Pfandbrief Act amendment marks milestone
The German Bundestag (Lower House) today passed the German CBD Implementation Act, which transposes the European Covered Bonds Directive into German law, thereby driving the European harmonization of covered bonds forward. The main impetus behind this harmonization has been generated by the German Pfandbrief Act.
The legislative package envisages an extensive amendment of the Pfandbrief Act and ensures that German Pfandbriefe will continue to enjoy EU privileges. The vdp explicitly welcomes the CBD Implementation Act, as it is closely modeled on European requirements and contains important improvements and clarifications. “Besides bringing German law into line with EU legislation, the Pfandbrief Act amendment sets forth important rules on building insurance in particular as well as on maturity extension, which the vdp has advocated for quite some time,” vdp Chief Executive Jens Tolckmitt pointed out.
National legislators have until July 2021 to anchor the European regulations in national law. The second reading in the German Bundesrat (Upper House) is scheduled for May 7, 2021. With that, Germany is likely to become the first country to complete the relevant parliamentary process.