Recommendation 9/2026 (July 29) of the Magyar Nemzeti Bank

on requirements for simple, transparent and standardised securitisation not qualifying as ABCP

I. Purpose and Scope of the Recommendation

The purpose of this Recommendation is to formulate the expectations of the Magyar Nemzeti Bank (hereinafter: MNB) regarding the requirements for a securitisation not qualifying as an Asset-Backed Commercial Paper (ABCP) issuance program or a securitisation within such a program (hereinafter: securitisation not qualifying as ABCP) to be considered a simple, transparent and standardised securitisation, thereby increasing the predictability of legal application and facilitating the uniform application of relevant legislation.

Securitizations not qualifying as ABCP that meet the requirements for simplicity, standardization, and transparency set out in Article 20, Article 21, and Article 22 of Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 on the establishment of a general framework for securitization and creating a specific framework for simple, transparent and standardized securitization, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012 (hereinafter: Securitization Regulation) shall be considered simple, transparent and standardized (hereinafter: STS) securitizations.

The European Banking Authority (hereinafter: EBA) issued guidelines on STS criteria for securitizations not qualifying as ABCP on 12 December 2018, and on STS criteria for off-balance sheet securitizations and amending the guidelines on STS criteria for ABCP securitizations and securitizations not qualifying as ABCP on 27 May 2024 (EBA/GL/2018/09 and EBA/GL/2024/05; hereinafter together: EBA Guidelines). Based on the expectations formulated in the EBA Guidelines, this Recommendation defines the MNB's expectations regarding STS criteria for securitizations not qualifying as ABCP and the good practices to be followed by the participants in the securitization process. By publishing this Recommendation, the MNB ensures compliance with the provisions of the EBA Guidelines.

The addressees of this Recommendation are special purpose entities subject to the scope of the Act on Capital Markets No. CXX of 2001 (hereinafter: Capital Markets Act), institutional investors as defined in the Securitization Regulation (hereinafter: investors), securitization initiators, sponsors, original lenders, credit servicing providers, and third parties authorized by the MNB to verify compliance with the STS criteria under Article 28 of the Securitization Regulation.

This Recommendation does not refer comprehensively to statutory provisions when formulating principles and expectations; however, the addressees of this Recommendation remain obliged to comply with the relevant statutory requirements.

This Recommendation does not provide guidance on data processing and data protection issues, contains no expectations regarding the processing of personal data, and the requirements contained therein cannot be interpreted in any way as authorization for the processing of personal data. Data processing in connection with the fulfillment of supervisory expectations set out in this Recommendation may only be carried out in compliance with the then-current data protection legislation.

II. Interpretative Provisions

The terms used in this Recommendation shall be interpreted in accordance with the definitions set out in the Securitization Regulation and the Capital Markets Act, unless otherwise provided.

III. Criteria for Simplicity

III.1. Genuine Sale, Assignment or Transfer with Equivalent Legal Effect, Representations and Warranties

The MNB expects the following to be met in the application of Article 20(1) of the Securitization Regulation, and to establish confidence among third parties—including third parties verifying compliance with the STS criteria in accordance with Article 28 of the Securitization Regulation—in the fulfillment of the requirements set out in the Securitization Regulation:

a) a securitization involving a genuine transfer—genuine sale—or proof that, under applicable laws, an assignment or transfer with equivalent legal effect to a genuine sale separates the underlying exposures from the seller, its creditors, and liquidators, including by ensuring that in the event of the seller's insolvency, they cannot be subject to strict repurchase provisions, i.e., the contract for the sale, assignment, or transfer does not contain the provisions referred to in Article 24(2)(a) and (b) of the Securitization Regulation;

b) proof of the enforceability of the genuine sale or assignment or transfer with equivalent legal effect referred to in point (a) against the seller or any other third party under applicable national legislation; and

c) an assessment of repurchase and recharacterization risks.
For the application of point (a) of paragraph 2:

a) the grounds for challenge defined in Article 40(1) of Act XLIX of 1991 on Bankruptcy Proceedings and Liquidation Proceedings (hereinafter: Bankruptcy Act); b) the grounds for repurchase defined in Article 40(2) of the Bankruptcy Act; do not constitute strict repurchase provisions.
In the opinion of the MNB, the fulfillment of the conditions set out in paragraph 2 can only be proven through a legal opinion, except for repeat issuances in standalone securitization structures or for trust management using the same legal mechanism as the transfer, including cases where the same legal system applies to the transfer.
It is expected that the legal opinion defined in paragraph 4 be made available to all relevant third parties verifying compliance with the STS criteria under Article 28 of the Securitization Regulation, as well as to the competent authorities under Article 29 of the Securitization Regulation.
The MNB expects that, in the application of Article 20(5)(a) of the Securitization Regulation, objectively measurable credit quality thresholds related to the seller's financial situation be identified in the transaction documentation as the triggering event for "a significant deterioration in the seller's credit quality."
For the application of Article 20(5)(b) of the Securitization Regulation, the triggering event of "the seller's insolvency" shall be considered to be the cases of insolvency defined in the Bankruptcy Act.

