On 2 October 2025, Hungary issued a legislative proposal on amending laws affecting the financial intermediation system, which will harmonise legislation that transpose various EU directives into domestic law. The following news brief highlights three of the most important topics in the proposal.
New regulation on corporate bonds
According to the proposed amendment, Section 5 of Act CXX of 2001 on the Capital Market will be supplemented with a definition of “corporate bond,” which has not previously appeared as a statutory definition.
A corporate bond is defined as a dematerialised bond issued by an economic entity (and the branch office of a foreign economic entity) that does not qualify as a credit institution, financial institution, investment firm or manager of a collective investment scheme.
Bonds are often secured by suretyship or guaranty and where a bond is structured in this way, this structure must be indicated in the bond. In these cases, the suretyship and the guaranty may be enforced directly by the holder of the bond from time to time. Amendments to corporate bonds may be decided by the bondholders’ meeting. The bondholder may seek a short deadline, which is an expedited judicial review to enforce the rights set out in the bond.
Rules on the cross‑border provision of services in Hungary
The amendment to the Act on Credit Institutions and Financial Enterprises (Hpt.) expressly recognises and permits the cross‑border provision of services by way of reverse solicitation. The amendment also contains an anti‑circumvention clause that excludes reliance on indirect solicitation.
It provides that an approach to a client or partner will not be considered to be on the client’s “own exclusive initiative” if the foreign undertaking approaches the client through any organisation acting in its own name, an organisation closely related to it, or any other person representing such an undertaking. The amendment introduces mandatory Class 1 or Class 2 categorisation for third‑country branches and an EU‑group‑level systemic assessment with a threshold of EUR 40 billion, together with targeted MNB/Supervisory tools.
Acquisition of a qualifying holding by a credit institution in another undertaking
The amendment to Section 100 of the Credit Institutions Act (Hpt.) introduces a prior prudential notification and supervisory assessment procedure for acquisitions and disposals of qualifying holdings by credit institutions, financial holding companies and mixed financial holding companies.
The notification must be submitted in advance and in writing, and if the Supervisory Authority raises no objection within the assessment period (i.e. 60 business days), the acquisition will be considered to be approved. An acquisition is deemed to be qualifying if the interest to be acquired reaches at least 15% of the acquirer’s eligible capital.
If the acquirer is a credit institution, the threshold must be assessed both on a solo basis and at the level of the group on a consolidated basis. If the acquirer, however, is a financial holding company or a mixed financial holding company, the threshold applies on a consolidated group basis.
If intending to dispose of a qualifying holding, the credit institution, financial holding company or mixed financial holding company must notify the Supervisory Authority in advance of the intended disposal, indicating the size of the interest concerned.
For more information on these proposed amendments, contact your CMS client partner or the CMS experts who wrote this article.
