Financial Crime World

The Hungarian Framework for Fintech and Sustainable Finance

Current Regulations

The current legal framework in Hungary for the protection of consumers’ interests in the context of fintech and sustainable finance includes several key regulations:

  • Directive (EU) 2014/9 on Disclosure of Non-Financial and Diversity Information: This directive requires companies to disclose non-financial information, including environmental and social aspects, as part of their corporate governance practices.
  • Regulation (EU) 2020/852 on the Establishment of a Framework to Facilitate Sustainable Investment: This regulation establishes a framework for sustainable investment, aiming to facilitate the integration of environmental, social, and governance (ESG) factors into financial decision-making.
  • Regulation (EU) 2019/2088 on Sustainability-Related Disclosures in the Financial Services Sector (SFDR): This regulation requires financial institutions to disclose sustainability-related information about their investment advice and products, ensuring transparency and accountability.
  • The EBA’s Sustainable Finance Action Plan: This plan includes initiatives such as disseminating ESG risks according to Pillar 3 of Basel (2022) and a report on the classification and prudential treatment of assets with a sustainability perspective looking ahead to 2025.

Supervision and Awareness

The MNB supervises Hungarian-based and cross-border fintech service providers, working closely with competent foreign supervisory authorities. The MNB also raises awareness about potential infringements and fraud when using new types of financial services, promoting a safe and secure environment for consumers.

Future Developments

In response to climate change, sustainable finance, and green economy criteria, the European Commission has announced a renewed sustainable finance strategy, and the EBA has launched its Sustainable Finance Action Plan with a mandate from the European Commission to integrate the plan’s provisions into prudential regulation. This will have a significant impact on EU policy and drive national banks towards greener and more sustainable financial solutions.

The MNB provides regulations on green financial services, green bonds, and green credits, promoting environmentally responsible financial practices. The MNB also publishes recommendations after measuring the performance of the financial sector in its Green Financial Report, ensuring transparency and accountability in the pursuit of sustainability.

As the regulatory landscape continues to evolve, it is essential for fintech service providers, consumers, and policymakers to stay informed about the latest developments and adapt to the changing requirements.