III.2. Securitization Conditions for Underlying Exposures, Active Portfolio Management

For the application of Article 20(7) of the Securitization Regulation, the MNB considers active portfolio management to be portfolio management that:

a) makes the performance of the securitization dependent on both the performance of the underlying exposures and the performance of the portfolio management of the securitization, thereby preventing investors from modeling the credit risk of the underlying exposures without considering the portfolio manager's strategy; or b) is carried out for speculative purposes to achieve better performance, higher yield, full financial return, or other purely financial or economic benefit.
In the MNB's view, portfolio management methods that do not constitute active portfolio management include:

a) the replacement or repurchase of underlying exposures due to a breach of seller representations and warranties; b) the replacement or repurchase of underlying exposures that are the subject of a supervisory (regulatory) dispute or investigation to facilitate the resolution of the dispute or the closure of the investigation; c) the replenishment of underlying exposures during the revolving period by adding underlying exposures that replace amortized or non-performing exposures; d) the acquisition of new underlying exposures during the "ramp-up" period with the aim of aligning the value of the underlying exposures with the value of the securitization liabilities; e) the repurchase of underlying exposures in connection with the repurchase right for residual positions, in accordance with Article 244(4)(g) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012 (hereinafter: CRR); f) the repurchase of non-performing exposures to facilitate collection and liquidation proceedings for these exposures; g) the repurchase of underlying exposures based on the repurchase obligation under Article 20(13) of the Securitization Regulation.
In the MNB's opinion, for the application of Article 20(7) of the Securitization Regulation, the conditions defined therein are "clear" if the court has the ability to establish their fulfillment on both legal and factual grounds.
For the application of Article 20(7) of the Securitization Regulation, the MNB considers the fulfillment of "the conditions for the original underlying exposures" to mean securitization conditions that:

a) are no less stringent than the securitization conditions for the original underlying exposures at the time of the transaction closing for standard securitizations; b) are no less stringent than the securitization conditions for the original underlying exposures at the time of the most recent issuance for securitizations where multiple series of securities—including trust management funds—are issued, provided that the securitization conditions may differ between two closings with the agreement of the parties involved in the securitization and in accordance with the transaction documentation.
The MNB expects that, in accordance with paragraph 11, the securitization conditions for the underlying exposures—referencing the securitization conditions applicable at the exposure level—be defined in detail in the transaction documentation.

III.3. Homogeneity, Obligations Related to Underlying Exposures, Regular Payments, Prohibition of Transferable Securities

In the MNB's opinion, for the application of Article 20(8) of the Securitization Regulation, the condition of obligations being "contractually binding and enforceable," for which debtors and, where applicable, guarantors bear unlimited liability, includes all obligations that appear in the contractual provisions of the underlying exposures that are material from the investors' perspective, as they affect the obligations of the debtor and, where applicable, the guarantor to make payments or provide collateral.
In the MNB's opinion, for the application of Article 20(8) of the Securitization Regulation, exposures with defined regular payments include:

a) in the case of revolving securitization, exposures repayable in a lump sum as referred to in Article 20(12) of the Securitization Regulation; b) exposures related to credit card facilities; c) exposures where payment installments cover only the interest, and the principal amount is repaid at maturity, including mortgage loans where the installment covers only the interest in the first years; d) exposures where payment installments include the interest and the repayment of a portion of the principal amount, provided that:
da) the remaining principal amount is repaid at maturity; db) the repayment of the principal amount depends on the sale of assets serving as collateral for the exposure, in accordance with Article 20(13) of the Securitization Regulation and paragraphs 40 and 41 of this Recommendation; or e) exposures where payments are temporarily suspended in accordance with the contract between the debtor and the lender.

III.4. Lending Conditions, Expertise of the Securitization Initiator

In the MNB's opinion, for the application of the fourth subparagraph of Article 20(10) of the Securitization Regulation, exposures shall be considered similar if they:

