to the point: financial regulation | 1/2026

• The European Supervisory Authorities have issued their Joint Guidelines on ESG stress testing, establishing a common EU framework for how banking and insurance supervisors are expected to integrate environmental, social and governance risks into supervisory stress tests, with indirect but significant implications for obliged entities and persons. Although the Guidelines are formally addressed to national competent authorities and do not introduce a new obligation to conduct ESG-specific supervisory stress tests, they signal that ESG risks are now expected to be systematically embedded in supervisory methodologies and assessments. For obliged entities such as banks, investment firms and insurance undertakings, this means increased supervisory focus on the quality of their internal ESG risk identification, data, governance arrangements and scenario analysis, as these elements are likely to be scrutinised and used as inputs in supervisory stress testing exercises. Entities should therefore expect supervisors to assess how ESG risks are integrated into existing risk management frameworks, capital planning and long-term resilience analyses, even where no standalone ESG stress test is required. As national authorities will apply the Guidelines on a "comply or explain" basis from 2026, obliged entities should prepare for more consistent and structured supervisory questioning on ESG risks and stress-testing capabilities as part of ongoing prudential supervision.

• The European Central Bank (ECB) has published a decision paving the way for the acceptance of distributed ledger technology (DLT)-based assets as eligible collateral in Eurosystem credit operations, with direct implications for credit institutions that participate in Eurosystem monetary policy operations. From 30 March 2026, banks will be able to use marketable assets issued in central securities depositories using DLT as collateral, provided these assets meet existing Eurosystem eligibility criteria, including compliance with the CSDR and settlement through eligible systems connected to TARGET2-Securities. For obliged entities, this does not change core collateral rules or risk management requirements, but it expands the range of assets that can be mobilised, requiring institutions to ensure that their internal collateral management, legal documentation and operational processes can accommodate DLT-based instruments on the same basis as traditional securities. The ECB is also signalling closer supervisory and operational scrutiny of how such assets meet standards of safety, adequacy and efficiency, while maintaining a level playing field. In addition, the announcement indicates that banks should prepare for a gradual future expansion of eligible collateral to assets issued and settled entirely on DLT, subject to further legal and regulatory developments. Institutions active in digital asset issuance or use will therefore need to closely monitor evolving eligibility criteria and ensure ongoing compliance with both monetary policy and broader EU financial regulation.

•      The European Securities and Markets Authority (ESMA) has published its Third report on the cross-border marketing of investment funds, confirming that, since 2023, there have been no material changes to national marketing rules, meaning that obliged entities and persons such as fund managers, management companies and distributors are not facing new substantive compliance requirements in this area, but are expected to continue applying existing national and EU-level rules consistently. What is new and relevant in practice is ESMA's enhanced transparency and supervisory oversight through the publication of statistics on cross-border marketing notifications, based on data reported by national competent authorities to ESMA. For obliged entities, this highlights the growing importance of accurate, timely and complete notification of cross-border marketing activities, as these data are now centrally collected, analysed and visible at EU level, reinforcing supervisory scrutiny. The statistics also underline market realities that may influence supervisory focus, notably the dominant role of Luxembourg and Ireland as home jurisdictions and the significant share of notifications for both UCITS and AIF. While the report itself does not impose new obligations, it signals ongoing regulatory attention to cross-border fund distribution and indicates that obliged entities should expect continued monitoring of their marketing practices and notification processes by national authorities and ESMA, with the findings informing discussions at the European Parliament, the Council and the European Commission.

