05 June 2026
Schoenherr publication
czech republic
to the point: financial regulation | 5/2026
Welcome to our to the point newsletter. Every month, we look back at the most relevant developments in financial regulation in the CEE region.
In this edition, you will get a mix of updates:
- The European Parliament approved the new mandatory EU Foreign Investment Screening Regulation, with financial services squarely within scope. The Regulation requires all Member States to operate a screening mechanism for investments by non-EU-controlled entities in sensitive sectors, including financial services, defence, semiconductors, AI and critical raw materials. It introduces streamlined procedures, mandatory cooperation between national screening bodies and the Commission, and – importantly – captures intra-EU transactions where the ultimate owner is based outside the EU. The Council must still formally adopt the text, after which it applies 18 months later. Several CEE Member States either lack a screening regime or operate narrow ones; financial-sector M&A and greenfield investment by non-EU ultimate owners will face mandatory review, with material deal-structuring implications for entities across the region
- The European Banking Authority (EBA) has published final amendments to its Guidelines on the application of the definition of default, easing factoring treatment and confirming the 1 % NPV restructuring threshold. The amended guidelines extend the specific past-due treatment for individual invoices under non-recourse factoring from 30 to 90 days, reducing incorrect default classifications in trade-finance portfolios. The EBA also confirms that the existing 1 % Net Present Value threshold for recognising default in distressed-debt restructurings remains appropriate, providing regulatory certainty for banks managing non-performing loans. The amendments apply from 1 January 2027, leaving banks roughly seven months to update internal credit-risk policies, IRB models and default-detection systems. CEE banks with significant factoring volumes, trade-finance exposures or active NPL workouts – a feature of much of the region – should revalidate their default identification frameworks against the new thresholds and consider the impact on Pillar 1 risk-weighted assets.
- The European Parliament's ECON Committee endorsed the final PSD3/PSR trilogue texts. The package introduces mandatory payee-name verification ("confirmation of payee") for all credit transfers, a new refund right for victims of PSP-impersonation fraud, a merged authorisation regime for payment and e-money institutions, and direct prudential and conduct obligations for payment scheme operators and technical service providers. CEE PSPs, banks and acquirers should already be planning reauthorisation, payee-verification rollout and revised fraud-liability workflows.
- The European Insurance and Occupational Pensions Authority (EIOPA) has launched the consultation on minimum common EU standards for Insurance Guarantee Schemes, a long-awaited follow-up to IRRD Article 98. Responding to a Commission Call for Advice, EIOPA proposes targeted harmonisation of IGS coverage triggers, funding conditions and policyholder-claim mechanisms, while preserving national flexibility on institutional structures. The draft technical advice notes that insurance is the only major EU retail financial sector still without minimum harmonised guarantee-scheme standards. Final advice is due to the Commission by 31 August 2026, and responses are invited until 26 June 2026. Several CEE Member States operate either no IGS or limited schemes. The proposed minimum standards will require legislative work and supervisory mobilisation across the region and may alter cross-border life and non-life distribution structures.
- The Anti-Money Laundering Authority (AMLA) published its 2027 direct-supervision selection package, moving closer to identifying the credit and financial institutions it will supervise directly from 2028. The package contains standardised reporting templates, interpretative notes and a methodology enabling national supervisors to identify obliged entities operating in six or more EU Member States that may qualify for direct supervision by AMLA. National AML supervisors must submit the underlying data by 15 August 2026, and AMLA expects to publish the provisional list of eligible entities by end-September 2026. A public webinar walkthrough is scheduled for 10 June. CEE banking groups, payment institutions and crypto-asset service providers with cross-border footprints should review the eligibility criteria now, including for any non-EU parents, and prepare to engage with their national AML supervisors during the data-collection phase.
- The Czech Financial Analytical Office has updated its list of high-risk third countries. Following recent changes, Kuwait and Papua New Guinea have been added to the FATF grey list. The European Commission has also expanded its list of high-risk third countries to include Bolivia and the British Virgin Islands. At the same time, Burkina Faso, South Africa, Mali, Mozambique, Nigeria and Tanzania have been removed from the list and are no longer considered high-risk third countries. Additionally, because the Russian Federation has been formally included on the high-risk third-country list under Commission Regulation 2016/1675, the previous guidance on how to treat Russia as a high-risk third country has been withdrawn as it is now considered unnecessary.
- Central Banking coverage of the MNB sSyRBA series of government decisions published in Issue 53 of the Hungarian Official Gazette on 18 May 2026 initiate comprehensive reviews of the Act on Notaries (Act XLI of 1991), the Act on Judicial Enforcement (Act LIII of 1994) and the Act on Bankruptcy and Liquidation Proceedings (Act XLIX of 1991), as part of a broader reform agenda of the newly elected Hungarian Government. The reviews, due by mid-July 2026, are expected to result primarily in procedural changes. Practitioners and businesses with exposure to Hungarian notarial proceedings, enforcement matters or insolvency and restructuring cases should monitor the legislative developments closely, as the reforms may have a material impact on procedures and stakeholders' rights.
- Poland's Sejm passed the MiCA implementation bill on 15 May 2026 at the third attempt, granting the Polish financial regulator, KNF, supervisory authority over crypto-asset service providers. The law transposes MiCA ahead of the EU's July 2026 deadline and gives KNF powers to authorise CASPs, suspend offerings, freeze websites and accounts linked to unlicensed activity, and impose fines of up to PLN 25m. President Nawrocki had vetoed two earlier versions; the government text has now passed but still faces presidential challenge. Polish crypto firms on the legacy register risk losing grandfathering if the law is not signed and in force ahead of the MiCA deadline.
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Kristýna
Tupá
Counsel
czech republic