Hungary proposes new rules on investment research and issuer-sponsored research

The Government of Hungary has published a draft bill to amend Act CXXXVIII of 2007 on Investment Firms and Commodity Dealers, and on the Regulations Governing their Activities (the Investments Firms Act). 

The proposed amendments to the Investment Firms Act would implement the EU Listing Act and introduce new rules on how investment research is prepared, labelled and paid for, which will have a particular impact on investment firms, research providers and issuers that commission or disseminate research.

The draft updates the terminology used in the Investment Firms Act. References to “investment analysis” would be replaced by “investment research”, bringing the Hungarian wording more in line with the EU market-abuse framework.

In practical terms, investment firms should review whether their internal policies, research templates, client disclosures, disclaimers and marketing materials still refer to the current terminology and whether those references will need to be updated.

The draft also sets a general standard for research. Research prepared by an investment firm or a third party and used by or sold to investment firms, their clients or potential clients must be fair, clear and not misleading. Where the conditions in Commission Delegated Regulation (EU) 2017/565 applicable to investment research are met, the material must be identified as “investment research” or by a similar term. This may require firms to revisit how research, market commentary and promotional content are categorised and labelled.

A key new element is the introduction of a regulated label for issuer-paid research. Research paid for in whole or in part by the issuer may be labelled as “issuer-sponsored research” only if it is prepared in accordance with the EU Code of Conduct for issuer-sponsored research. Investment firms preparing or selling such research would need policies and procedures to check and evidence compliance with that Code.

If issuer-paid material does not meet the Code of Conduct, it must be treated as marketing communication rather than issuer-sponsored research. This distinction is important because it affects both the label used for the material and the regulatory rules that apply to its distribution. Firms involved in the production or distribution of issuer-paid research should therefore assess early whether their process satisfies the Code and whether they can retain sufficient evidence of compliance.

The draft also assigns a specific filing role to issuers. The issuer must submit issuer-sponsored research to the Hungarian supervisory authority, which will act as the collection body for the European Single Access Point, and provide metadata confirming compliance with the EU Code of Conduct. The draft clarifies that issuer-sponsored research is neither regulated information under capital markets rules nor investment research under the Investment Firms Act, and therefore not subject to the same level of regulatory scrutiny. This does not mean that this research is unregulated. Labelling requirements, Code compliance obligations and supervisory powers would continue to apply.

The proposed rules on paying for third-party research would also become more flexible. Investment firms would be able to pay for external research either jointly with execution services or separately. For any joint payment or combined cost, the agreement with the research provider must identify the part attributable to investment research. Regardless of the payment model, the firm must disclose its payment approach and policy to clients and, at least once a year, assess the quality, usefulness and value of the research, including how it contributes to better investment decisions. If the firm pays separately for research, it must fund the research from its own resources or from a dedicated research payment account.

The draft expressly excludes certain services from the concept of research for these purposes. Trading commentary directly linked to the execution of transactions in financial instruments and other personalised trade advisory services would not be treated as research. This exclusion is narrow and does not preclude other client communication, investment advice, suitability, inducement or marketing requirements that may apply.

Investment firms would also need to keep records of all known costs related to third-party research and make those records available to clients, on request, on an annual basis. Firms should consider whether existing systems capture the necessary cost information, particularly where execution and research services are acquired together.

The proposed supervisory consequences are also notable. If issuer-sponsored research prepared or sold by an investment firm does not comply with the EU Code of Conduct, the Hungarian supervisory authority may suspend its distribution by investment firms and may warn the public.

The proposed bill has been under public consultation. Interested parties were invited to submit comments until 2 June 2026. As currently drafted, the key research-related provisions would enter into force on 5 June 2026. Investment firms, research providers and issuers should use the short implementation timetable to review their research policies, issuer-sponsored research processes, payment arrangements, client disclosures and record-keeping.

For more information on the proposed amendments and how they may affect your investment services or research arrangements in Hungary, contact your CMS client partner or the CMS experts who contributed to this article.

The article was co-authored by Luca Pinter.