• The European Banking Authority (EBA) has published its updated Final report on amending RTS on resolution plans and resolution colleges, clarifying and streamlining how resolution planning is to be carried out across the EU and what this means in practice for obliged entities and persons, particularly banks and cross-border banking groups. While the revised standards do not introduce new resolution obligations for institutions subject to resolution planning, they reshape supervisory expectations by requiring resolution plans to be more concise, proportionate and clearly focused on information that is essential for effective resolution. Obliged entities should expect resolution authorities to request more targeted and institution-specific data, with less emphasis on extensive narrative content and a clearer distinction between the choice of resolution strategy and the assessment of whether the institution is resolvable. The reorganisation of resolvability assessments into seven core dimensions also signals a more structured and comparable EU-wide approach, meaning that institutions will be assessed against more consistent criteria and may face closer scrutiny of any identified impediments to resolvability. At the same time, the updated rules on resolution colleges are intended to reduce the administrative burden for institutions operating cross-border, while strengthening cooperation and coordination among authorities, which in practice may lead to more efficient information requests but also more aligned supervisory actions.

• The EBA has published its final Draft RTS on booking arrangements for third-country branches under the Capital Requirements Directive, providing third-country banks operating in the EU with clear and harmonised rules on how to record and maintain assets and liabilities booked in the Member State. The new standards require branches to apply a consistent bookkeeping methodology, maintain a registry book with minimum required content, and include relevant risk-related information to support effective risk management and supervisory oversight. For obliged entities, this means ensuring that their internal systems, reporting processes and governance frameworks are fully aligned with the EU's harmonised expectations, enabling supervisors to access accurate and complete records of all booked or originated positions. By specifying detailed standards for both accounting and risk data, the RTS increase transparency and comparability across the EU, reduce the scope for divergent national practices, and reinforce supervisory scrutiny of third-country branches, making compliance with these rules a critical component of ongoing prudential and operational responsibilities.

• The EBA has published its Report on prudential consolidation and Final Report on Guidelines on ancillary services undertakings (ASU), providing banks and financial groups with clarified and harmonised rules for determining the scope of consolidation and identifying ancillary activities. For obliged entities, the report and guidelines mean they must ensure that their internal structures, accounting practices and control assessments align with a more consistent EU-wide approach, including simplified sub-consolidation requirements, clearer definitions of control, and guidance on incorporating insurance or other financial entities under prudential consolidation. The ASU Guidelines specifically require institutions to carefully identify activities considered direct extensions, ancillary to banking, or similar, including digital or fintech-related services, as this classification directly affects whether an undertaking falls within the prudential consolidation perimeter and is subject to capital and reporting requirements.

• The EBA has published its final Draft RTS on cooperation and colleges of supervisors for third-country branches to strengthen supervisory cooperation and the functioning of colleges for third-country branches, clarifying the expectations for third-country banks operating in the EU. Under the new rules, these entities they will be subject to a more structured and coordinated supervisory framework, where competent authorities are expected to exchange information systematically and, for class 1 branches, coordinate through formally organised colleges both in normal and emergency situations. Even branches not covered by a college will be affected, as authorities are required to cooperate and share relevant information to supervise ongoing operations and manage potential crises. In practice, this increases the importance for third-country branches to maintain transparent and accurate reporting, ensure prompt responsiveness to supervisory requests, and have robust governance and risk management arrangements in place, as supervisory oversight will be more harmonised, consistent and focused on both prudential soundness and operational continuity across jurisdictions.

• The Government of the Czech Republic has submitted a Draft Act amending the Capital Market Undertakings Act and other related regulations to align the Czech legal framework with new European rules and better address the needs of the domestic capital market. The primary objective of the Act is to facilitate access to capital for small and medium-sized enterprises, reduce the administrative and regulatory burden on issuers, and maintain a high level of investor protection. A key part of the proposal is the implementation of the Listing Act package (Regulation (EU) 2024/2809, Directive (EU) 2024/2810 and Directive (EU) 2024/2811), which specifically raises the threshold for the obligation to prepare a prospectus from EUR 1m to EUR 5m, allows the operation of an SME growth market as a segment of a multilateral trading facility, relaxes the rules for investment research, including its financing by the issuer, reduces the minimum free float requirement from 25 % to 10 %, and introduces the possibility of admitting shares with multiple voting rights to trading. The proposal also transposes EMIR 3, which introduces new requirements for concentration risk management vis-à-vis third-country central counterparties and technically refines the transposition of the IFD based on comments from the European Commission without any material impact on market participants. At the same time, it removes redundant national obligations constituting so-called gold-plating, introduces a clear warning requirement for bond offerings to prevent investors from being misled about the role of the Czech National Bank, and adapts Czech law to the new ESG rating regulation, including designating the Czech National Bank as the supervisory authority and adjusting the enforceability of ESMA decisions.