a) belong to one of the asset categories referred to in Article 1(a)(i)-(iii) or (v)-(vii) of Commission Delegated Regulation (EU) 2019/1851 of 28 May 2019 supplementing Regulation (EU) 2017/2402 of the European Parliament and of the Council with regard to regulatory technical standards on the homogeneity of underlying exposures for securitization (hereinafter: RTS on Homogeneity of Exposures); b) belong to the asset category defined in Article 1(a)(iv) of the RTS on Homogeneity of Exposures and to the same type of obligation defined in Article 2(3)(a) of the RTS on Homogeneity of Exposures; or c) belong to the asset category defined in Article 1(a)(viii) of the RTS on Homogeneity of Exposures and have similar characteristics with respect to any of the homogeneity factors defined in Article 2(6) of the RTS on Homogeneity of Exposures.
In the MNB's opinion, for the application of Article 20(10) of the Securitization Regulation, the lending conditions applicable to the securitized exposures shall be compared to the lending conditions applicable to similar exposures at the time the securitized exposures were originated.
However, compliance with the requirement set out in paragraph 16 does not mean that similar or other exposures must be present in the balance sheet of the securitization initiator or the original lender when selecting the securitized exposures or at the time of securitizing the exposures, nor is it expected that the origination of similar or other exposures must actually occur at the time of the origination of the securitized exposures.
In the MNB's opinion, for the application of Article 20(10) of the Securitization Regulation, material changes in lending conditions requiring full disclosure refer to material changes in the lending conditions of exposures transferred to the Special Purpose Entity (SPE) after the transaction closing, in connection with the portfolio management defined in paragraphs 8 and 9.
In the MNB's view, changes in lending conditions are considered material if they:

a) affect the requirement defined in Article 1(b) of the RTS on Homogeneity of Exposures regarding the similarity of the underlying exposures to the lending conditions; or b) have a significant impact on the overall credit risk or expected average performance of the pool of underlying exposures, without resulting in a significantly different approach to assessing the credit risks associated with the underlying exposures.
It is expected that disclosure regarding all changes in lending conditions include an explanation of the purpose of said changes.
In the MNB's opinion, for the application of Article 20(10) of the Securitization Regulation, with regard to customer receivables arising other than in the form of credit, the reference to lending conditions shall be interpreted as a reference to the credit conditions applied by the seller for short-term loans generally resulting in securitized exposures and recommended to its customers in connection with the sale of its products and services.
The MNB expects that, for the application of Article 20(10) of the Securitization Regulation, the underlying exposures do not include residential loans that were granted and advertised on the condition that the loan applicant or their intermediaries were informed that the information provided might not be verified by the lender. This requirement does not apply to residential loans granted without such an advertisement, or where the applicant or intermediaries were not informed of this condition at the time of origination, or where they learned of it after the loan was granted.
In the MNB's opinion, for the application of Article 20(10) of the Securitization Regulation, only relevant information shall be considered "information." The relevance of information shall be based on whether the information is a relevant underlying metric, for example, for assessing the borrower's creditworthiness, evaluating access to collateral, and reducing the risk of fraud.
In the MNB's opinion, the scope of relevant information generally includes income for general non-income-producing residential mortgage loans, and rental income for income-producing residential mortgage loans. Information that cannot be used as a credit risk metric, such as mobile phone numbers, shall not be considered relevant information.
It is expected that, for the application of Article 20(10) of the Securitization Regulation, the creditworthiness of borrowers from third countries be determined in accordance with the relevant provisions of Act CCXXXVII of 2013 on Credit Institutions and Financial Enterprises (hereinafter: Financial Institutions Act) and Act CLXII of 2009 on Credit to Consumers, as well as taking into account the following principles:

a) before concluding the credit contract, the lender assesses the borrower's creditworthiness appropriately based on appropriate information, including information provided by the borrower where applicable, and in consultation with the relevant database; b) if the parties change the total amount of the credit after concluding the credit agreement, the lender must update the financial information available regarding the borrower and examine the borrower's creditworthiness before any significant increase in the total amount of the credit; c) the lender must thoroughly examine the borrower's creditworthiness before concluding the credit contract, taking into account factors that are material from the perspective of verifying the borrower's obligations under the credit contract; d) the procedures and information used as the basis for the assessment must be documented and preserved; e) the creditworthiness assessment must not rely predominantly on the value of residential property exceeding the loan amount or on the assumption that the value of residential property will increase, unless the purpose of the credit contract is the construction or renovation of residential property; f) the lender must not have the ability to cancel or modify a credit agreement concluded to the detriment of the borrower based on an incorrect creditworthiness assessment; g) the lender must make the credit available to the borrower only if the result of the creditworthiness assessment indicates that the obligations arising from the credit agreement are likely to be fulfilled as stipulated in the agreement; h) the borrower's creditworthiness must be reassessed based on updated information before any significant increase in the total amount of the credit occurs after the conclusion of the credit agreement, unless the additional credit is planned and included in the original creditworthiness assessment.
It is expected that, when determining whether the securitization initiator or the original lender has expertise in originating similar exposures in accordance with Article 20(10) of the Securitization Regulation, the members of the governing body of the securitization initiator or the original lender, and senior employees other than governing body members responsible for the management and origination of similar exposures:

a) possess appropriate knowledge and skills in originating exposures similar to the securitized exposures; b) have appropriate roles and responsibilities, as well as the necessary capabilities; c) have sufficient experience based on their previous positions, as well as appropriate education and training; and d) are involved in the operational management structure related to the origination of exposures.

In evaluating the above, for organizations subject to prudential supervision, the supervisory licenses or permits obtained by the organization shall be considered relevant for the purpose of originating exposures similar to the securitized exposures.

