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Online debt exchange market – the concept

DEBT‐MARKET is an online debt exchange market operating in the European Union connecting sellers and buyers on the market of overdue debts and debts not yet matured.

By bringing market players together at the same spot and time this virtual system enables both buyers and sellers to improve their efficiency and realize savings.

Solution

Our system allows to manage debts and related documents online.

Added value

Debt value increases by way of competition at the exchange and factoring market.

Market conditions

Transparent, secure online platform easily accessible for contracting parties.

Virtual confidential room

Guaranteed legal, secure transfer of data. Protected database.

Analysis

We save resources for our partners by evaluating and categorizing information.

Prudency

The identity of actors and the amount and conditions of the transaction are set and clear.

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CONTACT

Our history

DEBT-MARKET – Online debt exchange market

The system of DEBT-MARKET, “Számla és Követeléspiac” (Market for bills and debts) operating exclusively in Hungary up till now was launched in 1999.

November 2009 DEBT-MARKET Kft. took over the exchange, partners and experiences developed by and in line with the methodology of the former “Számla és Követeléspiac”.

THREE-PILLAR SYSTEM OF GUARANTEE

  • Access exclusively with identification key
  • Secure IT system

Following the conclusion of the contract we provide our partners with a user name and password. With these credentials partners can access the exchange at debtmarket.hu. It is important to highlight that the system is completely secure and exclusively accessible to our contractual partners.

  • Special attention is paid to information security as the system handles business confidential data.
  • We continuously monitor the system’s legal operation, the protection of confidential business information, the realization of fair competition and compliance to data management and information security provisions.

Subsection 1 and 1 of Section 161 of Act CCXXXVII of 2013 on Credit Institutions and Financial Enterprises provides for the three cases in which bank secrets may be legally disclosed to third parties. According to point c) of Subsection 1 of Section 161 of Act CCXXXVII of 2013 bank secrets may be disclosed to third parties if so facilitated by the financial institution’s interests for selling its receivables due from the client or for enforcement of its outstanding claims. Financial institutions enter the debt and relating information into DEBT-MARKET’s online database with the purpose of selling thus data of the debtor qualifying as business confidential may be legally disclosed to users entitled to buy debts in compliance with data protection directives.

The professional association unifies the needs of companies present in the system. The aim of this is to ensure competitive sales of debts in line with fair market behaviour, to qualify the operation of DEBT-MARKET, to raise the awareness of users to the benefits of the system and to point to eventual shortcomings and request the operator to rectify these.

About the concept of DEBT-MARKET in detail

DEBT-MARKET’s concept: by bringing market players together at the same virtual spot and time the system enables both buyers and sellers to improve their efficiency and realize savings.

The sellers’ side of the bilateral online database is made up of lenders whereas the buyers’ side of factoring companies licensed by the Hungarian National Bank. Users of the concentrated market have the opportunity to offer their matured receivables and claims (bank loan, leasing, overdue utility bills, service fee, commodity loan, student loan, credit card debt, etc.) against companies and private individuals under winding up, liquidation or insolvency proceeding for sale as single debt or, to further the possibility of sales, in the form of bundled debts.

DEBT-MARKET’s most recent feature launched in 2010 is the provision of sales of non-matured bills and receivables. Via the system sellers enjoy the benefits of full market competition, prices may be compared and they can reach the best offers. The seller receives quick feedback from the market players thus he can make the most favorable decision.

On the buyers’ side of the market operated by DEBT-MARKET most of Hungary’s factoring companies are represented whereas on the sellers’ side any of the economic sectors can be found. The system mediates debts offered for sale to factoring companies. All actors of the debt’s buying sector are represented on the market. Factoring companies receive information on the whole sales market. Due to less efforts and time spent on accessing and processing information, the efficiency of these companies is improved significantly.

Sales via DEBT-MARKET

Sales of debts on this market may take place in two ways.
One of them is tendering, the other is the auction developed as a new feature in 2006.

Basic information on the debt bundle offered for sale is posted by the seller on DEBT-MARKET for a certain period of time. Till the expiration of the announcement factoring companies send proposals for the debt bundle which are then analyzed and responded to by the seller either by accepting or declining them by clicking the respective buttons.

Within the framework of DEBT-MARKET it is possible to sell debts through auction. During consultations market players expressed the need to have a strong price competition which makes prices public. According to this, just like at an auction house, we provide a platform for bidding enabling a public price competition. The system automatically invites buyers having access to make their bids. In case of an auction basic information of the bundled debt are presented in the system for about 7 days and the date and time of bidding is set to the last day of announcement in a time span of 30 minutes. During the preceding 7 days potential buyers have the opportunity to study parameters of the bundle before the auction. During the auction the starting and closing hour of the bid must be entered thus the debt is to be acquired within this period. The advantage of the auction is that while traditional tendering buyers are not aware of each others’ offers, during the auction prices become public. Depending from the intentions of the seller there is the possibility of setting a starting auction price too. If the seller exercises the right to set a starting price, only bids exceeding the set starting price can be placed. During the auction bids can be raised by the set minimum bid increment. Throughout the auction the number of bids already made for the debt bundle as well as the highest price which the next bid must exceed is visible for each of the bidders. The seller reviews every bid and uses the buttons “accept” or “decline” to respond to the bidding companies. The seller must make a decision within 8 (eight) days and must respond to buyers through the system in the above described manner.

Japanese bidding

Priority bidding

Digital bidding

Buy-it-Now price

Following the conclusion of the contract our partners may choose any sales method. According to our experience companies tend to use both tendering and auction depending from the nature and parameters of the debt bundle.

MARKET OF NON-MATURED DEBTS

Since February 2010 market players have the opportunity to sell and buy non-matured debts as well.

Sellers can request indicative offers from buyers respectively their accounts relating to their contracts offered for sale. The sales offer is usually valid for a week at longest.

The buyer may make his indicative offer on an interest rate or factoring fee base which, after comparison with other offers received, can be accepted or declined by the seller. In case the seller accepts an offer, he is provided with the information on the bidder so that the parties can conclude a contract.