Office: József nádor tér 5-6., Budapest H-1051
Address: H-1368 Budapest, Pf. 242.

Phone:	(36-1) 483	-1866 -1867
	(36-1) 483	-1910 -1911 -1913 -1914
Fax:	(36-1) 266	-1989

E-mail: bankszovetseg@bankszovetseg.hu
Website: www.bankszovetseg.hu

About us

The emergence of a two-tier banking system also demanded the creation of a body to represent commercial banks.

In the autumn of 1988, a number of the commercial banks initiated the formation of the Hungarian Banking Association, which eventually came into being on February 17, 1989. In accordance with the Association's rules, membership of the Association is open to any financial institution, which has the minimum share capital provided by law and which accepts the rules of the Association. The Hungarian Banking Association was founded by 22 banks and financial institutions. It was registered by the Municipal Court of Budapest in accordance with Para 15 (1) of Act II of 1989 on February 28, 1989.

The most important function of the Association is to represent its members' interests vis-a-vis third parties. To this end, working committees are established, involving professionals from member banks.
In representing its members' interests, the Association participates in the drafting and discussion of laws, statutes and projects that affect the banking sector directly or indirectly. The Association presents its opinions, developed on the basis of consensus, in Parliament, in various government forums and while the legislation is being drafted. It reviews monetary policy and regulatory proposals of the National Bank of Hungary and maintains a close cooperation with the Hungarian Financial Supervisory Authority. One of its important functions is to cooperate with other professional organisations, explaining to them the views of the Association on current economic, financial and other relevant issues.

In certain specific functions, the Association plays a coordinating role in the implementation of bank modernisation projects. It promotes the establishment of institutions which improve the stability and efficiency of the banking system. It has thus had a role in the preparation of the deposit insurance and the credit guarantee institutions, the credit rating institution, the debtor registry and the Giro system.
The Association develops and coordinates a public relations project to promote an objective view of the operation of the Hungarian banking system, directed at both professionals and the public.

The Association is represented on the Board of the National Deposit Insurance Fund and on the Board of the Investor-Protection Fund. The Association has 38 member credit institutes.

RULES OF THE HUNGARIAN BANKING ASSOCIATION

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Name and Registered Office of the Association
Article 1

(1) Name of the Association: Magyar Bankszövetség
Name in French: Association Bancaire D'Hongrie
Name in English: Hungarian Banking Association
Name in German: Ungarischer Bankverband
Name in Russian: Vengerskaya Assotsiatsia Bankov
(2) Registered office: 1051 Budapest, V. József nádor tér 5-6.
(3) The Association's activities extend to the entire territory of Hungary.
(4) Year of Foundation: 1989. The Association is registered by the Budapest Municipal Court by Decision No. 7.Pk. 21 470/1989/1, under Serial No. 36 in the social organisations register.
(5) The Association pursues its activities in accordance with Act II of 1989 on Freedom of Association and its Rules.

Objectives
Article 2

(1) The Association's objectives :
- promoting the development of the legal and regulatory frameworks for the credit institutions sector and the financial markets; promoting the European integration of the credit institutions sector and the financial markets.
Accordingly:
- regularly monitoring and expressing an opinion on economic, fiscal and monetary policy issues, with special regard to issues affecting the operations of credit institutions;
- regularly monitoring EU legislative work affecting credit institutions through participation in the activities of the European Banking Federation and other international professional organisations,
- regularly informing the banking community on current activities in progress within the various EU institutions;
- representing the interests of the Hungarian banking community when developing standpoints of the European Banking Federation.
- with the cooperation of members, developing and representing views, opinions and evaluations in respect of proposed laws and regulations and other, non-codified regulatory issues affecting the Association's members;
- safeguarding and enforcing members' common interests;
- regularly expressing and effectively representing opinions formed within the Association jointly with members on economic policy issues and on legislative work;
- promoting cooperation between banks, especially through participation in creating new inter-bank institutions and developing inter-bank agreements, standards and self-regulatory systems;
- developing stances on professional, ethical and competition issues.
(2) The Association pursues its objectives through regular cooperation with Hungarian legislative bodies and regulatory authorities, other professional interest representation organisations in the financial sector and the European Banking Federation and other international organisations.
(3) The Association is a member of the European Banking Federation and the European Committee for Banking Standards. In addition, the Association participates in activities of other international professional organisations based on the decisions of the Association's Board.
(4) To promote the professional training and information of employees of member banks, the Association organises lectures, seminars and conferences, issues professional publications and maintains a web site.
(5) The Association does not pursue any political activities; the Association is independent of and does not provide any financial support to any party.

