At the invitation of the Croatian Ministry of Finance in April 2006, Convergence in collaboration with EBRD and KfW has helped frame the first-ever public-private partnership for the preparation of Croatia’s securitization law, under the oversight of a steering committee created by the Minister of Finance, chaired by the Ministry of Finance with Croatian National Bank, Croatian Securities Commission, Croatian Banking Association, KfW, EBRD and Convergence participation.
The first, and perhaps most important, step has been to design the architectural and governance arrangements for the project. Helping assemble a multinational team of legal experts to prepare an annotated terms of reference for the proposed law has been the second main step.
Convergence’s specific contribution has been to establish the function of Independent Legal Advisor, supporting the Steering Committee in the consideration of the legal documents that, from time to time, will be sent for its consideration.
After commenting the terms of reference, and based on Steering Committee discussions, the Independent Legal Advisor prepared a summary document for market consultations. Ministry of Finance launched consultations with a press conference.
Building on the market consultation feedback (including from the European Securities Forum) and using international comparative information compiled by a Convergence legal expert, the Independent Legal Advisor prepared drafting guidelines for the legal drafting team, composed largely of lawyers appointed by public institutions, with support from Arhivanalitika, a local financial advisory firm.
The Independent Legal Advisor issued two additional opinions, in December 2006 and in June 2007, on successive draft laws prepared by the legal drafting team. Reflecting the practical constraints experienced by the legal drafting team in drafting the law, the Independent Legal Advisor has also updated the drafting guidelines that will serve as benchmark as the final draft law begins its official enactment process.To facilitate enactment review, project coordinator Arhivanalitika has benchmarked the draft law against market feedback and Independent Legal Advisor opinion. Further changes in the draft law are possible before final enactment.
In February 2006 Press
Release, Prof. Cesarini discussed his Report on the role of the Italian Banking
Association in promoting financial dvelopment in Italy at a seminar hosted by
the Board of the Croatian Banking Association.
In parallel, the Croatian Banking Association has sponsored the preparation of a Regulatory Impact Assessment of the proposed law. The exercise has helped authorities better assess the potential magnitude of the new financial flows generated by securitization, particularly with respect to the foreign indebtedness situation.
Preparing a draft law in a public-private context is an elaborate process. But it is also a process that makes the best use of available expertise in the public and private sector alike, both domestically and internationally.
Convergence is ready to support the creation of an SPI Croatia structure if local public-private stakeholders wish to create an institutional form to expedite financial sector modernization.