Au Point: Finances | Q2 2021 – Finance and Banking
Worldwide: Au Point: Finances | Q2 2021
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Editorial | EEC
While there is now a light at the end of the pandemic tunnel in CEE and SEE, the second quarter of 2021 again brought many changes and challenges to the region’s financial sector. Sustainability is becoming an increasingly important factor, as evidenced by some metrics we look at in this edition. As growth has returned and green energy financing (also under the banner of sustainability) is driving the market in Romania and Hungary, the financial sector is also forecasting consolidation in Slovenia and Hungary.
The implementation of the Restructuring Directive continues across the region, but in this edition we have instead focused on trends already underway (such as banking regulatory changes in Croatia and Serbia or the digitization of the securities market. in Austria), since we will soon devote an edition to restructuring, which we hope will become a major market driver in the years following the end of the pandemic.
In this edition, the focus is on the changes and challenges that affect the financial industry on a daily basis. I think you will find these brief reports enlightening and that they will encourage you to contact us to learn more about any of these topics.
Regulators Consider Regulatory Changes for Non-Bank Financing of Sustainable Businesses | Croatia
- The Council of HANFA, the Croatian financial services supervisory agency, recently discussed proposed regulatory changes which should strongly encourage alternative financing of the economy and prepare listed companies for new ESG reporting.
The changes should lead to a liberalization of the regulatory environment mainly for AIFs (easier licensing and declaration, lower fees, etc.). HANFA is also considering allowing certain AIFs to grant loans. The regulator’s main concern is that the value of AIF assets in Croatia represents only 1.1% of Croatian GDP, compared to an average of 48.4% in other EU member states.
In addition, HANFA has recently prepared National Guidelines for ESG Reporting, which define the timelines and modalities for the publication of non-financial reports, while also providing additional guidance on regulations and non-financial reporting standards.
New Legislation on Digital Global Certificates | Austria
- Austrian securities deposit law amendment takes digitization step the Austrian securities market by introducing digital global certificates for bonds and investment certificates. Due to the change, issuers of securities will no longer be required to produce, sign, obtain counter-signatures and issue a physical global certificate in paper form to the Austrian central securities depository (OeKB CSD GmbH). A digital global certificate is created by an electronic data record at OeKB CSD GmbH, which will be responsible for the technical implementation of the digital global certificate, based on the information communicated electronically by the issuer. The shares of a digital global certificate will have the same rights and functions under securities law as the shares of a physical global certificate.
Angelika Fischer | Viktoria Stark
Special situations | Poland
- The Court of Justice of the EU (CJEU) recently ruled on Polish foreign currency loans. Many Poles took out such loans denominated in Swiss francs in the 2000s. After the 2008 crisis, they struggled with installment payments, as the value of the Polish zloty fell. The CJEU said Polish courts should decide how to deal with unfair contract terms. In May, the Polish Supreme Court was due to render its landmark decision on such contracts, for example whether to cancel them, but the decision has (again) been delayed and the court is now awaiting opinions from, among others, the Central Bank Polish and the regulator. The decision could impact Polish lenders and lead to out-of-court settlements with clients.
Paula Weronika Kapica
Green April | Austria
- On April 21, 2021, the European Commission published a sustainable financing and reporting dossier as the next stepping stone towards the European Green Deal. It consists of a proposal for a delegated act on EU climate taxonomy, which is to apply from 1 January 2020 and defines technical selection criteria for determining whether an economic activity in certain sectors such as bioenergy, forestry, hydrogen and hydropower can be considered to contribute substantially to the environmental objectives of mitigation and adaptation to climate change. The Commission has also presented a proposal for a Directive on Corporate Sustainability Reporting (CSRD) which revises the Non-Financial Reporting Directive (Directive 2014/95 / EU) and is expected to apply from January 2022. The CSRD aims to extend both the scope of listed companies required to report sustainability information and the scope of the information to report (among others the impact of a reporting company on global supply chains). Other proposals for delegated acts contained in the package aim to integrate sustainability considerations into (among others) the design of financial products, investor suitability assessments and asset management. This legislative package should be completed in time by certain energy sectors and environmental objectives which are not yet covered by European taxonomy. You can read more about this in our legal overview.
Market | Serbia
- Serbian law on financial guarantees: love at first sight? The adoption of the law on financial guarantees (FCA) in 2018 was widely seen as a great addition to the Serbian financial law infrastructure. Yet more than two years later, the full potential of the FCA has largely remained untapped. The main reason lies in its limited scope in terms of counterparties covered. Although the FCA has provided adequate protections for close-out netting in financial transactions between eligible counterparties (i.e. primarily sovereign and financial sector entities), it still does not protect close-out netting in financial transactions. transactions involving ordinary legal persons. Perhaps the time has come for the Serbian lawmaker to consider appropriate updates to the FCA so that market players can give it another chance.
Renewable energy projects: is a second wave coming to Romania? | Romania
- It is well known that Romania must accelerate the deployment of renewable projects to reach its 30.7% target for 2030. Some 6 GW of new wind and solar photovoltaic capacity are to be installed over the next 10 years. Our new publication “renew Romania” is online. Read it to find out what is happening in the renewable energy market and the financing of renewable energy projects in Romania. In summary, we believe the “second wave” is already here. It will largely be up to all stakeholders to shape this wave into one that will energize the sector and benefit everyone. There is little sense in pointing in one direction. The regulator needs good ideas and the support of sponsors and funders, who in turn cannot work wonders without the commitment and proper investments of sponsors etc. This will require a joint effort and we are optimistic that a number of avenues have been identified and need to be pursued. In the meantime, as our experience in 2020 and the first quarter of 2021 has already shown, where there is a will, there is a way. We will continue to support our customers and market initiatives to make this second wave a success for as many stakeholders as possible.
Q1 2021 review: getting you back on track? | Slovenia
- Developments in the first quarter of 2021(as summarized by the Bank of Slovenia) can, if viewed through somewhat pink glasses, be seen as the first symptoms of a banking sector transition to a post-pandemic period. On the transactional side, activity seems to be picking up, even if there are still few large transactions. On the business lending side, the main drivers of the trend are an increase in M&A / investment activity (particularly in IT / newtech and infrastructure) and an overall improvement in the economic outlook (leading to large-scale refinancing). Along with this trend, the banking landscape itself envisions an interesting potential change, with one of the biggest players changing ownership. Likewise, shareholders of bank stocks are keeping an eye on the Bank of Slovenia, which will either allow a dividend distribution for 2020 or decide to extend the current freeze (which will expire on September 30, 2021), postponing payments until 2022. .
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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