to the point: financial regulation | 10/2025

·    The European Commission has adopted new measures under the Savings and Investments Union (SIU) strategy bringing significant implications for obliged entities, particularly insurers and banks, by reshaping how they can allocate capital and manage prudential requirements. For insurers, the amendments to the Solvency II Delegated Regulation expand their capacity to invest in long-term and equity assets by introducing preferential treatment for investments that support EU strategic priorities such as the green and digital transitions, as well as defence and security projects. This means that insurers will face reduced capital charges when investing in qualifying long-term equity or in projects backed by public guarantees or subsidies, thereby encouraging more active participation in financing the real economy. The new framework also simplifies administrative and reporting obligations, introduces greater proportionality for smaller or less complex insurers, and removes unnecessary prudential costs for investments in securitisation, all of which lower compliance burdens and free up capital for productive investment. For banks, the Commission's guidance on legislative programmes under the Capital Requirements Regulation (CRR) clarifies when they can apply more favourable prudential treatment to equity exposures made through publicly backed investment schemes. Banks investing under such programmes, those involving public guarantees, co-investment mechanisms or oversight under EU or national law, will be allowed to apply lower capital charges, reflecting reduced risk levels. This creates new opportunities for banks to channel funding into sectors vital to Europe's competitiveness, including clean technology, digital innovation and defence. Both banks and insurers will thus need to adapt their internal policies, capital allocation strategies and risk management frameworks to take advantage of these incentives while maintaining compliance with the updated supervisory expectations.

·    ESMA has published draft Regulatory Technical Standards (RTS) establishing the regulatory framework for open-ended loan-originating alternative investment funds (OE LO AIFs), setting out detailed operational and risk management requirements for fund managers. For obliged entities, namely alternative investment fund managers (AIFMs) managing such funds, the new rules introduce stricter obligations on liquidity management, asset composition and redemption practices to ensure that open-ended structures remain viable and resilient. AIFMs will be required to maintain robust liquidity management systems, ensure sufficient liquid assets are available to meet investor redemptions, and conduct regular stress testing to assess the fund's ability to withstand adverse market conditions. They will also need to design redemption policies aligned with the specific liquidity profile of each OE LO AIF and consider a defined set of factors prescribed by ESMA when determining how redemptions are managed. In practical terms, these requirements will demand enhanced internal governance, more sophisticated risk assessment processes, and careful matching between the fund's loan-origination activities and its liquidity commitments to investors. Although the RTS still await adoption by the European Commission and are not expected to take effect before October 2027, they signal a tightening of supervisory expectations that will require AIFMs to prepare well in advance for the operational and compliance implications of managing open-ended loan-originating funds under the new regime.

·    ESMA has published or updated the following Q&As:

• EMIR: Notification of Errors and Omissions related to exchange-traded derivatives involving multiple Entities Responsible for Reporting ("ERRs") managed by the same Management Company/AIFM (2660); and
• MiCA: (i) How to distinguish between different execution services (2653), (ii) Offerors and CASPs' responsibilities with regards to white papers for Title II tokens admitted to trading prior to 30 December 2024 (2654)

·    ESMA has proposed major amendments to the Regulatory Technical Standards (RTS) on Settlement Discipline, introducing new obligations for central securities depositories (CSDs), financial intermediaries and other market participants as part of the EU's transition to a T+1 settlement cycle by October 2027. For obliged entities, the new rules will require significant operational and technological adjustments to ensure same-day trade allocation and the timely submission of settlement instructions, moving the industry toward near-real-time processing. Firms will have to adopt machine-readable formats for trade allocations and confirmations, implement mandatory functionalities such as hold and release mechanisms, auto-partial settlement and auto-collateralisation, and comply with enhanced monitoring and reporting requirements for settlement fails. While the reforms aim to streamline processes and reduce settlement risk, they also demand early strategic planning and system upgrades from all affected entities to achieve compliance within the phased implementation period starting in December 2026. In practice, the new standards will compel CSDs and intermediaries to modernise their post-trade infrastructures, improve data automation and align operational workflows with tighter settlement timelines, ensuring readiness for the T+1 regime and a more efficient, resilient EU securities market.

