Parliament approves legislation on bourse unit for securitization
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Lawmakers on Tuesday approved legislation that paves the way for the Budapest Stock Exchange (BÉT) to establish a unit to support securitization. The legislation was approved in an expedited procedure with a vote of 116 for, 54 against, and no abstentions.
The legislation, submitted to Parliament by Minister of Finance Mihály Varga, seeks to "enliven the capital market with the creation of new products and new instruments," state news agency MTI reported.
Gábor Gion, state secretary at the Ministry of Finance, said in the debate before the vote that the legislation would support the issue of corporate bonds by SMEs. He added that the securitization unit would also ensure professional standards, excluding any issue of securities of the type that became toxic assets during the global financial crisis.
The National Bank of Hungary (MNB) announced a week earlier the launch of a HUF 300 billion corporate bond purchase program. In a bid to contribute to the spread of securitization in Hungary, the central bank said it would also buy securities backed by corporate loans within the scope of the scheme.
The MNB is the majority owner of the BÉT. As the financial market watchdog, the central bank will license and oversee the bourse unit established to support securitization.
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