Overview
The Hungarian Parliament adopted Act XVIII of 2026 on the Amendment of Certain Acts Necessary for Access to European Union Funds (the “Amendment Act“) which was promulgated on 26 June 2026, with most provisions entering into force on 29 June 2026. Among its provisions, the Amendment Act introduces material changes to Act XVI of 2014 on collective investment schemes and their managers (the “CIS Act“) and to Act LIII of 2017 on the Prevention and Combating of Money Laundering and Terrorist Financing (the “AML Act“). AML-related amendments are subject to a compliance grace period until 30 September 2026 for funds newly brought within the scope of the CIS Act.
The reforms are directed at strengthening the enforceability of supervisory requirements and promoting a more prudent and sound operation of the investment fund sector. The changes affect three principal categories of market participants: UCITS management companies, closed-end fund managers — including venture capital and private equity structures — and service providers subject to AML obligations in connection with those funds.
Entry into force: Most amendments to the CIS Act will enter into force on the third day following promulgation. AML-related obligations are subject to a compliance grace period until 30 September 2026 for funds newly brought within the scope of the CIS Act.
1. UCITS Management Companies
The Amendment Act amends the rules of the CIS Act governing the acquisition of qualifying holdings in UCITS management companies, in parallel with expanded licensing application requirements.
Under the revised framework, the acquisition of qualifying holdings in UCITS management companies must explicitly follow the investment firm rules set out in Chapter IX of Act CXXXVIII of 2007 on Investment Firms and Commodity Dealers, and on the Regulations of Their Activities. This alignment establishes a uniform and explicit statutory basis for ownership screening requirements applicable to UCITS management companies — an area that had previously lacked a dedicated sector-specific provision.
2. Closed-End Funds: Changes to the CIS Act
Closed-end funds — and in particular venture capital and private equity structures — are subject to the greatest number of new obligations under the Amendment Act, which substantially restructures the supervisory and administrative framework applicable to this category.
Registration framework. The requirement under the CIS Act for “approved management rules” at the point of registration is replaced with a reference to “management rules” only. This change signals the removal of the pre-approval requirement at the registration stage, reducing the administrative burden associated with fund formation.
Amendment to management rules. Under current law, any amendment to the management rules of a closed-end fund requires prior supervisory approval. The Amendment Act replaces this requirement with a notification-based regime. Following the entry into force of the Amendment Act, the fund manager will be required to notify the supervisory authority within five business days after an amendment takes effect, by submitting the updated rules. This regime applies to all closed-end funds, including venture capital and private equity funds.
Disclosure requirements. The mandatory content requirements for management rules, as set out in the third annex of the CIS Act, are simplified in respect of intermediary entities and investors’ rights. It will no longer be necessary to list the details of qualifying-holding owners in the management rules; only the manager’s legal form and name will be required.
Delegation of management. The unit-holder approval threshold for the transfer of management functions to another manager is reduced from 75% to 60%. Supervisory approval for such transfers remains a requirement under the amended framework.
Merger regime. A new, dedicated merger framework is introduced for closed-end funds, replacing the merger rules previously applicable to venture capital and private equity funds. Prior supervisory approval will not be required where the management rules either authorise the fund manager to proceed with the merger or condition it on a qualified majority vote of unit-holders. The Amendment Act further provides that management rules may, following its entry into force, restrict unit-holders’ free redemption and conversion rights.
Repealed provisions. A number of procedural and approval requirements are abolished as redundant, including: the qualifying-holding change approval requirement for closed-end fund managers; management rule approval requirements for closed-end funds; certain liability statement requirements linked to management rule approvals; notification timing rules applicable to manager changes; the merger-date definition; and the 10-business-day ownership-change procedure for closed-end investment funds.
3. Closed-End Funds: Changes to the AML Act
Expanded supervisory scope. The exemption previously available to venture capital fund managers from full supervision under the CIS Act framework is removed. As a result, these managers — and the funds under their management — will be subject to the full supervisory regime applicable under the CIS Act.
New beneficial owner definition. A dedicated statutory definition of “beneficial owner” is introduced for closed-end funds. Under this definition, the following persons qualify as beneficial owners:
- Unit-holders holding at least 25% of the fund, whether individually or together with close relatives;
- Persons who exercise control over such 25%-or-above holders;
- Persons entitled to approve amendments to the management rules or to authorise the delegation of management;
- Persons exercising de facto control over the fund — including through investment policy influence or veto and blocking rights — irrespective of their formal ownership interest; and
- Where no natural person qualifies under the above criteria, the fund’s senior executive officer is treated as the fallback beneficial owner.
Enhanced customer due diligence. Service providers subject to the AML Act will be required to collect the following information as part of their customer due diligence obligations in respect of closed-end funds: the fund’s management rules and constitutive documents; total capital and each investor’s proportionate share; and base details of each investor, including their classification as a professional or retail investor and their respective rights and obligations. Particular attention must be given to non-bearer instruments, unidentified beneficial owners, and potentially non-transparent ownership arrangements. In high-risk cases, the obligations extend to a more detailed investigation of investor chains, internal governance structures, and remuneration systems.
Reporting obligation. Under a parallel amendment to Act XLIII of 2021, fund managers will be required to report the unit ratio when submitting ownership interest data in respect of closed-end funds.
Compliance deadline. AML-related obligations for funds newly brought within scope must be met by 30 September 2026.
4. Venture Capital and Private Equity Funds: Additional Changes
Full supervisory coverage. As noted above, venture capital and private equity fund managers are no longer partially exempt from the CIS Act supervisory framework. Full supervisory coverage now applies, encompassing qualifying-holding control and management rule oversight — both of which were already within scope under the previous regime. A transitional provision permits newly in-scope fund managers to achieve compliance with the new requirements by 30 September 2026.
Registration requirements. For funds managed by alternative investment fund managers (AIFMs), registration must now include submission of the fund’s management rules, in addition to the existing requirements relating to capital subscription and payment evidence.
Simplified disclosure. The requirement to disclose the details of qualifying-holding owners in the management rules is removed.
Repealed supervisory approval. The supervisory approval requirement for changes in qualifying holdings in fund managers is abolished.
Practical Implications
The Amendment Act represents a significant recalibration of the regulatory framework applicable to investment funds in Hungary. The reforms pursue two parallel objectives: on one hand, strengthening supervisory oversight and transparency — most notably through the removal of the partial CIS Act exemption for venture capital fund managers and the introduction of expanded AML obligations; on the other, reducing the administrative burden associated with day-to-day fund management, through the replacement of approval requirements with notification-based regimes and the abolition of a number of procedural requirements that had become redundant.
Fund managers, investors, and their advisors should consider the following as immediate priorities:
1. Reviewing existing management rules and governance documents in light of the revised content requirements and the removal of the prior approval regime.
2. Assessing AML compliance frameworks against the new beneficial owner definition and the enhanced customer due diligence obligations, with particular attention to fund structures involving de facto control arrangements or non-transparent ownership.
3. For venture capital and private equity fund managers newly brought within the scope of full CIS Act supervision: developing a structured compliance roadmap with a target date of 30 September 2026.