COVERED BONDS

The regulations of EU covered bond framework are laid down in Directive (EU) 2019/2162 on the issue of covered bonds and covered bond public supervision and amending Directives 2009/65/EC and 2014/59/EU (Covered Bond Directive) and Regulation (EU) 575/2013 on prudential requirements for credit institutions requirements (CRR).

The Covered Bond Directive defines the concept and main structural characteristics of covered bonds, the criteria for issuance, the provisions for the use of the "European Covered Bond" label, the main tasks and responsibilities related to the supervision, as well as the disclosure requirements of the competent authorities. The relevant provisions of the CRR provide requirements related to covered bonds as exposures, also define the collateral, and capital requirements of the covered bonds.

In Hungary, only mortgage bonds (“jelzáloglevél”) are among the covered bonds, which can only be issued by mortgage loan companies in accordance with the provisions of Act XXX of 1997 on Mortgage Loan Companies and on Mortgage Bonds (Mortgage Bank Act).

The implementation of EU covered bond framework defined in the Covered Bond Directive in the domestic legislation has been successfully completed by amending the Mortgage Bank Act and the Act CXXXIX of 2013 on the National Bank of Hungary.

In this section the Central Bank of Hungary (Magyar Nemzeti Bank - MNB) will publish and provide access to information regarding the disclosure requirements required by Article 26 of Covered Bond Directive. The disclosure requirements are transposed by Section 22/B of Mortgage Bank Act.

ERSTE Mortgage Bank Private Company Limited by Shares
(headquarters: 1138 Budapest, Népfürdő utca 24-26.)

MBH Mortgage Bank Public Limited Company
(headquarters: 1171 Budapest, Magyar Tudósok körútja 9. G. ép.)

UniCredit Mortgage Bank Private Company Limited by Shares
(headquarters: 1054 Budapest, Szabadság tér 5-6.)

K&H Mortgage Bank Private Company Limited by Shares
(headquarters: 1095 Budapest, Lechner Ödön fasor 9.)

OTP Mortgage Bank Private Company Limited by Shares
(headquarters: 1138 Budapest, Váci út 135-139. D. ép.)

In July 2023, the European Commission issued a Call for Advice (CfA) on the performance and review on the EU covered bond framework. Within the context of the Covered Bond Directive, Article 31 requires the Commission to report to co-legislators on the implementation of the EU covered bond framework, and to provide related legislative proposals. In turn, the Commission seeks input and technical assistance from the European Banking Authority (EBA) on the followings: assessment of the performance of the covered bond framework, third country equivalence covered bond regime, covered bonds with extendable maturities, green covered bonds.