1. MFT - ACI Hungary

1 1 Official BUBOR Regulation Effective from 2 May 2016 Regulation of the BUBOR Steering Committee of ACI Hungary , on the fixing procedure of the Budapest Interbank Offered HUF Credit Interest Rate. 1. Introduction As the professional organisation of FX and money market dealers working at domestic credit institutions, ACI Hungary (Hungarian Foreign Exchange Society ( MFT )) considers its main task to provide active professional support for the organisation and development of domestic financial markets. The Budapest Interbank Offered Rate (hereinafter: BUBOR), following its launch in August 1996 (1- and 3-month fixing) and its introduction in May 1997 (6-month fixing) soon became the benchmark interest rate used by banks for lending in forints in the domestic market. BUBOR, the only interbank offered HUF credit interest rate, has provided a sound basis for FX forward - futures deals, and as a reference rate it can also promote the development of the market of derivative deals (FRA, IRS, interest option transactions).

2 MFT continues to consider one of its prime tasks to ensure that BUBOR introduced at the initiative of the market and with a view to developing the market maintains its role as the reference rate for the pricing of variable-rate assets and liabilities, as well as for the settlement of stock exchange and over-the-counter interest rate derivatives. In order to effectively implement the above principles and initiatives, and in compliance with the Recommendation of the Chairman of the Hungarian Financial Supervisory Authority no. 8/2013. (IV. 29.) for market operators participating in the BUBOR fixing process, MFT in cooperation with the National Bank of Hungary (MNB) and the Hungarian Banking Association has set up the BUBOR Steering Committee of the ACI Hungary which has taken over the tasks and responsibilities of the MFT Professional Committee in administering reference rates in the market. The BUBOR Steering Committee, following the approval of this Regulation, will act as the sponsor of BUBOR being a benchmark rate of prime importance.

3 In order to give more substance to the information content of BUBOR, following the principles set forth in international recommendations and regional examples, a dealing obligation will be introduced on 1 May 2016 with respect to the 1- and 3-month BUBOR quotations, in line with the parameters described in this Regulation. Members of MFT have the right to initiate the integration of international standards and best practices in the BUBOR fixing procedure with the BUBOR Steering Committee. 2. Definitions used in the Regulation Panel bank Panel banks include all credit institutions (except for specialised credit institutions) having their registered seat in Hungary and all financial institutions operating as a branch in Hungary , which: (a) have accepted the regulation on BUBOR fixing; and (b) are ready to take part in the BUBOR fixing procedure; and (c) have issued a statement to the BUBOR Steering Committee in compliance with Annex D hereto. Active panel bank Active panel banks include all panel banks with direct Viber or BKR membership which, by accepting the regulation on BUBOR fixing, undertake to quote an interest rate for BUBOR fixing on each banking day, in compliance with Sections and Quotation 2 Quotation means the interest rate defined by the panel bank on the actual/360 interest calculation basis during the time interval specified in Section 2 of Annex A, at which rate the active panel bank would provide a business offer for a forint-denominated unsecured interbank loan to an active panel bank defined in Section 1 of Annex A on a specific Hungarian banking day with respect to the tenors specified in Section 3 of Annex A.

4 Dealing obligation Dealing obligation means the obligation described in Section 5 herein, whereby an active panel bank, on each banking day except for its individual bank holiday in terms of interest rate quotation during the time interval specified in Section 1 of Annex B, with respect to the tenors indicated in Section 2 of Annex B, and subject to the conditions and limitations set forth in Section 5 of this Regulation, is obliged to: (a) provide an unsecured interbank loan to any other active panel bank at the maximum interest rate corresponding to the rate quoted by it in the fixing procedure; and (b) accept deposit from any other active panel bank at the minimum interest rate corresponding to the rate quoted by it in the fixing procedure minus the bid-offer spread specified in Section 5 of Annex B. News agency The news agencies responsible for the primary publication of BUBOR are listed in Annex A hereto. Interest rate quotations to be disregarded In terms of quoted interest rates received by the MNB as the party assisting the BUBOR fixing procedure, on a given banking day in Hungary and with respect to a specific tenor, the following interest rates are to be disregarded: (a) the three highest and the three lowest quoted interest rates if the number of received quotations reaches 12; (b) the two highest and the two lowest quoted interest rates if the number of received quotations reaches or exceeds 8 but is lower than 12; (c) the highest and the lowest quoted interest rates if the number of received quotations does not reach 8.

