Hungary's proposal on EU fund access offers greater UBO transparency and simplified procedures for AIFMs

On 9 June 2026, the Hungarian government submitted a legislative proposal on the Amendment of certain acts necessary for access to European Union funds, which drives the regulatory framework for alternative investment fund managers (AIFMs) in two directions: by amending Act LIII of 2017 on the Prevention and Combating of Money Laundering and Terrorist Financing (Hungarian AML Act), the Proposal tightens transparency and due diligence requirements relating to ultimate beneficial owners (UBOs), particularly for alternative investment funds (AIFs), including private equity and venture capital funds; second, by amending Act XVI of 2014 on Collective Investment Undertakings and Their Managers (Hungarian AIFM Act), the Proposal simplifies procedures for closed-ended AIFs.

1. Changes in AML rules – visible UBOs

Aim of the Proposal

The Proposal places particular emphasis on increasing transparency around private equity funds through two principal mechanisms:

• expansion of the UBO definition to capture all natural persons who exercise de facto control or hold blocking voting rights, thereby exerting influence over an entity, particularly close-ended AIFs; 
• introduction of enhanced due diligence rules tailored to closed-ended AIFs with complex structures, making it mandatory to identify ownership chains established through parallel funds, holding structures or multi-jurisdictional arrangements.

Expansion of the general UBO definition

The general UBO definition under the Hungarian AML Act has always encompassed natural persons who exercise actual control over an entity, irrespective of their voting rights or ownership interest. Clarifying the scope of this definition in practice, however, became necessary. The Proposal therefore specifies the categories of natural persons who qualify as UBOs by virtue of de facto management rights, blocking voting rights, or other effective influence, supplementing the existing UBO definition with the following persons:

• a natural person who holds a class of shares embodying at least one of the following preferential rights: voting preference or the right to appoint a member of the management body or the supervisory board;
• a natural person who, by virtue of their membership, is entitled to receive distributions from the entity's assets or profits amounting to at least 25%; and 
• a natural person for whom, in any of the preceding five financial years, distributions from the entity's assets or profits amounting to at least 25% in aggregate have been prescribed.

Expansion of the UBO definition for closed-ended AIFs

The UBO definition specific to closed-ended AIFs has always included natural persons who exercise actual management and control or economically equivalent influence over the fund, regardless of whether they hold fund units. The Proposal materially tightens and supplements this definition by expressly providing that the following persons must also be regarded as UBOs.

First, any natural person who, under the fund rules, whether directly or indirectly, is entitled to exercise decisive influence over the closed-ended AIF's investment policy, investment decisions, asset allocation or risk management framework. For the purposes of this rule, decisive influence includes situations where the natural person holds a vote or veto right in the AIFM's investment decision-making process or where the AIFM regularly and effectively acts on the instructions of this person pursuant to the fund rules.

Second, any natural person who, under the fund rules or any other instrument governing the operation of the AIF, holds, individually or jointly with other investors, voting rights sufficient to amend the fund rules, to transfer the fund management mandate, to initiate the termination of the fund or to block investor approvals required under the fund rules.

Third, any natural person who is otherwise capable of exercising decisive influence over the decision-making or activities of the closed-ended AIF by any other means.

Crucially, where no natural person can be identified as a UBO under the above criteria, the manager of the AIFM managing the closed-ended AIF must be deemed the UBO. 

Enhanced due diligence obligations for closed-ended AIFs

The Proposal imposes specific enhanced due diligence (EDD) obligations on financial institutions and other obliged entities servicing closed-ended AIFs. Under these obligations, the obliged entity must, in addition to standard EDD measures, obtain and review the following:

• the fund rules and the instrument of incorporation of the AIF; 
• the capital structure of the fund, including total committed capital and each investor's proportionate capital participation; and 
• the investor base of the fund.

Within the scope of EDD, the obliged entity must assess potential ownership-chain risks, including whether the fund units or other collective investment instruments are issued in bearer form and whether the underlying holders can be identified; whether any natural person qualifying as a UBO under the newly introduced rules has been omitted from the UBO register notification submitted by the reporting entity; and whether the fund employs parallel funds, investment chains, holding structures or other multi-jurisdictional arrangements that may be capable of obscuring the identity of the ultimate beneficial owner or the nature of the ownership chain.

If the obliged entity identifies high risk in the fund structure or the investor base during an enhanced due diligence, it must apply further measures, which include deeper investigation of the underlying investor chain and examination of the AIFM's internal decision-making structure and remuneration framework. The Proposal leaves the determination of the precise scope of further measures to the discretion of the obliged entity.

Strengthened role of the integrity authority

The Financial Intelligence Unit, operating under the National Tax and Customs Administration and tasked with the prevention and detection of criminal offences for money laundering and terrorist financing and assisting related investigations, will propose the initiation of proceedings falling within the competence of the Integrity Authority, the body responsible for supervising the use of EU funds. This institutional link will reinforce the connection between AML controls and the oversight of EU-funded investments.

UBO register

The Proposal introduces special reporting rules for the UBO register tailored to the specificities of closed-ended AIFs by amending Act XLIII of 2021 on the establishment and operation of the data-reporting framework related to the identification tasks of financial and other service providers. Under the new rules, service providers must first perform the relevant transmission within the new data-reporting framework for the month of September 2026.

In addition, the Proposal opens access to the UBO register to a broader group of persons, including media content providers and persons entering contractual negotiations with the relevant legal entity or legal arrangement.

2. Changes in the Hungarian AIFM Act – Simplified supervisory procedures for AIFs

To enhance the enforceability of supervisory considerations, the Proposal introduces amendments to a number of provisions of the Hungarian AIFM Act. The most significant of these are outlined below.

Registration of closed-ended AIFs

Under the Proposal, the registration of a closed-ended AIF with the National Bank of Hungary (NBH) will be conditional upon the AIFM submitting the following documentation to the NBH, in addition to the customary documents: the depositary agreement; the fund rules; evidence of subscription and payment of the initial own capital; and, in the case of real estate and mixed funds, the auditor engagement agreement. 

According to the Proposal, where fund rules are available to an AIFM when submitting its application for an AIFM licence, the fund rules must already be submitted to the NBH.

Fund rules

Amendments to the fund rules of a closed-ended AIF will no longer require prior approval by the NBH. Instead, the AIFM will be required to notify the NBH of the amended fund rules, for information purposes only, within five days of the amendment taking effect.

Merger of closed-ended AIFs

In the case of a merger of a closed-ended AIF by absorption, prior authorisation by the NBH will no longer be required, provided that the fund rules authorise the AIFM to take such decision or subject it to a majority vote of the unit holders at a specified proportion.

Qualifying holdings

Under the Proposal, prior authorisation by the NBH for the acquisition of a qualifying holding will be required only for UCITS management companies. AIFMs will be exempted from the obligation to obtain prior authorisation, reducing the regulatory burden on the alternative investment fund sector.

Compliance deadline

Under the Proposal, AIFMs will be required to comply with the amended rules by 30 September 2026.

Outlook

The Proposal, driven by the government's objective to secure access to EU funds and comply with EU rules, represents a significant step in aligning Hungary with EU standards on UBO transparency while strengthening the enforceability of supervisory considerations for closed-ended AIFs. 

AIFMs and their service providers should begin assessing the impact of the expanded UBO definitions and enhanced due-diligence obligations at an early stage, given the breadth of the proposed changes. The Proposal will enter into force on the third day following its publication in the Hungarian Official Gazette.

For more information on this Proposal, contact your CMS client partner or the CMS experts who contributed to this article.

The article was co-authored by Viktória Dorusák.