Problems With The Security Trustee Regulation?

The fact that the Hungarian legal system has now at last also recognized the concept of trust has been widely praised. The new Hungarian Civil Code, which entered into force on 15 March 2014, regulates the trust generally and also provides specific rules to the security trustee structure.

In international financings, if a syndicate of banks provides funds to the debtor, it is usually the security trustee which, being a member of the syndicate, holds in trust the security interest(s) established over the assets of the debtor on behalf of the other syndicate members.

At first glance, the Hungary's security trustee concept appears to function very similarly to the widely known concept that is generally utilized in international financings. Undoubtedly, such similarity was also intended to be achieved. Pursuant to the new Hungarian Civil Code, the security holders [sic!] may appoint in the security document or otherwise in writing any person or entity, either amongst