Members
Article 3

(1) The Association's membership consists of full members and observer members.
(2) Full membership is available only to those credit institutions whose head offices are registered in Hungary, or branches of those credit institutions whose head offices are registered in the European Union, providing financial and auxiliary financial services in Hungary.
(3) Observer membership is available to representative offices of those credit institutions whose head offices are registered abroad.

Members' rights and obligations
Article 4

(1) A condition for membership is that the institution be registered by the Hungarian Financial Supervisory Authority as a credit institution or branch of a credit institution. Further conditions are that it accept the Association's rules and pay a membership fee.
(2) Members of the Association have equal rights and are entitled to:
- participate in the Association's activities,
- attend with consultation and voting rights and make proposals for the agenda and subjects of the Association's General Meeting and other events; participate in the adoption of resolutions,
- express an opinion and make comments and proposals in relation to the operations of the Association and its bodies,
- initiate common reviews and the representation of specific technical issues,
- set up the Association's bodies and use their services,
- request the Ethics Committee's rulings in disputes concerning general banking conduct stipulated in the Association's Code of Ethics,
- nominate members for the Association's Board and working committees; elect the Association's Board,
- through their representatives, be nominated and elected to the Association's Board,
- access the Association's registers in accordance with Paragraph (2) of Article 20 hereof,
- request information on the Association's activities; upon such request, the Association shall provide information within 30 days.

(3) Members shall:
- promote the Association's activities,
- in their dealings with the Association, act in accordance with the Association's Rules, internal regulations and resolutions,
- attempt to settle disputes related to general banking conduct, especially those affecting customer confidence and fair competitor's conduct, through direct negotiations, before pursuing any other procedure, especially any court procedure, and if such attempts have failed, take recourse to the Association's Board for reconciliation,
- keep the business, bank and securities secrets that have come to their knowledge,
- act in accordance with the binding resolutions of the Association's supreme body (the General Meeting),
- pay on time a membership fee, to be determined by the General Meeting annually.

Observer members
Article 5

(1) Representative offices of credit institutions whose head offices are registered abroad may apply for observer membership in the Association.
(2) Observer members may attend the Association's events and make comments and proposals in relation to the Association's operations; however, they shall have no voting rights (Article 9) and may not be elected to the Association's Board.
(3) Observer members shall pay a contribution, to be determined by the General meeting annually, to cover the services provided by the Association.

Membership
Article 6

(1) Joining and quitting the Association is voluntary. Membership is established upon admission to the Association. In case of denial of admission, applicants may take recourse to the General Meeting for a revision of the decision.
(2) Membership in the Association shall cease:
- if a member announces in writing its intention to terminate its membership;
- if the member ceases to exist, or a member's status as per Paragraph (2) of Article 3 or an observer member's status as per Paragraph (3) of Article 3 ceases;
- by exclusion, if the General Meeting establishes that the member's conducts have violated the Rules of the Association;
- if the member fails to pay the membership fee within three months after the fee has become due;
- if the Association has ceased to exist;
(3) The Association's executive body shall keep a register of members.

Organisation
Article 7

The corporate bodies of the Association are: the General Meeting and the Board. Departments and working committees are the Association's professional organisations. The Association's corporate bodies and professional organisations perform their duties with the assistance of the Association's executive body (working organisation).

