Hungary’s national bank issues three recommendations on STS securitisation

On 29 July 2026, the Hungarian National Bank (MNB) published three new recommendations setting out its supervisory expectations for simple, transparent and standardised (STS) securitisations under the EU Securitisation Regulation (Regulation (EU) 2017/2402). 

The recommendations cover ABCP securitisations (Recommendation No. 8/2026 VII.29), non-ABCP securitisations (Recommendation No. 9/2026 VII.29), and – for the first time in Hungary – on-balance-sheet (i.e. synthetic) securitisations (Recommendation No. 10/2026 VII.29). All three take effect on 1 September 2026.

While the EU Securitisation Regulation and the EBA Guidelines provide the overarching framework, the MNB's recommendations translate a number of open-textured provisions into concrete Hungarian law specific expectations. For market participants planning or maintaining STS-labelled transactions in Hungary, these recommendations represent an important benchmark for the MNB to assess compliance.

What the recommendations add to the EU framework

The EU Securitisation Regulation deliberately leaves certain concepts to national interpretation such as insolvency remoteness, the meaning of "credit-impaired," and the expertise required of key parties. The MNB recommendations supply this local content.

Insolvency remoteness under Hungarian law: For the true-sale requirement (Articles 20 and 24 of the Regulation), the MNB clarifies that the avoidance grounds under Section 40(1) and the clawback ground under Section 40(2) of Hungary's Insolvency Act (Cstv.) do not constitute "severe clawback provisions." This is a significant clarification for deal structurers since it confirms that the standard Hungarian insolvency avoidance regime, which applies broadly to pre-insolvency dispositions, does not disqualify a transfer from STS eligibility. A legal opinion confirming the true sale and its enforceability remains mandatory though the MNB limits this requirement to the first ABCP transaction using a given transfer mechanism under the same legal system.

Defining "credit-impaired" in practice: The Regulation prohibits the inclusion of exposures to credit-impaired debtors, but the concept of a "public credit registry" varies by jurisdiction. The MNB identifies Hungary's Central Credit Information System (Központi Hitelinformációs Rendszer, or KHR) as the relevant registry. Debtors flagged on the KHR at origination, or whose presence on the register reflects factors relevant to credit-risk assessment, must be excluded from STS pools. This adds a binary and verifiable test that originators and sponsors can operationalise in their selection criteria.

Active portfolio management boundaries: Both the ABCP and non-ABCP recommendations provide a detailed positive list of permissible portfolio-management techniques that do not amount to prohibited "active portfolio management." These include substitutions to remedy breaches of representations and warranties, additions during ramp-up or revolving periods, repurchases of non-performing exposures for enforcement purposes, and repurchases in connection with clean-up calls. The guidance provides originators with greater confidence that routine portfolio maintenance will not inadvertently compromise STS status.

Expertise thresholds: The EU Regulation requires originators, sponsors and servicers to have "expertise" in similar exposures, but does not specify what this means. The MNB sets a benchmark of at least five years of relevant business activity at entity level or at least five years of individual professional experience for at least two members of the senior management body. This creates a clear, ex ante verifiable standard – one that new market entrants will need to plan around.

Reference rates: For the requirement that referenced interest payments be based on "generally used market interest rates," the MNB explicitly names BUBOR, Euribor, the MNB base rate and other central bank policy rates as qualifying reference rates. Sectoral funding-cost rates also qualify, provided investors have sufficient data to assess their relationship to market rates. This removes any ambiguity for Hungarian-law transactions referencing domestic benchmark rates.

Synthetic securitisation regime: new ground

Recommendation 10/2026 introduces MNB guidance on on-balance sheet (i.e. synthetic) STS securitisations for the first time. This implements the EBA Guidelines on the STS criteria introduced under Articles 26a–26e of the Regulation (as amended). Since synthetic securitisations keep the underlying exposures on the originator's balance sheet and transfer credit risk through credit derivatives or guarantees rather than a true sale, they raise distinct structuring questions.

The MNB provides guidance on several synthetic-specific issues, including the prohibition of multiple layers of credit protection over the same pool, the mechanics of interim and final credit-protection payments, the calculation of the synthetic excess spread that serves as first-loss credit enhancement, and collateral requirements for funded protection. For originators not using the IRB approach, the MNB permits expected-loss calculations based on accounting provisions or other internal risk parameters such as those used in the ICAAP process – a flexibility for originators that determine their own-funds requirements under the standardised approach.

Compliance, impact and next steps

The recommendations are overwhelmingly aligned with the EU Regulation rather than contradictory. They interpret open-textured provisions and implement the corresponding EBA Guidelines without replacing the underlying statutory framework. They do, however, create additional operational expectations beyond the bare text of the Regulation. The five-year expertise threshold, the mandatory legal opinion for the first transaction in a given structure, the six-month limit for "temporary" non-compliance with certain ABCP criteria and the requirement to list "exceptional circumstances" justifying cash trapping all carry the weight of the MNB's supervisory expectations.

For banks and other originators, these clarifications provide welcome legal certainty – most notably on Hungarian SPV structures and insolvency-law compatibility – but compliance costs will increase. The compressed implementation timeline (barely five weeks before the 1 September 2026 enforcement date) means existing STS programmes should be reviewed and new transactions in the pipeline should incorporate the MNB's positions from the outset. 

For more information on these recommendations and their implications for securitisation transactions in Hungary, contact your CMS client partner or the CMS experts listed below.

The article was co-authored by Máté Mondok.