Disclosure requirements – Hungary


Disclosure Category: 1

The National Bank of Hungary as supervisor and the share issuing companies are entitled, under Hungarian law, to obtain information about the identity of beneficial owners of Hungarian equities (that is, shares of Hungarian public limited companies, referred hereinafter as the "Securities").


Clients holding Hungarian Securities consent and are hereby deemed to consent to disclosure and to the appointment of the requestor as their attorney-in-fact, under power of attorney to collect from Clearstream Banking such information as is required to be disclosed. Clients who do not want to grant such authority to Clearstream Banking should refrain from holding such Securities in their account with Clearstream Banking.

Disclosure requirements

Investors must disclose both their direct and indirect holdings in a publicly traded company within two calendar days of acquisition to the Central Bank of Hungary and to the issuer in case such holding reaches 5%. The act allows issuers to define in their charter a limit of 2%.

The disclosure requirement applies to each additional 5% increase of holding up to a holding of 90% above which an increase of each 1% must be reported. The same requirements are in place in case of decrease in ownership.

Foreign ownership restrictions

Act LVII of 2018 on the control of foreign investments that pose a risk to Hungary’s national security stipulates that foreign investors must declare their acquisitions to the relevant minister and receive necessary approval if they are acquiring a 10% or bigger stake in public companies, a 25% or bigger stake in non-public companies, or any influencing stake as defined by the Civil Code in companies registered in Hungary with activities in certain industries considered sensitive to national security.

Foreign investors for the purposes of Act LVII are considered as those from outside the European Union (EU), European Economic Area (EEA) and the Swiss Confederation.

Background and legal basis

The amended Act CXX of 2001 on the Capital Markets (the “Act”), Section 153 entitles the National Bank of Hungary acting as the Supervisory Authority (NBH) and the issuing company to obtain information about the beneficial owners of Securities. Clients holding the Securities in Clearstream Banking must, upon request, provide Clearstream Banking with information about the beneficial ownership of such holdings. Clearstream Banking might be required to disclose such information to the Hungarian authorities or to the issuing company.

It is the Clearstream Banking client’s responsibility to ensure compliance with local disclosure requirements. If a requirement is not met, it is the client who will be liable to any related penalty.

Directive (EU) 2017/828 of 17 May 2017 amending Directive 2007/36/EC with regard to the encouragement of long-term shareholder engagement (the second shareholder’s rights directive “SRD II”) has been transposed into Law LXVII of 2019 on Encouraging Long-Term Shareholder Engagement on 9 July 2019 (SDR II Law).

Beneficial owner reporting

There is no requirement for a regular reporting of the beneficial owner. In case of nominee accounts the Capital Market Act stipulates that the issuer company, as well as the Central Bank of Hungary (as the financial supervisory authorities) may at any time request the breakdown of the underlying beneficial owners. If the nominee fails to provide the above information/documents, the shareholder’s voting rights may not be exercised.

In addition, some issuers require beneficial owner information and/or POA from the beneficial owner to allow participation in general meetings (personally or via proxy).


In the event of non-compliance with the obligation of notification and disclosure, the person involved may not exercise voting rights in the company in question until the notification is submitted.

A fine may also be imposed, the amount of which shall be determined according to the gravity of non-compliance with the requirements laid down in the Act and in other specific legislation and or to the extent of negligence and the financial advantage received.

According to the Act on the National Bank of Hungary (Act CXXXIX of 2013), the imposed fine for any violation of the regulations on the acquisition of a major holding in a public limited company can be in a wide range from HUF 100,000 to HUF 2 billion. The Act CXXXIX of 2013 stipulates that the exact fine would be maximised to either 10%  of the yearly gross income of the legal person violating the law ("breaching person" or "breaching company") or if the yearly gross income of such legal person cannot be stipulated, the amount of the fine would be twice the amount of the gain (or avoided loss), that the breaching company gained from the relevant transaction.

Shareholder identification as set out in the SRD II Law

The SRD II Law provides for the right for issuers to identify their shareholders.

Issuers can request intermediaries at each level of a custody chain to promptly provide relevant information to facilitate such identification.

In accordance with the SDR II Law as amended, an intermediary (in this case, Clearstream Banking) shall, upon receipt of the shareholder identification disclosure request, transmit a similar request to the next intermediaries in the custody chain (that is, Clearstream Banking clients with holdings in the requested securities). A response to the shareholder identification disclosure request shall be sent by every intermediary in the custody chain directly to the recipient's address defined in the request and without delay. Clearstream Banking will generate the response as required, with information regarding shareholder's identity, limited to Clearstream Banking books only.