The Act Amending the Bonds Act introduces significant changes to the banking sector. For example, a new group of entities is authorized to issue bonds under Poland's obligations towards international institutions on the liberalization of capital flow (Article 2.4). The new group comprises of financial institutions, namely (i) the Republic of Poland, the National Bank of Poland or at least one OECD state or its central bank or (ii) an institution with which Poland has an agreement regulating the operation of such an institution in Poland and containing appropriate provisions concerning the issuing of bonds.

A further amendment concerns the deletion of Article 2(2) of the Bonds Act. This clause refers to the Banking Law Act and concerns the admissibility of bonds issued by banks. This issue became particularly important when the Banking Law Act of August 29 1997 came into force. The act was introduced without the necessary alignment with other legislation, and raised doubts concerning the consistency of the two acts. On the matter of issuing of bonds by banks, the Banking Law provided a different definition of the procedures for issuing banking securities to the Bonds Act and of the important elements of their content. This meant that a bank had no legal means of issuing bonds in accordance with the provisions of the Bonds Act.

For further information on this topic please contact Jaroslaw Miller at CMS Cameron McKenna by telephone (+48 22 520 5555) or by fax (+48 22 520 5556) or by e-mail ([email protected]).

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