In the MNB's opinion, the securitization initiator or the original lender possesses the necessary expertise if:

a) the business activity of the organization or the consolidated group to which the organization belongs for accounting or prudential supervisory purposes has extended to the origination of exposures similar to the securitized exposures for at least five years; or b) at least two members of the governing body individually possess at least five years of relevant professional experience in originating exposures similar to the securitized exposures, and senior employees other than governing body members responsible for managing the organization's exposures similar to the securitized exposures individually possess at least five years of relevant professional experience in originating exposures similar to the securitized exposures.
It is expected that the securitization initiator or the original lender provide sufficient evidence of relevant expertise for the purpose of verifying the number of years of professional experience.

with full detail, in accordance with applicable confidentiality requirements, provide information to enable investors to fulfill their obligations under Article 5(3)(c) of the Securitisation Regulation.

III.5. Prohibition of exposures to non-performing loans and debtors or guarantors with adverse credit history 7

For the purposes of applying Article 20(11) of the Securitisation Regulation, non-performing exposures shall be interpreted in accordance with Article 178(1) of the CRR. This concept has been further refined by the Commission Delegated Regulation (EU) 2018/171 of 19 October 2017 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards on the materiality threshold for late payment, MNB Regulation No 44/2018 (XII. 5.) on the consideration of non-financial controlling interests and the materiality threshold for late payment obligations, and MNB Recommendation No 9/2022 (V. 3.) on the application of the non-performance concept under Article 178 of Regulation (EU) No 575/2013.
In the opinion of the MNB, if the originator or the original lender does not qualify as an institution subject to the CRR, the originator or the original lender must comply with the expectation set out in point 29 to such an extent that it does not constitute an undue burden. In this case, it is expected that the originator or the original lender uses information obtained from the debtor at the time of the exposure's disbursement, information obtained from the originator during the management of its exposures or its risk management procedures, or information obtained from third parties.
According to the MNB's expectation, the circumstances defined in Article 20(11) of the Securitisation Regulation shall be interpreted as definitions of "adverse credit history". Other possible circumstances of adverse credit history not mentioned in the cited provision shall be interpreted as not falling under this requirement.
Under the MNB's expectation, the prohibition on the selection and transfer to the KCGE of underlying exposures to "debtors or guarantors with adverse credit history" as defined in Article 20(11) of the Securitisation Regulation means that at the time of selection, at least one debtor with a non-adverse credit history and, where applicable, a guarantor must be jointly and severally liable for the full amount of the securitised exposures. Consequently, the MNB expects that the underlying exposures do not include the following exposures:

a) exposures to debtors with adverse credit history, if there is no guarantor for the full amount of the securitised exposure, and

b) exposures to debtors with adverse credit history that have a guarantor with adverse credit history.

Based on the MNB's expectation, the phrase "to the best of its knowledge" in Article 20(11) of the Securitisation Regulation is considered fulfilled if the information – regarding its sources and circumstances – derives from the following combinations of sources and circumstances:

a) from the debtor at the time of the exposure's disbursement,

b) from the originator during the management of its exposures or its risk management procedures,

c) from notifications sent to the originator by third parties, or

d) from publicly available information or information regarding entries in one or more credit registers concerning persons with adverse credit history at the time of the disbursement of the underlying exposure, provided that these information were already taken into account in connection with points (a)–(c), and in compliance with applicable regulatory and supervisory requirements, including those regarding sound lending practices defined in Article 9 of the Securitisation Regulation. This provision, however, does not apply to receivables arising other than in the form of credit, which are not required to meet lending criteria.

According to the MNB's expectation, the requirement in Article 20(11)(a) of the Securitisation Regulation to exclude exposures to debtors or guarantors with adverse credit history who have undergone a debt rescheduling procedure regarding their non-performing exposures shall be understood to apply equally to the rescheduled exposures of the affected debtor or guarantor, as well as to those exposures that were not rescheduled. The MNB further expects that rescheduled exposures meeting the conditions set out in Article 20(11)(a)(i) and (ii) of the Securitisation Regulation shall not lead to the debtor or guarantor being classified as having an adverse credit history.
It is expected that the requirements mentioned in Article 20(11)(b) of the Securitisation Regulation shall be limited to exposures to debtors or guarantors where, at the time of the disbursement of the underlying exposure:

a) the debtor or guarantor was explicitly identified in the credit register as a person or organization with an adverse credit history due to their adverse situation or negative information stored in the records of the Central Credit Information System (hereinafter: credit register) defined in Act CXXII of 2011 on the Central Credit Information System, and

b) the debtor or guarantor appears in the credit register for reasons that are material from the perspective of credit risk assessment.

