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Bill would broaden definition of ‘yield’ for Quaestor investors

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A bill submitted to Parliament by a state secretary at the Justice Ministry would broaden the definition of “yield” applied in compensation for clients of Quaestor and other failed brokerages to include “income actually achieved”, Hungarian news agency MTI reported.

The billʼs author, Pál Völner, noted that interest had been included in the price of bonds sold by Quaestor, thus only that interest credited to investors’ securities accounts “cannot be seen as the yield generated by the investment in its entirety”. 

In an interview published in daily Magyar Idők today, National Bank of Hungary (MNB) deputy governor László Windisch said the law on compensating the clients of failed brokerages, approved by Parliament late last year, poses a “problem of legal interpretation when it comes to yields.

The law deducts yields accounted for compensation due clients, but in some cases clientsʼ yields were not realized as they bought securities at a price over nominal value, he explained. Failing to consider these unaccounted yields goes against the purpose of the law as well as the limits imposed under an earlier decision by the Constitutional Court, he said. For this reason, the central bank has initiated a review of a top-up fund established to compensate brokerage clients over the threshold offered by the Investor Protection Fund, he added.

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