In October 2015, the Budapest Stock Exchange (BSE) introduced a new sanction, making it possible to decategorise listed issuers who commit serious misconduct or violation by pulling them from their original share classes. This measure became necessary because other sanctions applied in the past did not have enough of a deterrent effect for some issuers and failed to drive them towards compliance. By breaching their obligations, these companies have a negative impact, not only on the reputation of compliant issuers, but also on the stock exchange as an institution. Therefore, in order to protect investors’ interests and improve the compliance of listed companies, BSE decided to decategorise the shares of EST MEDIA Vagyonkezelő Nyilvánosan Működő Részvénytársaság (EST MEDIA Holding Public Limited Company), TR Investment Nyilvánosan Működő Részvénytársaság (TR Investment Public Limited Company) and TWD Investments Tanácsadó és Kereskedelmi Nyilvánosan Működő Részvénytársaság (TWD Investments Consulting and Trading Public Limited Company) from other shares with effect from 13 January 2017.

The companies currently sanctioned will spend at least 6 months decategorised from other shares, and this period may be extended by further 6 months any number of times. This measure has no maximum time limit and does not automatically lead to the sanction of delisting. When decategorisation is applied, the issuer’s securities are not only pulled from their original share class, but also the trading model applicable to them will be revised, meaning that it changes from “continuous trading with auctions” to “auction trading”.

In order to make investors aware, the securities of decategorised issuers are clearly distinguished on BSE’s website. Decategorisation of stocks may be lifted and the original trading model restored at the end of the aforementioned 6-month (or extended) period if the issuers concerned meet all the following required conditions: remedy the breach(es) that led to the sanction, receive no further sanctions from either the BSE or the National Bank of Hungary, and have no overdue charges or fines payable to BSE. When all these conditions are met, issuers that were in the Standard or T classes prior to the sanction will have their original classes restored.