According to the MNB's expectation, in the application of Article 20(11)(c) of the Securitisation Regulation, exposures to debtors or guarantors with adverse credit history shall not be considered "having a credit rating or credit score indicating a significantly higher risk of default on contractual payment obligations" than similar, non-securitised exposures held by the securitisation initiator to other debtors or guarantors, provided that:

a) the factors most determining the expected performance of the underlying exposures and similar exposures are similar, and

b) as a result of the similarity defined in point (a), based on past performance or information related to applicable models, it is reasonably expected that their performance will not deviate significantly during the transaction's maturity, or – if the transaction's maturity exceeds four years – for at most four years.

Based on the MNB's expectation, the requirement set out in point 36 is considered fulfilled if:

a) the underlying exposures do not include exposures classified as doubtful, with adverse credit history, non-performing, or having a similar effect based on relevant accounting standards, or

b) the underlying exposures do not include exposures to debtors or guarantors whose credit quality is significantly worse, based on credit ratings or other credit quality thresholds, than the credit quality of debtors or guarantors of similar exposures disbursed by the initiator in its general lending operations in accordance with its credit risk strategy.

III.6. Repayment performed at least once 8

According to the MNB's expectation, in the application of Article 20(12) of the Securitisation Regulation, additional advances and draws by a given borrower regarding a certain exposure, and the rescheduling of the same exposure with a given borrower, do not result in a new requirement regarding the "already repaid at least once" condition for that exposure. It is expected that the planned transfer to the KCGE of different, separate exposures with the same borrower shall result in a new requirement regarding the "already repaid at least once" condition.
The MNB expects that, in the application of Article 20(12) of the Securitisation Regulation, the repayment defined therein – according to which they "must have repaid at least once" by the time of transfer – shall be a rental payment, principal repayment, interest payment, or any other performance or any other type of traditional payment defined in the contractual agreement related to the exposure.

III.7. Prohibition of primary dependence on the sale of assets 9

According to the MNB's expectation, in the application of Article 20(13) of the Securitisation Regulation, transactions are not primarily dependent on the sale of assets securing the underlying exposures, and are therefore permitted, if:

a) the contractual fixed principal outstanding of the underlying assets at maturity, which depend on the sale of assets securing the underlying exposures for the repayment of the principal, correspond to no more than 50% of the total original exposure value of all securitisation positions within the securitisation, in the case of amortising securitisations at the time of transaction initiation, and in the case of revolving securitisations during the revolving period,

b) the maturity of the underlying exposures defined in point (a) is not subject to significant concentrations and the respective maturities are appropriately distributed over the transaction's maturity, and

c) the aggregated exposure value of all underlying exposures defined in point (a) vis-à-vis a single obligor does not exceed 2% of the aggregated exposure value of all underlying exposures included in the securitisation.

If underlying exposures depending on the sale of assets at maturity for the repayment of their outstanding principal are not included in the securitisation, the requirements defined in point 40 shall not apply.
The MNB expects that for the purpose of exemption, regarding repayments made to owners of securitisation positions whose underlying exposures have asset coverage guaranteed by a repurchase obligation to be fulfilled by the seller of the asset securing the underlying exposure or another third party, or where the risk related thereto is fully mitigated:

a) the seller or third party assuming the repurchase obligation shall not be insolvent, and

b) there shall be no reason to assume that the organization would be unable to fulfill its obligations related to the guarantee or repurchase.

IV. Criteria for Standardisation

IV.1. Adequate mitigation of interest rate and currency risks 10

According to the MNB's expectation, in the application of Article 21(2) of the Securitisation Regulation, interest rate and currency risks arising from the securitisation can be considered "adequately mitigated" if the hedging transaction or risk mitigation is implemented, provided that it is not unusual in that it covers a significant part of the interest rate or currency risks based on economically relevant scenarios. In the opinion of the MNB, such mitigation can also be implemented in the form of derivative transactions or other risk mitigation measures – including reserve funds, overcollateralization, securitisation spread application, or other measures. In the application of Article 21(2) of the Securitisation Regulation, standard international financial practices include documentation standards accepted by the International Swaps and Derivatives Association (hereinafter: ISDA) or similarly recognized standards.
It is expected that if the adequate mitigation of interest rate and currency risks is implemented through derivative transactions:

a) the derivative transactions shall be used exclusively for the actual hedging of asset and liability mismatches arising from interest rates and currencies, and shall not serve speculative purposes,

b) the derivative transactions shall be based on generally accepted documentation, including documentation standards accepted by ISDA or similarly recognized standards, and

c) in the event that the creditworthiness of the counterparty, as determined by credit rating or other means, falls below a certain level, the documentation related to the derivative transaction shall ensure that collateral requirements apply to the counterparty, or that reasonable efforts are made to replace it or obtain a guarantee from another counterparty.

