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Hungary needs tighter checks on brokerages -lawmaker
March 12, 2015 / 8:32 AM / 3 years ago

Hungary needs tighter checks on brokerages -lawmaker

BUDAPEST, March 12 (Reuters) - Hungary’s parliament could discuss new rules to tighten checks on brokerages as soon as next month after recent trouble involving three investment companies, a senior ruling Fidesz party lawmaker said.

On Tuesday the National Bank of Hungary suspended the licence of brokerage Quaestor citing regulatory shortcomings and bonds issued in excess of a permitted limit, making it the third local brokerage to face regulatory action within weeks.

Losses at one brokerage, Buda-Cash, topped 100 billion forints ($350.82 million), forcing the National Deposit Insurance Fund OBA to secure a loan from the central bank to reimburse depositors.

“We need to equip the supervisor with tougher tools, such as more frequent checks, consumer protection measures and information technology audits,” Fidesz parliamentary group leader Antal Rogan told business daily Napi Gazdasag.

He said supervisors should be installed at investment companies on a sustained basis to oversee their operations.

Fidesz aims to make owners and management of brokerages financially liable for any wrongdoings, Rogan said.

“We expect the central bank to perform an audit as thorough as possible of the entire investment sector without exceptions,” he was quoted as saying.

Lawmakers could discuss any related amendments in early April, he said.

Rogan said state development bank MFB may not be able to entirely recover a 17 billion forint loan given to brokerage Quaestor under a previous government, which filed for bankruptcy protection this week.

$1 = 285.05 forints Reporting by Gergely Szakacs; editing by Jason Neely

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