality of the Bloomberg Professional Platform and apporoved trading system with government securities.

ІІ. OTC markets for over-the-counter derivative instruments; government, municipal and corporate bonds, offered to international markets and cash instruments not trading on the exchange, as well as for financial instruments, addmitted to trading on tarding venues.

The Bank conducts for its clients derivative financial instruments transactions on interest rates and foreign currencies such as interest rate swaps, including currency swaps, interest rate swaps with margin, interest rate collar, forward interest rate swaps, currency forwards, currency options, flexible options, etc. These are over-the-counter transactions conducted between the client and the Bank.

Other OTC transactions (with government debentures or money market instruments) shall be executed at the places set for such instruments’ places of execution.

First Investment Bank AD shall review periodically the places for execution, taking into consideration the products it delivers in view of the systematic achievement of the market best possible results upon the execution of any and all clients’ orders. If necessary, in such cases the list with the places of execution shall be updated.



Conflict of interests

In accordance with the Bank’s activity in its capacity of an investment intermediary Conflict of interests is a situation occurring in relation with provision of investment and/or supporting services, which may harm the client’s interest.

First Investment Bank AD applies Policy for handling conflicts of interest of First Investment Bank AD in its capacity as an investment intermediary, which contains effective rules and procedures for prevention of conflict of interests and which form a part of its internal organization and procedures for provision of investment services and activities. They include, in relation to each particular service or activity performed by or account of First Investment Bank AD, the circumstances considered a conflict of interests causing risk of harming the interests of a client or Bank’s clients, including such circumstances which are or should be known to the Bank and which may cause a conflict of interests, including  as a result of the Fibank's Group structure and the business activity of the structures thereto.

The measures and procedures applied aim at the timely establishment and prevention of any conflicts of interests, which may arise between the Bank and any individual clients and/or between the Bank, in its capacity of an investment intermediary, including its members of the Managing or Supervisory Board thereof, any other persons who can conclude independently or jointly with another party transactions on behalf of the Bank and any other parties contracted by First Investment Bank, and any of the related thereto parties based on a control, on one side and the clients on the other.

In case that despite the policy, procedures and measures’ application a conflict of interest still exists, First Investment Bank AD shall execute any actions on behalf and in the name of a client after informing him about the general nature and/or reasons for the potential conflicts of interest. In case despite the measures applied and the Policy on Handling of Conflict of Interests established such conflict occurs the riles and regulations establish do secure fair client treatment, information disclosure and prevention of any harm to the clients’ interests.

The publication of the present summarized information regarding the First Investment Bank AD Policy for handling conflicts of interest in its capacity as an investment intermediary is made for the purpose of informing the clients, and the potential clients of First Investment Bank AD respectively, subject of the terms and conditions of article 47, paragraph 1, letter "h" and article 3 of Commission Delegated Regulation (EU) 2017/565.