·    ESMA has issued its final Regulatory Technical Standards (RTS) under EMIR 3 (here and here), introducing clearer and more efficient procedures for central counterparties (CCPs) seeking authorisations, extensions of authorisation, or validations of model changes. For CCPs and other obliged entities, the new rules mean stricter but more transparent procedural and documentation requirements, combined with a streamlined supervisory process designed to reduce administrative delays. The RTS set out in detail what information and supporting documents must be submitted when applying for initial authorisation, extending existing authorisations or requesting validation of modifications to risk models and parameters. The clarified procedural standards also allow CCPs to plan regulatory interactions more efficiently and implement changes, such as model updates, faster, provided they comply with the new documentation and disclosure obligations.

·    The European Banking Authority has published its final draft Regulatory Technical Standards (RTS) defining how institutions must assess the materiality of credit valuation adjustment (CVA) risk exposures arising from fair-valued securities financing transactions (SFTs). For banks and investment firms subject to the Capital Requirements Regulation (CRR),  the new rules introduce a clear, quantitative framework for determining whether such SFT-related CVA exposures are material and therefore subject to own funds requirements. Institutions will now be required to apply a ratio-based assessment measuring the relative increase in CVA capital requirements that would result from including these transactions within the CVA scope. If this ratio exceeds the prescribed materiality threshold, the SFTs cannot be exempted from capital charges for CVA risk. Moreover, banks must conduct this assessment quarterly, aligning it with their regular capital calculation and reporting cycles, which adds an ongoing supervisory compliance obligation. In practice, the RTS will require institutions to enhance their internal CVA risk monitoring systems, integrate new quantitative analytics into their capital management processes, and ensure consistent documentation and reporting to supervisory authorities.

·    The European Commission has informed the public that from now on, all Payment Services Providers (PSPs) must not only ensure that their clients can receive instant euro payments (mandatory since January 2025), but also offer the ability to send them, as the transactions must be completed within seconds, 24 hours a day, every day of the year, regardless of weekends or holidays. These providers are also required to implement mandatory payee verification (Verification of Payee, VoP), confirming that the recipient's name matches the provided IBAN before a transfer is made, thereby reducing fraud and misdirected payments. The VoP service must be offered free of charge to users. Furthermore, PSPs are prohibited from charging more for instant payments than for standard credit transfers, which will force many institutions to adjust their pricing models and infrastructure to remain compliant. The new regulation also opens access to payment systems for payment and e-money institutions, allowing them to participate directly and process payments more efficiently. For obliged entities, these changes mean substantial technical and operational adjustments to ensure real-time processing, fraud prevention, and compliance with transparency and pricing obligations. The framework will extend further from January 2027, when PSPs outside the euro area will also have to provide instant euro payment capabilities and verification services, marking a full transition toward a faster, safer and more integrated European payment environment.

·    The Czech government has approved a Draft Act (in Czech only) implementing EU Directive 2023/2673 on distance contracts for financial services (DMFS Directive), introducing significant changes for obliged entities and persons providing financial services remotely via phone, internet or other electronic means. The new rules expand providers' pre-contractual information duties, requiring them to present all key terms and conditions in a clear and comprehensible way. They must also ensure consumers can easily exercise their right to withdraw from a contract, including through the introduction of a mandatory online "withdrawal button" for all digital consumer contracts. Importantly, the directive establishes that in areas already governed by specific sectoral regulations, those regulations will take precedence over the DMFS rules and the Civil Code, eliminating overlaps and clarifying legal obligations. Furthermore, financial institutions must adapt their online interfaces to comply with new prohibitions on manipulative "dark patterns", ensuring that websites and apps are transparent, non-deceptive and do not pressure users into disadvantageous decisions. In essence, obliged entities will face stricter information, transparency and design requirements, along with clearer boundaries between general and sectoral regulatory frameworks, all taking effect from 19 June 2026.

