Canada    FinTech Guide    Chapter 4    Hungary


4. Trading Platforms / Social Trading Platforms / Signal Following
Hungary  Hungary

The social and political climate towards trading, social trading or signalling platforms is neutral.



Legal Affairs


Operation of an MTF - and as of January 2018 an OTF (as defined under MiFID II and the Investment Services Act) -qualifies as investment service and is subject to licensing/passporting requirements.

In the case of FinTech signalling and social trading platforms the activities of the operator of the platform and the trader/front runner vis-á-vis the followers shall be examined separately. Depending on the specific circumstances, the provision of the following investment and ancillary investment services may apply:


  1. On the side of the platform operator:
    • Portfolio Management if the elements of the definition (see Annex I) are met and in this case it is irrelevant that the “predetermined investment criteria” are not defined by the operator but by the front runner; or
    • reception and transmission of orders in relation to one or more financial instruments (if the following of the transactions of the front runner is not automatic but shall be confirmed on a transaction by transaction basis by the follower.)

  2. On the side of the front runner:
    • Investment Advice if the front runner is formulating its investment policy personally, with respect to the individual circumstances of the followers or groups of followers; or
    • Investment Recommendation if the transactions/securities portfolio/financial investments of the front runner are available to a wide range of a heterogenic group of the followers publicly.


Economic Conditions


The players on this market are mostly foreign based companies, the only Hungarian based FinTech startup on this field is Forex Broker Stars.



Miscellaneous


MiFID II provides for significant changes with respect to trading platforms as well.



Contributing Authors

Lakatos, Köves & Partners

Richard Lock
Budapest, Hungary

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Chapter Index:


1. Payment Services / Mobile Payment

2. Asset and Portfolio Management

3. Consulting and Broking Services / Robo-advisory / Auto-trading

4. Trading Platforms / Social Trading Platforms / Signal Following

5. Crowdfunding / Crowdinvesting / Crowdlending

6. Virtual Currency - Bitcoin

7. Loan Services / Factoring / Loan Broking / Finetrading

8. Online Banking Services

9. Analytics and Research / Data Management / Risk Management

10. Accounting

11. Identification

12. Online-pawning

13. InsurTech

14. RegTech

15. Initial Coin Offerings (ICOs)

Disclaimer:
The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: 1 May 2018