Amendment to Act on Banks approved by Slovak parliament

Slovakia
UniCredit Bank Czech Republic and Slovakia, a.s., pobočka zahraničnej banky
Wed, 29/11/2017

Amendments to the Act on Banks shall improve conditions for the issuance of bonds in the mortgage market.                                                                                                                 

The latest change to the Act on Banks no. 483/2001 incorporates an updated mortgage trades concept in the Slovak market and will bring new investment opportunities.

Based on the newly introduced covered bonds concept, it will no longer be possible to issue currently existing mortgage and municipal bonds to cover mortgage trades and loans. Only banks residing in the Slovak Republic will be allowed to issue cover bonds. The types of assets which can be used to cover the bank’s obligations arising from the cover bonds has been significantly expanded to include deposits in the National Bank of Slovakia, ECB, other commercial banks and to derivatives so called liquidity cushion assets.

The amendment also affects Act no. 747/2004 on the supervision of the financial market by implementing future intervention powers of the regulator National Bank of Slovakia (NBS), which allow the restriction or ban on the admission, sale or distribution of financial products in the market (according to art. 17, EU regulation 1286/2014 PRIIP and art. 42, EU regulation 600/2014 MiFIR).

The maximum fine imposed by NBS for breach of financial consumers rights and protection increases from EUR 700,000 to EUR 1 million.

This measure incorporates changes to further legal acts valid in Slovakia such as Act on bonds, Act on Income tax (tax bonus for young people), Act on consumer’s loans, Act on housing loans, Social insurance Act and Act on bankruptcy, accordingly.

The new rule will become valid on 15 December, however some of the articles will come into force on 1 January 2018, 30 April 2018, 1 May 2018, 1 July 2018 and/or on 1 January 2019.

 

Maria Gelingerova
Relationship Manager
Global Securities Services Slovakia
maria.gelingerova@unicreditgroup.sk