Parliament approves Quaestor law amendment
Parliament approved legislation today that will facilitate the compensation of investors for savings lost due to the failure of the Quaestor brokerage firm.
The legislation will establish a HUF 30 million compensation threshold for investors, minus yields, and an 11% deduction for losses over HUF 3 mln.
The legislation replaces an earlier investor compensation law, parts of which were invalidated by the Constitutional Court in November. That legislation was opposed by the banking association, whose members complained that it would force them to pay too much in compensation to money-losing investors.
The Constitutional Court nullified provisions of the law requiring members of the Investor Protection Fund (Beva) to cover the extra compensation. It also invalidated parts that outlined eligibility for the compensation due to their discriminatory nature, adding that the compensation, in and of itself, did not go against the basic law.
Investors earlier bought some HUF 150 bln of unsanctioned bonds from Quaestor, according to reports. Quaestor went bankrupt and investors have been seeking more compensation than the usual amount given by the government in such cases. The case was particularly unusual because the government pulled its investment with Quaestor just before the brokerage went under, stirring accusations that the government had insider information.
The law was approved with 154 voting for, eleven voting against and 31 abstentions.
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