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Hungary’s Brokerage Saga Continues As Central Bank Partially Suspends Quaestor

Tamás Székely 2015.03.10.

The National Bank of Hungary (MNB) said it had partially suspended the operating licence of Quaestor Securities Trading and Investment Company because of irregularities discovered during an audit. The MNB may put an oversight commissioner in charge of the company, pending a decision by the Financial Stability Council, the bank and financial market regulator said. Quaestor may not take new client orders, but an oversight commissioner could close open positions in the interest of clients, the MNB said. While the oversight measures are in force, clients’ right of disposal over their securities and financial assets will be suspended in the interest of clearing up the irregularities, it added.

Hungary’s Quaestor Financial Hrurira, a member of the Quaestor Group, filed for bankruptcy protection on Monday as clients panicked by the Buda-Cash scandal raced to sell their securities. Quaestor said the panic caused by the scandal had made normal operation of the market impossible and made a plea for state intervention. The foreign ministry said on Tuesday that it had terminated all contracts with companies connected with the chief executive officer of the Quaestor Group, including contracts for the operation of Hungary’s trading house in Istanbul and its visa centre in Moscow.

The National Bank of Hungary (MNB) also said it would propose legislation on shortening the time between full checks of financial companies, tightening controls of auditors and requiring identification of clients in transactions involving clearing house KELER, MNB deputy governor László Windisch told a parliamentary committee. Windisch told Parliament’s economy committee that the central bank and financial market regulator would make the proposals in a package of legislation. Windisch addressed the committee in the wake of the Buda-Cash scandal which involves losses thought to reach 100 billion forints (EUR 327m) at the Buda-Cash brokerage firm and a number of banks with which it has ties.

via and MTI photo: Tamás Kovács – MTI