A decision by the Polish ministry of finance on Tuesday paves the way for a long awaited revision of the country’s covered bond legislation to be passed to parliament, with the Polish FSA separately also approving changes.

The Polish mortgage credit industry has been pushing for changes to the country’s covered bond legislation for some time, with rating upgrades and lower funding costs among the hoped-for benefits. The development of long term funding to meet new regulatory requirements is also a motivation behind the drive for a revised covered bond framework.

Agnieszka Tułodziecka, president of the Polish Mortgage Credit Foundation, told The Covered Bond Report that the Polish ministry of finance approved “assumptions for changes to the covered bond law” on Tuesday, and that the document has been sent to the cabinet for approval. With the latter largely expected to be a formality, the decision by the ministry of finance allows for the targeted revised legislation to be drafted and then passed to parliament.

Separately, the Polish financial supervisory authority, Komisji Nadzoru Finansowego (KNF), on Tuesday approved amendments to two regulations on mortgage covered bond issuance, concerning aspects such as valuation procedures, technical details of the transfer of loan portfolios to mortgage banks, and procedures relating to the covered bond register.

Tułodziecka welcomed the moves, especially the ministry of finance decision.

“It is very good news,” she said. “We are now closer to being able to direct draft legislation to parliament and go through the law-making process,” she said. “I assume this whole process will be finished by the end of the year.”

She said that the changes approved by the financial supervisory authority will simplify and make more efficient various processes associated with covered bond issuance, especially the pooling and transfer of mortgage loans.