·    The Draft Act (in Czech only) amending Act No. 240/2013 Coll., on investment companies and investment funds (in Czech only) introduces substantial changes for obliged entities in the investment sector, as it transposes Directive (EU) 2024/927, which updates the AIFMD and UCITS Directives. For investment fund managers and other obliged entities, the new rules mean stricter and more structured obligations regarding liquidity risk management, delegation, reporting and the scope of permitted activities. Managers of open-ended funds will now be required to implement at least two liquidity management tools from a prescribed list and tailor them to their fund's investment strategy and asset liquidity. The rules on delegation are extended to cover more outsourced activities, introducing new information and reporting duties to the Czech National Bank (CNB) both during licensing and throughout ongoing operations. The amendment also allows, under CNB approval, the appointment of depositaries from other EU countries without a Czech branch in cases where domestic options are insufficient, though only for special and qualified investor funds. Furthermore, the reform expands the range of activities investment companies and self-managed funds may perform, including managing securitisation vehicles, non-performing loans, and acting as benchmark administrators. Managers of funds engaged in acquiring receivables from fund loans will face new internal management and control system requirements.

·       The Council of Ministers approved a bill establishing the Central Register of Contracts for public finance sector entities to increase transparency by publishing key contract data rather than full contract texts.​ The rollout will take place in stages: central government from 1 January 2027, local governments from 1 July 2027, and all remaining entities from 1 January 2028, with the publication threshold increased from PLN 500 to PLN 10,000.

·    The Ministry of Funds and Regional Policy has issued a regulation specifying the detailed procedure for the payment of compensation and the granting of targeted subsidies and loans from the fund. The act standardises the procedural and documentation paths for beneficiaries and implementing institutions, increasing the predictability of settlements in projects financed from public or EU funds.

·    On 27 October 2025, the President of the Supervisory Authority for Regulated Activities (SZTFH) issued Decree No. 10/2025 (X.27.) on the detailed rules for the authorisation and registration of crypto-asset conversion validation service providers. The new decree supplements the Crypto Act (Act VII of 2024), which was recently amended to introduce the obligation to use a validation service provider for crypto-asset exchanges. The SZTFH decree now clarifies the specific criteria and expectations that authorised providers must meet. It sets out the organisational, financial and technical requirements that such service providers must meet, aiming to enhance the transparency and integrity of the crypto-asset market and to reduce money laundering and terrorist financing risks. Under the decree, crypto-asset conversion activities do not require validation if performed for private purposes, intermittently or through decentralised, smart contract–based mechanisms. However, entities providing validation services for consideration must obtain prior authorisation from the SZTFH through an electronic procedure. To qualify, providers must be legal entities with a minimum registered capital of HUF 80m, employ at least two qualified professionals in law, IT or economics, and maintain certified information security systems. They must also hold professional liability insurance, establish internal policies (including on conflict of interest, AML, complaints handling and business continuity), and possess a simplified site security certificate. The SZTFH will maintain a public register of authorised validation service providers, including information on valid licences and imposed sanctions. Providers are required to continuously comply with the prescribed criteria and notify the SZTFH of any material changes within eight days. The decree will enter into force on 30 October 2025, marking another important step in the implementation of Hungary's national framework aligned with the EU MiCA Regulation.

·    The Ministry for National Economy has issued a proposal to amend laws affecting the financial intermediary system. The initiative is driven by two main factors: the mandatory transposition of recent European Union directives into national law and the need to adapt the domestic regulatory framework to the evolving financial sector and practical experiences.

Key amendments under EU Directive 2024/927: A central reform within the investment fund sector is the authorisation for Alternative Investment Funds (AIFs) to engage in direct lending. To mitigate related risks, these funds will be subject to strict operational, investment and leverage requirements. Crucially, from a consumer protection standpoint, Hungarian law will explicitly prohibit these funds from granting loans to consumers falling under the scope of the act on consumer credit. In line with the directive, the proposal also strengthens liquidity risk management frameworks for investment funds. Beyond existing tools, such as the suspension of unit redemptions, the legislation introduces a harmonised list of additional liquidity management instruments. Fund managers will be permitted to select from this pre-defined list, subject to specific conditions. Additionally, the existing regulations concerning depositary services, outsourcing arrangements and supervisory reporting are supplemented and refined to ensure greater operational resilience and transparency.