The MNB expects that if the mitigation of interest rate and currency risks mentioned in Article 21(2) of the Securitisation Regulation is not achieved through derivative transactions but through other risk mitigation measures, these measures shall be designed with sufficient justification. It is further expected that if such risk mitigation measures are used to mitigate multiple risks simultaneously, the disclosure required by Article 21(2) of the Securitisation Regulation shall also explain how the measures cover interest rate and currency risks on the one hand, and other risks on the other hand.
It is expected that the measures defined in points 45 and 46, as well as the justification supporting the adequacy of the mitigation of interest rate and currency risks throughout the transaction's maturity, shall be disclosed.
In the opinion of the MNB, in the application of Article 21(2) of the Securitisation Regulation, exposures within the pool of underlying exposures that contain solely a derivative component serving exclusively to directly hedge the interest rate or currency risk of that specific underlying exposure, but do not themselves qualify as derivative transactions, shall not be considered prohibited.

IV.2. Interest payments based on a reference rate 11

It is expected that, in the application of Article 21(3) of the Securitisation Regulation, interest rates considered appropriate as reference rates for interest payments based on a reference rate shall include:

a) interbank offered rates, including Libor, Euribor, BUBOR, and other recognized reference indicators,

b) other accepted reference interest rates, such as €STR, SONIA, SOFR, and TONA,

c) interest rates determined by monetary authorities, including the base rate (e.g., Fed funds rates, MNB base rate) and central bank discount rates, and

d) sectoral interest rates reflecting the lender's funding costs, including general variable interest rates and internal interest rates directly reflecting the market funding costs of a sub-unit of institutions, provided that sufficient data is available to investors to evaluate the relationship of sectoral interest rates to other market interest rates.

According to the MNB's expectation, in the application of Article 21(3) of the Securitisation Regulation, a formula is considered complex if it meets the definition determined by the Global Association of Risk Professionals (GARP), i.e., it is a financial instrument with characteristics that make it more complex than simpler, so-called plain vanilla products. A formula (derivative transaction) does not become complex through the application of simple interest caps or floors.

IV.3. Applicable requirements in case of payment demand or notice of immediate maturity 12

It is expected that the transaction documentation shall include a list of "extraordinary circumstances" in the application of Article 21(4)(a) of the Securitisation Regulation. Given the nature of "extraordinary circumstances" and to provide certain flexibility regarding possible unusual circumstances that may require funds to be held in the KCGE for the benefit of investors, if the transaction documentation contains a list of "extraordinary circumstances" in accordance with this point, such a list need not be exhaustive.
Based on the MNB's expectation, in the application of Article 21(4)(a) of the Securitisation Regulation, the amount of money held at the KCGE refers to the amount that the trustee acting for the benefit of investors or other representative of investors, or the amount accepted by investors – in accordance with voting provisions in the transaction documentation – is obliged to act upon.
The MNB expects that, in the application of Article 21(4)(a) of the Securitisation Regulation, in the case of funds held at the KCGE in the form of a reserve fund for future use, the use of the reserve fund shall be limited exclusively to the purposes defined in Article 21(4)(a) of the Securitisation Regulation or to repayments to investors in the appropriate order.
It is expected that the requirements set out in Article 21(4)(b) of the Securitisation Regulation shall apply exclusively to the repayment of the principal amount, and shall not extend to the repayment of interest.
The MNB expects that, in the application of Article 21(4)(b) of the Securitisation Regulation, no payment shall be made deviating from the loss-absorption ranking of the principal amount in the event of a payment demand or notice of immediate maturity. If there is no case of payment demand or notice of immediate maturity, the MNB considers principal repayment for the purpose of replenishment under Article 20(12) of the Securitisation Regulation to be acceptable.
Based on the MNB's expectation, in the application of Article 21(4)(d) of the Securitisation Regulation, the investors' decision to sell the underlying exposures at market value shall not be considered an automatic sale of the underlying exposures at market value.

IV.4. Payment order deviating from the loss-absorption ranking 13

According to the MNB's expectation, in the application of Article 21(5) of the Securitisation Regulation, the following may be included among triggering events related to the deterioration of the credit quality of underlying exposures:

a) cumulative losses on the underlying exposures and the transaction's weighted average life, which exceed a certain percentage of one-year expected losses, for underlying exposures for which expected losses can be determined according to the CRR or other relevant EU regulations 14,

b) accumulated, non-matured non-performances exceeding a certain percentage of the outstanding nominal amount of the securitisation transaction tranche managed by investors and the amount of the securitisation transaction tranche assigned to it,

c) the portfolio's weighted average credit quality falling below a certain predetermined level, or the concentration of high credit risk exposures increasing towards a predetermined level.

According to the MNB's expectation, in the application of Article 21(5) of the Securitisation Regulation, after repayment returns to ranking-based repayment, further return to non-ranking-based repayment shall not be permitted based on the transaction documentation.

IV.5. Provisions providing for accelerated repayment, events triggering the end of the revolving period 15

According to the MNB's expectation, in the application of Article 21(6)(b) of the Securitisation Regulation, an event related to insolvency occurring with respect to the loan servicing provider shall:

a) allow for the replacement of the loan servicing provider to ensure the continuation of service provision, and

b) trigger the end of the revolving period.