Article 8

(1) The Association's supreme body is the General Meeting, made up of the members' representatives. Members are represented in the General Meeting by their appointed chief executives. Occasionally, the chief executive may be substituted at the General Meeting by his duly authorised representative, under a written proxy. Each member has one vote at the General Meeting.
(2) The General Meeting shall be convened at least once a year. In addition, the General Meeting shall be convened within thirty days if so requested by at least three members of the Association, stating the agenda, or if the Board so decides, or a court so orders.
(3) The General Meeting shall be convened by the Board through the Secretary General. Written notifications stating the date, place and draft agenda shall be sent to the members at least 15 calendar days prior to the meeting. In extraordinary cases, where members are affected and the issue cannot be postponed, the Board may be convened under a shorter notice.

Article 9

(1) The General Meeting has the exclusive competence:
a) to establish the Rules of the Association and to amend them;
b) to elect or dismiss the President, the Vice President and members of the Board;
c) to elect or dismiss the Secretary-General;
d) to adopt the Rules of Procedures of the Board;
e) to adopt the Association's Membership Fee Rules and to amend them;
f) to determine the annual budget of the Association and to adopt the closing account;
g) to determine the annual membership fee;
h) to adopt the Association's and annual report and annual working programme;
i) to take other decisions binding to members of the Association;
j) to exclude members from the Association;
k) to declare the merger of the Association with other associations or to dissolve the Association;
l) to determine the attitude to be taken by the Board in respect of issues discussed by the General Meeting;
m) to set up an Ethics Committee, determine its operating principles and elect its Members;
(n) to appoint members of the Permanent Court of Arbitration of Money and Capital Market;
(o) to act in all those matters referred to it by statue or by these Rules or which it takes into its excusive competence.

(2) The issues specified in Paragraph (1) shall be decided by the General Meeting through resolutions. Resolutions shall be binding to all members of the Association (full members and observer members as specified in Article 3).

Article 10

(1) The General Meeting will have a quorum if two thirds of the members are present. The presence of a quorum shall be ascertained before each resolution.
(2) A General Meeting postponed due to lack of a quorum and reconvened with the same agenda shall have a quorum irrespective of the number of members present. In case of postponement there should be a time lapse of at least 8 days between the original date and the new date.
(3) A General Meeting shall be chaired by the President of the Association. The President may assign another person to chair the General Meeting.

Article 11

(1) Except for the issues specified in Paragraph 2, the General Meeting shall decide on issues by an open vote, with a simple majority. In case of a tied vote, the President shall have a casting vote.
(2) A qualified majority (75 % + one vote) shall be required for decisions on issues specified in points a), h), i) and j) of Paragraph (1) of Article 9. In issues specified in Paragraph i), the member affected may not vote.
(3) Except for the personal issues specified in points b) and c) of Paragraph (1) of Article 9 ((which shall be subject to a secret vote), resolutions shall be adopted by an open vote by hand-raising. A secret vote on any other issue may be initiated by any member, if one-third of the members present support the proposal.
(4) On expiry of its term, the Board shall submit a proposal for setting up a Nominating Committee of at least four members. The composition of the Nominating Committee shall be decided on by members of the General Meeting in writing. Prior to the General Meeting, the Nominating Committee shall collect members' recommendations for nominations. Recommendations for nominations, including the number of members supporting each nomination shall be presented by the Nominating Committee's spokesman at the General Meeting.
(5) Should the number of Board members drop for any reason, the next General Meeting shall elect new members to the Board. The Board shall elect a nominating Committee to prepare the election.
(6) Each nominee should received more than half of the valid votes to be elected. Should any of the nominees fail to receive more than half of the valid votes, a new vote shall be held between the two nominees that have received the most votes, the nominee receiving the most votes shall win.
(7) The General Meeting shall be minuted. The minutes shall contain the date of the General Meeting, essential comments and proposals made at the meeting, the resolutions adopted and the number of members who voted for and against each resolution adopted. The minutes shall be signed by the Chairperson of the General Meeting and the recorder and two persons elected at the beginning of the meeting. Resolutions of the General Meetings shall be registered by the Association's executive body.
(8) General Meetings are public. Members may exclude the public by a majority of votes, should the protection of a member's interest or members' common interests so require.
(9) The President may invite, with the right of consultation, representatives from government agencies, economic and social organisations, representatives from professional associations of the financial markets, representatives from international organisations, and individual experts.