5 3. The fixing procedure The interest rates incorporated in the fixing calculation are reported by the active panel banks on each Hungarian banking day except for the individual bank holiday of the panel bank during the time interval specified in Section 2 of Annex A, using the means of communication they have access to using fax if needed , to the MNB which registers and summarises the rates. The quoted interest rates shall refer to the tenors specified in Section 3 of Annex A. The MNB makes a summary of the received submissions, and omitting those to be disregarded for each tenor, calculates the BUBOR to be fixed on that day. The calculation is performed by establishing the arithmetic average of the remaining quoted interest rates for each tenor, following the rules of rounding, and rounded to two decimals. The interest rates reported by the active panel banks, used as input for the fixing calculation , and the BUBOR rates generated from them, are applicable to the deals performed on the second Hungarian banking day following the day of fixing, except for the overnight period where the trade date is the same as the performance date.

6 The storage and retention of the documents used in the course of interest rate fixing are the responsibility of the MNB-delegated members of the BUBOR Steering Committee. 4. Publishing BUBOR 3 After the BUBOR fixing procedure, the BUBOR interest rates, the names of active panel banks and their quoted interest rates are immediately issued by the MNB to the news agencies, for the purpose of publication. The historical on-line listing of these data ( in certain cases retrospectively, back to January 2004) is the responsibility of the news agencies specified in Section 4 of Annex A. The interest rates issued by the MNB to the news agencies in compliance with the provisions of Section are to be considered the officially fixed BUBOR rates. 5. Performing the dealing obligation An active panel bank shall ensure that it is accessible for all other active panel banks through the usual dealing channels (telephone, Reuters dealing, or any other channel agreed upon by the two parties) on each banking day, during the time interval specified in Section 1 of Annex B, and that it is technically ready to perform the dealing obligation.

7 Upon being contacted by any other active panel bank, an active panel bank shall ensure that there is an opportunity for the performance of the dealing obligation with respect to the tenors indicated in Section 2 of Annex B, up to at least the limit specified in Section 3 of Annex B on each banking day, during the time interval specified in Section 1 of Annex B. The interest rate on unsecured interbank loans as per Subsection a) of Section may not be higher than the rate quoted in the fixing procedure by the active panel bank providing the loan. The interest rate on deposits accepted as per Subsection b) of Section may not be lower than the rate quoted in the fixing procedure by the active panel bank accepting the deposit minus the bid-offer spread indicated in Section 5 of Annex B. The number of deals initiated by an active panel bank at any other active panel bank on a given Hungarian banking day with respect to the tenors specified in Section 2 of Annex B may not exceed the number indicated in Section 4 of Annex B.

8 An active panel bank is exempted from the performance of the dealing obligation stipulated in Section on a given Hungarian banking day, in the following cases: (a) it has reached its unsecured interbank exposure limits vis- -vis another active panel bank (or would exceed such limits as a consequence of the initiated credit). In this case, the dealing obligation pertains only to accepting deposit from the other active panel bank; (b) during the time interval spanning from the closing time as per Section 2 of Annex A applicable to the submission of interest rate quotations till the closing time of the dealing obligation as per section 1 of Annex B, news arrives that has a material impact on the Hungarian financial markets, or a substantive turbulence occurs on the markets, or a technical malfunction occurs that materially affects the financial markets. In this case, all the active panel banks will be exempted from the dealing obligation on the given Hungarian banking day.

9 In such a situation, the active panel bank detecting the problem immediately notifies the MNB, which, after evaluating the available information and adopting a decision on the issue, will notify all the active panel banks of its decision; (c) there is a material deterioration in the creditworthiness of another active panel bank. In this case, the dealing obligation pertains only to accepting deposit from the other active panel bank. 6. Establishing the circle of panel banks The list of potential active panel banks is established by the BUBOR Steering Committee, in cooperation with MNB, and the number of active panel banks that have accepted the invitation is published in Section 1 of Annex A. The BUBOR Steering Committee promptly informs MNB about the receipt of declarations issued by active panel banks confirming their acceptance of the assignment. The list is compiled based on the ranking order established by MNB by assigning 50% weight to the turnover based ranking order of all HUF interbank deposit/loan and FX swap deals, weighted by the calendar quarter tenor preceding the subject period, and 50% to the total assets reported at the end of 4 the calendar quarter preceding the subject period.

10 Specialised financial institutions do not feature in the list. For the purpose of the ranking order, in the case of market deals the MNB considers the HUF amount traded for the start value date: turnover details are consolidated at the level of credit institution groups (consequently, intra-group transactions are filtered out). In the course of compiling the list, of the credit institutions producing a consolidated financial report in compliance with the applicable legal regulations for MNB as the financial supervisory authority, only one member of the credit institutions belonging to the same group (the group member producing the highest market turnover) may be included in the list. From among the banks represented in this ranking order, and in line with their position shown in the list, the BUBOR Steering Committee in cooperation with MNB shall define the number of banks maximum the first 12 banks in the list to be requested to take part in the fixing procedure as active panel members and publish this number from time to time in Section 1 of Annex A.