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Poland changes law on bonds

The Polish legislature has introduced corrections to the amendments to the Polish Law on Bonds, which may come into force in 2001. The legislative process marks an important step towards the liberalization and development of the bond market in Poland.

The most important aspects of the amendments are:

  • broadening the category of entities entitled to issue bonds by including financial institutions of which Poland or the National Bank of Poland is a member, or of which at least one OECD member state or its central bank is a member;

  • the liberalization of bond issuance principles by extending the right to issue bonds to entities which have been in existence for less than 3 years

  • allowing for the issuance of all types of bonds in electronic form, thus introducing the possibility of creating a balance in the legal status of bonds in private and public trading;

  • the adoption of an open catalogue of forms of bond securitization;

  • the introduction of detailed regulations on the issuance and conversion of convertible bonds, making the conversion process faster and clearer;

  • the introduction of a new type of bond ­ a revenue bond, which can be issued only by local communities as well as companies appointed to provide public services.

The final version of the amendments has not yet been adopted. Nevertheless, the legislative process approaches its completion. As a consequence, the Polish bond market should become more open to new foreign bond investors. All amendments are in compliance with regulations of the European Union.

Ludomir Biedecki

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