are subject to prior authorisation by the Magyar Nemzeti Bank (MNB).">

Authorisation of the activity of investment fund managers

Collective portfolio management activities are subject to prior authorisation by the Magyar Nemzeti Bank (MNB).

Kulcsszavak: investment fund management, venture capital fund managers, collective portfolio management, AIF, UCITS, funds, private equity fund, securities fund, real estate fund, venture capital fund

The foundation of an investment fund manager does not require authorisation; only the activities that it intends to carry out are subject to authorisation; thus, the court of registry procedure related to the foundation of the company may be conducted even before the activity licence is issued, with the proviso that any activity of the company that is subject to authorisation must be commenced only after the activity licence has been issued. Essentially, there are two major types of investment fund managers: UCITS management companies and alternative investment fund managers (AIFMs). Within the AIFMs category, a further distinction is made between investment fund managers based on whether they manage portfolios of AIFs whose assets under management exceed the statutory limits or they subject themselves to the relevant law in its entirety.

Applications for authorisation of the activities of investment fund managers and the relevant attachments must be submitted by economic operators acting as customers or their legal representatives through the MNB’s ‘ERA’ system (Electronic System for Receiving Authenticated Data). Detailed information on e-administration and on the substantive and formal requirements of electronic documents can be found on the MNB’s website at the following link:

https://www.mnb.hu/letoltes/tajekoztatas-az-e-ugyintezesrol-az-mnb-elotti-engedelyezesi-eljarasokban-1.pdf

Engagement in collective portfolio management activities without authorisation constitutes a criminal offence, and the MNB may commence a market surveillance procedure if it suspects engagement in unauthorised collective portfolio management activities.

If the MNB finds that an activity is performed without authorisation, it will

a) prohibit the activity,

b) initiate criminal proceedings if, in its opinion, a criminal offence is involved under the Act on the Criminal Code,

c) apply measures or exceptional measures, and/or

d) impose a market surveillance fine.

If the submitted application contains insufficient information, within 45 days of receipt of the application the MNB will request that the applicant to submit supplementary information. In the case of complete applications, the MNB will make a decision within three months of receipt of the application.

A detailed guide to the authorisation of the activities of investment fund managers is available at: https://www.mnb.hu/letoltes/2-3-1-1-engedelyezesi-utmutato-befektetesi-alapkezelo-tevekenysegenek-engedelyezese.pdf  

An FAQ (frequently asked questions and answers) page on the authorisation procedure of the activities of investment fund managers can be found at the following link: https://www.mnb.hu/letoltes/2-3-1-2-eljarassal-kapcsolatos-gyakori-kerdesek-es-valaszok.pdf

Information about the policies to be attached to the application for authorising the activities of investment fund managers can be found at: https://www.mnb.hu/felugyelet/engedelyezes-es-intezmenyfelugyeles/engedelyezes/szektorok/tokepiac/befektetesi-alapkezelo/tevekenysegi-engedelyezese/szabalyzatokkal-kapcsolatos-informaciok

The authorisation procedure is subject to the payment of an administrative service fee of HUF 1,100,000.

Additional information about the fee can be accessed via the following link:

https://www.mnb.hu/letoltes/tajekoztatas-a-magyar-nemzeti-bank-altal-egyes-engedelyezesi-es-nyilvantartasba-veteli-eljarasokban-alkalmazott-igazgatasi-szolgaltatasi-dijrol.pdf

Magyar Nemzeti Bank, Money and Capital Markets Licensing Department

The MNB’s decision (resolution or ruling) may not be appealed; however, customers whose rights or legitimate interests are directly affected by the decision may initiate administrative court proceedings within 30 (thirty) days of the disclosure of the resolution or ruling on the grounds of infringement, by submitting an application initiating proceedings to the Budapest-Capital Regional Court.

Legal representation is mandatory in the court proceedings. The application must be addressed to the Budapest-Capital Regional Court, and submitted electronically through the MNB’s form submission support service.

(The form submission support service can be accessed at: https://www.mnb.hu/felugyelet/engedelyezes-es-intezmenyfelugyeles/hatarozatok-es-vegzesek-keresese)

The submission of the application has no suspensive effect on the enforceability of the resolution or ruling, but the customer may request interim relief. As a general rule, the court rules in the proceedings without holding a hearing; however, the customer may request a hearing in the application. If no hearing is requested, a hearing may not be requested later on during the appeal procedure.

An application for remedy may be lodged by any party who goes over a time limit or misses a legal deadline during the procedure for reasons beyond their control.

Additional general information about the authorisation procedure is available at: https://www.mnb.hu/felugyelet/engedelyezes-es-intezmenyfelugyeles/engedelyezes/tajekoztatok

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Act XVI of 2014 on Collective Investment Trusts and their Managers, and on the Amendment of Financial Regulations

Government Decree No 79/2014 (III. 14.)

Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012

Act CXXXIX of 2013 on the Magyar Nemzeti Bank (Central Bank of Hungary)

Decree No 14/2015 (V. 13.) MNB on the Administrative Service Fee of Certain Authorisation and Registration Procedures Performed by the Magyar Nemzeti Bank in the Framework of the Supervision of the Financial Intermediary System and with Regard to Fiduciary Asset Management Companies

MNB