Belgian covered bond legislation could be approved by Friday after proposals for the legal framework were introduced into parliament last week and placed on the agenda for the last plenaries before the summer recess begins, according to a person familiar with the project.

A draft covered bond law and a draft mobilisation law, which together make up the proposed legal framework, were introduced in the Belgian parliament on Monday of last week (9 July), and are on the agenda for a plenary in the chamber of representatives tomorrow (Wednesday) and for a Senate plenary on Thursday, according to the Belgian parliament’s website.

The covered bond legislative project was also discussed at a meeting of the finance commission of the lower house yesterday, according to a person familiar with the initiative, with a meeting of the parallel Senate commission due to be held today (Tuesday).

The recent action on the legislative project is understood to reflect a change in gear after stakeholders heeded government calls for swift action and political parties reached an agreement that allowed the covered bond law initiative to reach a final stage before the summer recess.

The minister of finance is said to be planning to provide more information about the covered bond legislative project on Wednesday in the chamber of representatives, with the possibility that the legal framework will have been passed by Friday, the last day before the federal parliament goes into a summer recess lasting until the end of September.

The draft covered bond law, according to Allen & Overy lawyers, introduces a legal framework for the issue of covered bonds by Belgian credit institutions implementing the requirements of Article 52 of the UCITS Directive, while the draft mobilisation law represents a draft law aimed at addressing certain legal impediments to the transfer of credit claims and to remove potential claw-back concerns as regards the registration of cover assets in the cover register for a special estate.

The draft laws will need to be further implemented by royal decrees and by National Bank of Belgium regulations on covered bonds, said the lawyers.