IV.6. Expertise of the loan servicing provider 16

The MNB expects that for claims arising from financial services defined in Section 3(1)(b), (c), and (l) of the Hpt., the loan servicing provider shall be a financial institution licensed to grant credit and loans, which holds a contract with the KCGE ensuring the management of the receivables to be transferred. It is expected that when assessing whether the loan servicing provider has expertise in managing exposures similar to the securitised exposures, the members of the loan servicing provider's management body and senior employees responsible for the management and disbursement of similar exposures, who are not members of the management body:

a) shall possess appropriate knowledge and skills in the disbursement of exposures similar to the securitised exposures,

b) shall have appropriate roles and responsibilities, and possess the necessary capabilities,

c) shall have sufficient experience based on their previous positions, as well as appropriate education and training, and

d) shall be involved in the operational management structure related to the disbursement of exposures.

In the evaluation of the above, for organizations subject to prudential supervision, the supervisory licenses or permits obtained by the organization shall be considered relevant for the disbursement of exposures similar to the securitised exposures.

In the opinion of the MNB, the loan servicing provider possesses the necessary expertise if:

10 Related to Article 21(2) of the Securitisation Regulation 11 Related to Article 21(3) of the Securitisation Regulation 12 Related to Article 21(4) of the Securitisation Regulation 13 Related to Article 21(5) of the Securitisation Regulation 14 Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC 15 Related to Article 21(6) of the Securitisation Regulation 16 Related to Article 21(8) of the Securitisation Regulation

a) The organization or the consolidated group to which it belongs has been engaged in the placement of exposures similar to securitized exposures for at least five years from an accounting or prudential supervisory perspective, or b) at least two members of the governing body have individual relevant professional experience of at least five years in the placement of exposures similar to securitized exposures, and senior staff members responsible for the management of the organization's exposures similar to securitized exposures, who are not members of the governing body, have individual relevant professional experience of at least five years in the placement of exposures similar to securitized exposures.

It is expected that the credit servicing provider, for the purpose of proving the number of years of professional experience, shall provide information with sufficient detail regarding the relevant expertise, in compliance with applicable confidentiality requirements, to enable investors to fulfill their obligations under Article 5(3)(c) of the Securitisation Regulation.
For the purposes of applying Article 21(8) of the Securitisation Regulation, the concept of "exposures similar in nature" shall be interpreted in accordance with point 15 of this Recommendation.
In the opinion of the MNB, for the purposes of applying Article 21(8) of the Securitisation Regulation, the regulations, procedures, and risk management control measures of the credit servicing provider regarding the management of exposures shall be considered adequately documented if the credit servicing provider is an organization that
a) is subject to prudential and capital regulation and supervision in the European Union, and such supervisory permits or licenses are considered relevant for the management of exposures similar to securitized exposures, or b) is not subject to prudential and capital regulation in the European Union, nor is it under supervision, and demonstrates the existence of adequately documented and appropriate regulations and risk management control measures, adheres to best market practices, and possesses the necessary capabilities for reporting. The demonstration shall be supported by a review by a third party, such as a credit rating agency or external auditor.

IV.7. Remedies and actions related to borrower default or non-performance 17

It is expected that, for the purposes of applying Article 21(9) of the Securitisation Regulation, in the sense of "clear and consistent definition" and "clear definition" – to facilitate the work of investors – identical concepts shall be used throughout the transaction documentation.

17 Regarding Article 21(9) of the Securitisation Regulation

IV.8. Handling conflicts between different classes of investors 18

Based on the expectations of the MNB, for the purposes of applying Article 21(10) of the Securitisation Regulation, the provisions of the transaction documentation that "facilitate the timely resolution of conflicts between different investor classes" shall contain provisions regarding:
a) the method for convening meetings or organizing conference calls, b) the maximum time frame for creating the meeting or conference call, c) the quorum required for decision-making, d) the minimum threshold of votes for the validity of the resolution, clearly distinguishing the lower thresholds for each type of resolution, e) where necessary, provision of a venue for meetings within the European Union.

V. Transparency Criteria
V.1. Historical non-performance and loss data 19

It is expected that, for the purposes of applying Article 22(1) of the Securitisation Regulation, if the seller cannot provide the data in accordance with the data requirements set forth in the cited provision, publicly accessible external data or data provided by third parties – such as credit rating agencies or other market participants – shall be used, provided that all other requirements set forth in Article 22 of the Securitisation Regulation are met.
In the opinion of the MNB, for the purposes of applying Article 22(1) of the Securitisation Regulation, the term "fundamentally similar exposures" refers to exposures that are not limited to those appearing in the balance sheet of the originator and that
a) are similar in terms of the factors that most determine the expected performance of the underlying exposures, and b) as a result of the similarity mentioned in point a), it was reasonably expected, based on past performance or information related to applicable models, among other things, that their performance during the term of the transaction or – if the term of the transaction is longer than four years – for up to four years, will not be significantly worse than that of the securitized exposures.

