Overall Legal Framework
Pfandbrief Act
The Act reorganising Pfandbrief legislation, which took effect in 2005, expands the business opportunities open to German credit institutions regarding the issuing of Pfandbriefe. In doing so the high standards of the German Pfandbrief were upheld. This reform was extraordinarily successful. The German Pfandbrief still represents the biggest segment of the European and global covered bond markets.
The first amendment to the Pfandbrief Act, "Act to Further Develop the Pfandbrief Law," took effect on March 26, 2009. The amended version of the law further improved the high quality of the Pfandbrief. A new requirement was introduced: Pfandbrief issuers now have to maintain a liquidity reserve of 180 days within the cover pool.
The Pfandbrief already set standards for transparency in the past. The amendment improves them further. The presentation of the maturity structures in the cover pool was refined.
Cooperatives Act
The Cooperatives Act defines the legal framework for all cooperatives formed for the purpose of making purchases or doing business. It initially took effect in 1889 and the most recent major amendment to the Act took place in August 2006.