The Board
Article 12

(1) The Board is the executive body of the Association, headed by the President. Members of the Board shall include the Vice President, four members and the Secretary-General. Except for the general secretary, the members of the Board shall be elected for a three-year term from members' chief executives.
(2) The Board shall exercise its representation rights through the President and the Secretary-General.
(3) The Board shall meet whenever necessary. The Board meeting shall be convened by the Secretary-General in writing, in agreement with the President. Any member of the Board may initiate the convening of a Board Meeting. The invitation to the Board Meeting and the written draft agenda of the meeting shall be sent to the Board members at least three days prior to the meeting. In extraordinary cases, where members are affected and the issue cannot be postponed the Board may be convened under a shorter notice.
(4) The Board shall:
a) convene the General Meeting,
b) ensure the continuous operation of the Association,
c) carry out the General Meeting's resolutions,
d) set up the Association's departments and working committees,
e) decide on joining international organisations,
f) compile and submit to the General Meeting the Association's annual budget and closing accounts, the Association's annual report and annual working programme.
g) have the power to decide on issues not falling under the exclusive competence of the General Meeting.
(5) The Board will have a quorum if four members are present. The Board shall adopt its decisions by open vote, with a simple majority. Members of the Board may only be substituted by an observer, under a written proxy. The observer may not exercise the voting rights of the substituted member. Subject to the agenda, additional members, experts, and representatives from government agencies, social and economic organisations and international organisations may be invited to the Board Meeting on an occasional basis.
(6) Board membership shall cease upon
a) end of term,
b) resignation,
c) recall,
d) demise,
e) the Board members' assignment as the chief executive of the credit institution is terminated, or, in respect of the Secretary-General, employment is terminated.
(7) The General Meeting may recall a Board Member if the Board member:
a) has in the course of performing his duty acted in a manner imputable to
him,
b) has failed to perform his duties for reasons within his control,
c) has become permanently inapt to accomplish the duties of his position.

The President
Article 13

(1) The President reports to the General Meeting
(2) The President's tasks and scope of competence are:
a) to manage the activities of the Board,
b) to decide on and take action between Board Meetings in urgent issues falling under the scope of competence of the Board,
c) to manage and control the implementation of resolutions and rulings of the General Meeting and the Board,
d) to communicate with government agencies, other social and interest representation organisations and international professional organisations.
e) to chair the Board Meetings,
f) to represent the Association,
g) to exercise employer rights in respect of the Secretary-General,
h) to perform all those duties that are referred to the President's scope of competence by statue.

The Vice-President
Article 14

The Vice-President shall substitute the President in his absence. In the course of substituting the President, the Vice-President shall represent the Association and exercise its rights with the full powers of a President.

Article 15

(1) The Association may set up departments according to credit institution categories and as members may request. The departments shall each elect a secretary from their members.
(2) The departments shall establish their own tasks and rules of procedure. The departments may not act in cases falling under the exclusive scope of competence of the General Meeting.
(3) The Board may set up special committees to perform on-going or ad hoc tasks. The working committees shall establish their own operational rules.

Bank Card Forum
Article 16

(1) The Bank Card Forum is an independent professional body, whose members are organisations licensed to issue bank cards.
(2) The tasks of the Bank Card Forum are: to reconcile members' interests, adopt common rules of procedure, monitor issues related to the use of bank cards and take decisions binding to its members, in accordance with its internal rules.
(3) The Bank Card Forum operates as a body attached to the Hungarian Banking Association. The Association provides space for the operation of the Bank Card Forum based on an agreement concluded with the participants.
(4) The operational rules of the Bank Card Forum are established by its members.