European Commission launches infringement procedure against Hungary over crypto-asset validation rules

• The European Commission has launched an infringement procedure against Hungary [INFR(2025)2174] following the 2025 amendment of its national crypto-asset legislation, arguing that the newly introduced crypto-transaction validation regime goes beyond the requirements of the EU's Markets in Crypto-Assets Regulation (MiCA). The amended rules require all crypto exchange transactions to be certified by a separately authorised validation service provider, subject to a strict licensing framework that, for a prolonged period, left no authorised providers on the market. As a result, several crypto-asset services became legally uncertain or effectively inoperable in Hungary.
  
  According to the Commission, the introduction of a MiCA-unknown authorisation regime, coupled with criminal liability, undermines legal certainty and the functioning of the EU single market, and has led some crypto-asset service providers to suspend or discontinue services to the detriment of clients. While Hungary's objective of strengthening AML/CFT controls is acknowledged, the Commission maintains that such measures must remain compatible with MiCA's harmonised framework. Hungary has two months to respond to the Commission's concerns, failing which the procedure may advance to a reasoned opinion and, ultimately, referral to the Court of Justice of the European Union.

Hungarian National Bank extends green preferential capital requirement programme

• The Hungarian National Bank (MNB) has extended its green preferential capital requirement programme for credit institutions by one year until the end of December 2027, while also expanding the scope of the programme. This initiative aims to broaden the range of sustainable financial products available to clients, reduce banks' climate change risk, and decrease domestic carbon emissions. The volume of green loans and bonds included in the programme exceeded HUF 1,500bln (approx. EUR 3.95bln) in 2025.
  
  The decision by the MNB's Financial Stability Council to extend the green capital requirement relief programme means that transactions disbursed by 31 December 2027 (instead of the end of 2026) will be eligible for capital requirement relief.
  
  Credit institutions with a registered office in Hungary and their subsidiary banks can use the discounts under the programme, as can the subsidiaries of financial enterprises providing financial leasing services. The programme provides capital requirement relief in respect of environmentally sustainable retail, corporate and municipal exposures (loans, bonds) that meet detailed conditions, thereby reducing banks' climate change risk and domestic carbon emissions while ensuring adequate capital levels are maintained.
  
  Furthermore, the central bank has broadened the scope of the modernisation measures under the green housing preferential capital requirement (ZLT), which now also include energy efficiency measures for residential buildings that can be implemented under the Energy Efficiency Obligation Scheme Catalogue.
  
  The MNB has also expanded the corporate and municipal preferential capital requirement programme (ZVT) by (i) defining new green loan purposes (such as agricultural irrigation development, railway transport development and activities supporting the transition to a circular economy), (ii) incorporating new types of financing instruments (sustainability-linked loans and bonds), and (iii) allowing energy communities to qualify for green financing under the programme.
  
  Through these programmes, the central bank intends to improve the banking sector's environmental risk profile and encourage green lending through positive incentives by waiving part or all of the annual capital requirement for environmentally sustainable retail, corporate and municipal exposures (loans and bonds) that meet the detailed conditions.
  
  The total volume of credit institution exposures covered by the MNB's green capital requirement programme amounted to HUF 1,532bln (approx. EUR 4bln) at the end of the third quarter last year, of which HUF 1,144bln (approx. EUR 3bln) were corporate loans, HUF 118bln (approx. EUR 300m) were corporate bonds, and HUF 271bln (approx. EUR 700m) were housing loans.
  
  The updated information notices on green preferential capital requirements are available on the MNB's website at: Green preferential capital requirement programme.