V.2. Verification of the sample taken from underlying exposures 20

The MNB expects that, for the purposes of applying Article 22(2) of the Securitisation Regulation, the underlying exposures to be verified prior to issuance shall constitute a representative sample of the temporary portfolio from which the securitized pool is drawn, and which must be in a reasonably finalized form prior to issuance. For securitisations where multiple tranches of securities are issued, including master trusts, a new verification must be performed prior to issuance in cases where one year has elapsed since the previous verification.
Based on the expectations of the MNB, for the purposes of applying Article 22(2) of the Securitisation Regulation, a suitable and independent party is considered to be one who
a) possesses the experience and capability necessary to perform the verification, and b) is not ba) a credit rating agency, bb) a third party verifying compliance with STS criteria in accordance with Article 28 of the Securitisation Regulation, bc) an organization affiliated with the originator, the sponsor, the investor, or the KCGE.
It is expected that, for the purposes of applying Article 22(2) of the Securitisation Regulation, the verification shall be performed using appropriate statistical methods and based on a sample of underlying exposures randomly selected from the underlying exposures used in the securitization, and the sample size shall be determined such that the probability (confidence level) of appropriately rejecting the hypothesis that there are no exemptions from any requirement in the entire population of underlying exposures used in the securitization shall be at least 95%, i.e., the probability of a so-called Type II error, where the entire population is incorrectly accepted as a population without exemptions, shall be 5%.
In the opinion of the MNB, the minimum number of underlying exposures included in the sample must always be 50. For securitisations where the population of underlying exposures consists of fewer than 50 underlying exposures, the sample must consist of all underlying exposures.
In the opinion of the MNB, the verification shall be performed in the form of an accepted procedural report.
In the opinion of the MNB, for the purposes of applying Article 22(2) of the Securitisation Regulation, it must be disclosed that the external verification has been carried out, and that it did not contain adverse findings.

V.3. Source-side cash flow model 21

In the opinion of the MNB, for the purposes of applying Article 22(3) of the Securitisation Regulation, the presentation of the contractual relationship between the underlying exposures and the cash movements between the originator, the sponsor, the investors, other third parties, and the KCGE is considered "accurate" if it has been performed appropriately and with sufficient detail to enable investors to model the payment obligations of the KCGE and to price the securitization accordingly. In the MNB's view, this may include algorithms that allow investors to model a wide range of different scenarios affecting cash flows, such as different prepayment or default rates.
It is expected that, for the purposes of applying Article 22(3) of the Securitisation Regulation, if the source-side cash flow model is developed by third parties, the originator remains responsible for providing the information to potential investors.

V.4. Environmental performance of assets 22

In the opinion of the MNB, the requirement set forth in Article 22(4) of the Securitisation Regulation shall only be applied if information regarding the energy certificates defined in the first subparagraph of Article 22(4) of the Securitisation Regulation is available, or if information regarding the main adverse impacts on sustainability factors of assets financed by the underlying exposures defined in the second subparagraph of Article 22(4) of the Securitisation Regulation is available to the originator, and the originator decides to apply the second subparagraph of Article 22(4) of the Securitisation Regulation, and if the relevant information has been recorded in its internal database or information systems. If any of such information is available only for a part of the underlying exposures, the requirement shall only be applied to that part of the underlying exposures for which the information is available.

VI. Final Provisions

This Recommendation is a regulatory instrument issued without binding force for supervised financial organizations, in accordance with point i) of paragraph (2) of Section 13 of Act CXXXIX of 2013 on the Magyar Nemzeti Bank. The content of the Recommendation issued by the MNB expresses the requirements imposed by laws, principles and methods recommended for application based on the MNB's law enforcement practice, as well as market standards and customs.
The MNB monitors and evaluates compliance with the Recommendation among the financial organizations it supervises during its inspection and monitoring activities, in accordance with general European supervisory practice.
The MNB draws attention to the fact that the financial organization may incorporate the content of this Recommendation into its regulations. In this case, the financial organization is entitled to state that the provisions contained in its regulations comply with the relevant Recommendation issued by the MNB. If the financial organization wishes to include only certain parts of the Recommendation in its regulations, it should avoid referencing the Recommendation and apply it only with respect to the parts transposed from the Recommendation.
The MNB expects the affected financial organizations to apply this Recommendation from September 1, 2026.
On September 1, 2026, Recommendation No. 4/2020. (III. 24.) of the MNB on requirements for simple, transparent and standardized ABCP securitisations not qualifying as ABCP shall cease to be in force.

Varga Mihály signed
President of the Magyar Nemzeti Bank

Recommendation 9/2026 (July 29) of the Magyar Nemzeti Bank on requirements for simple, transparent and standardised securitisation not qualifying as ABCP