Data transmission obligations: The draft law includes provisions to implement EU Directive 2023/2864 establishing the European Single Access Point (ESAP). The primary objective of the ESAP is to centralise and facilitate access to essential information concerning financial services, capital markets and sustainability. The harmonisation process will be implemented in phases, with this proposal imposing data transmission obligations to the ESAP on various key financial acts (Act CXXXVIII of 2007, Act CXXXIX of 2013).

Modernisation of consumer credit regulations: The proposal ensures the transposition of EU Directive 2023/2225, which repeals and replaces the 2008 directive. It addresses market developments since 2008, including increased digitalisation, the emergence of new products and providers, and shifting consumer preferences. New provisions introduced include an explicit ban on discrimination and unsolicited lending, as well as requirements for debt advisory services.

Amendment of Act CXX of 2001 on the capital market: This legislative proposal establishes the bondholders' meeting as the competent body to resolve on the amendment of corporate bonds, outlining specific decision-making procedures including both physical and electronic participation. It introduces a streamlined process for modifying certain administrative bond data without a bondholders' meeting, executed directly by the central depository upon the issuer's request. Furthermore, the draft legislation details a comprehensive and expedited judicial review process for bondholders to challenge resolutions.

·    On 31 October 2025, Hungary promulgated Act LXXII of 2025 on the Multilateral Competent Authority Agreement under the OECD's Crypto-Asset Reporting Framework (CARF). The act brings Hungary in line with the OECD's global standard for the automatic exchange of tax-relevant information on crypto-asset transactions.

Under the new regime, crypto-asset service providers – including exchanges, wallet operators and other intermediaries – will be required to collect, verify and report customer and transaction data to the Hungarian tax authority, which will automatically share it with foreign counterparts. Reportable information includes client identification data, transaction values and crypto-to-fiat or crypto-to-crypto conversions. The CARF complements the existing CRS framework but extends it to digital assets and decentralised platforms. The new obligations will require crypto-asset service providers to enhance their KYC, AML and data reporting systems to ensure compliance. The act represents a major expansion of Hungary's tax transparency framework, integrating crypto-assets into the international automatic exchange of information system.

The Act entered into force on 1 November 2025, except for Sections 2–4 and Annexes 2–3, which will become effective once the CARF Agreement enters into force between Hungary and at least one other signatory jurisdiction. The Minister for Foreign Affairs will announce the effective date in the Hungarian Official Gazette (Magyar Közlöny).

·    On 31 October 2025, Hungary promulgated Act LXXIV of 2025 on the promulgation of the amendment to the Multilateral Competent Authority Agreement concerning the automatic exchange of financial account information under the OECD's Common Reporting Standard (CRS). The Act implements into Hungarian law the 2023 OECD updates to the CRS framework, thereby ensuring consistency between the reporting of traditional financial accounts and the new crypto-asset reporting regime under the CARF. The amendments refine and expand the scope of the CRS to close information gaps identified during its application. Key updates include the clarification of financial institutions' due diligence and reporting obligations, the extension of the definition of "financial account", and enhanced coordination between CRS and CARF reporting requirements. These revisions are designed to strengthen global tax transparency and align the financial sector's reporting standards with the rapidly evolving digital asset landscape. The Act also introduces technical and procedural adjustments to ensure that Hungarian reporting financial institutions – including banks, investment firms and certain insurance companies – adapt their customer due diligence, data collection and reporting procedures in line with the updated CRS rules.

While the Act entered into force on 1 November 2025, certain provisions related to the implementation of the amended Agreement will take effect only once the amendments enter into force between Hungary and at least one other participating jurisdiction. The exact date will be announced by the Minister of Foreign Affairs in the Official Gazette.