Ethics Committee
Article 17

(1) The Ethics Committee is the forum for all ethical issues and, in particular, for disputes related to general banking conduct as mentioned in Paragraph (3) of Article 4.
(2) The operations of the Ethics Committee are governed by the principles set by the General Meeting.
(3) The Ethics Committee shall consist of 3 members, elected by the General Meeting for a three-year term. Elected as member of the Committee may be any respected person of the profession who has no employment relations or any other legal relation aimed at performing work for remuneration with either member of the Association.
(4) The Chairman of the Ethics Committee shall be elected by the members of the Committee from among themselves.
(5) The Ethics Committee shall establish its own rules of procedure.
(6) An Ethics Committee procedure may be instituted upon the request of a member or a customer of a member or the Association's Board or if such procedure is warranted pursuant to the Ethics Committee's decision.

Court of Arbitration of Money and Capital Market
Article 18

As a founder, the Association shall participate in setting up and operating a Permanent Court of Arbitration of Money and Capital Market. The Association may provide financial contribution for the operation of Court. The contribution shall be set in the Association's annual budget.

The Secretary General
Article 19

(1) The head of the executive body of the Association is the Secretary-General. The Secretary-General is elected for a five-year term and is employed by the Association.
(2) The Secretary-General's duty is to ensure the continuous operation of the Association in accordance with its founding objectives. To this end, he shall:
a) arrange for registering the Association and reporting any changes in its data,
b) manage the Association's executive body,
c) exercise employer's rights over the staff of the executive body,
d) in considering the proposals of the members, initiate with the Board the defining of timely tasks and the setting up of specialist groups from the professional staff of member institutions, aimed at developing a common stance in issues related to the Association's objectives,
e) organise communications between the Association and its member institutions and other professional interest representation organisations of the money and capital market,
f) organise communications between the Association and the organisations controlling economic policy, fiscal and monetary policies, and legislators,
g) organise communications between the Association and the European Banking Federation,
h) arrange for preparing the General Meetings in accordance with the decisions of the Board,
i) arrange the convening of Board Meetings,
j) as a member of the Board, represent the Association's interests vis-ŕ-vis third parties,
k) carry out the decisions of the Board and the General Meeting.
(3) The Secretary-General shall keep the bank, business and/or official secrets that have come to his knowledge in the course of performing his duties and ensure that this obligation is observed by the staff of the executive body under his management.

Executive Body
Article 20

(1) The Association's corporate bodies, President, Vice-President and Secretary-General shall perform their duties set in these Rules with the assistance of the Association's executive body (working organisation).
(2) The Association's executive body shall be managed by the Secretary-General, or, in his absence, by the Deputy Secretary General. The Deputy Secretary-General is employed by the Association, employer rights over him are exercised by the Secretary-General.
(3) The provisions of the Labour Code shall be governing for the Association's employees.

Financial Management of the Association
Article 21

(1) The Association shall manage it finances from the annual membership fees collected, within the constraints of the budget approved by the General Meeting and in accordance with relevant laws and regulations.
(2) Membership fees and the contribution specified in Article 5 shall be determined by the General Meeting adopting the annual budget . Membership fees and contributions shall be paid within 15 days as from receipt of the notification on the relevant General Meeting resolution.
(3) Prior to compiling the report on the annual financial management of the executive body, auditors delegated by member institutions on an annual rotation basis shall check on compliance of the Association's financial management and accounting procedures with the relevant statutory regulations and resolutions of the General Meeting.

Cessation of the Association
Article 22

(1) The Association shall cease to exist if :
a) the General Meeting declares it dissolved,
b) it is dissolved by a court order,
c) it merges with another organisation,
d) it demerges,
e) its cessation is established by a court.
(2) If the Association ceases to exist without any legal succession, its property shall be distributed between the members, in proportion to membership fees paid up until cessation, after creditor claims have been met. (Section 20 of Act II of 1989; Section 63 of the Civil Code).

Legal standing of the Association
Article 23

Matters not regulated in these Rules shall be governed by the relevant provisions of Act IV of 1959 on the Civil Code and Act II of 1989 on the Freedom of Association.

Budapest, April 1, 2004.

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