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S.I. No. 576/2021 - European Union (Covered Bonds) Regulations 2021

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the making

this Statutory Instrument was published in “Iris Oifigiúil”

9th November, 2021. I, PASCHAL DONOHOE, Minister for Finance, in exercise

the powers conferred on me by section 3

the European Communities Act 1972 (No. 27

1972) and for the purpose

giving effect to Directive (EU) 2019/2162

the European Parliament and

the Council

27 November 20191 , hereby make the following regulations: Citation and Commencement 1.

(1)These Regulations may be cited as the European Union (Covered Bonds) Regulations 2021.
(2)These Regulations come into operation on 8 July
  1. Definition
  2. In these Regulations, “Principal Act” means the Asset Covered Securities Act 2001 (No. 47

2001). Amendment

section 3

Principal Act 3. Section 3

the Principal Act is amended— (a) in subsection

(1)— (i) by the insertion

the following definitions: “ ‘covered bond programme’ means a programme

issues

asset covered securities— (

  1. a)authorised under section 14A, and (
  2. b)in compliance with this Act; ‘Covered Bonds Directive’ means Directive (EU) 2019/2162

the European Parliament and

the Council

27 November 20192 ; ‘extendable maturity structure’ means a mechanism which provides for the possibility

extending the scheduled maturity

asset covered securities for a pre-determined period

time and in the event that a maturity extension trigger, within the meaning

section 29A (including that section as modified in accordance with section 41B) or section 44A, occurs; ‘EBA’ means the European Banking Authority; ‘primary assets’ means— (a) in respect

the cover assets pool

a designated mortgage credit institution, mortgage credit assets, (b) in respect

the cover assets pool

a designated commercial mortgage credit institution, commercial mortgage credit assets, and (c) in respect

the cover assets pool

a designated public credit institution, public credit assets; ‘tier 1 creditor’, in relation to a designated or formerly designated credit institution, means all or any

the following persons: (a) the holder

an outstanding asset covered security issued by the institution; (b) a person (other than the holder) who has rights under or in respect

any such security by virtue

any legal relationship with the holder; (c) a person with whom the institution has entered into a cover assets hedge contract, but only if the person is in compliance with the financial obligations imposed under the contract; ‘tier 2 creditor’, in relation to a designated or formerly designated credit institution, means all or any

the following persons appointed in respect

the institution: (

  1. a)a cover-assets monitor; (
  2. b)a manager;”, (
  3. ii)by the substitution

the following definition for the definition

“preferred creditor”: “ ‘preferred creditor’ means all or any

the following persons: (

  1. a)a tier 1 creditor; (
  2. b)a tier 2 creditor;”, (iii) in the definition

“credit institution”— (I) by the deletion

paragraph (c), and (II) by the substitution

the following paragraph for paragraph (e): “(e) a credit institution within the meaning

point

(1)

Article 4

(1)

Regulation (EU) No 575/2013, that is authorised under Article 14

Council Regulation (EU) No 1024/2013;”, and (iv) by the deletion

the definitions

“article 22

(4)securities” and “super-preferred creditor”, and (b) by the insertion

the following subsection after subsection

(7): “
(8)A word or expression which is used in this Act and which is also used in the Covered Bonds Directive has, unless the context otherwise requires, the same meaning in this Act as it has in the Covered Bonds Directive.”. Amendment

section 4

Principal Act 4. Section 4

the Principal Act is amended— (a) by the deletion

subsection

(4), and (b) in subsection
(8), by the deletion

the definition

“securitised”. Amendment

section 5

Principal Act 5. Section 5

the Principal Act is amended by the deletion

subsection

(2). Amendment

section 6

Principal Act 6. Section 6

the Principal Act is amended by the substitution

the following subsection for subsection

(1): “
(1)The following assets (other than such assets that comprise any pool hedge collateral) are substitution assets for the purposes

this Act: (a) exposures to credit institutions that qualify for credit quality step 1 or credit quality step 2, where those exposures are in the form

short-term deposits referred to in point (c)(i)

Article 129

(1)

Regulation (EU) No 575/2013; (b) exposures to credit institutions that qualify for credit quality step 3, where those exposures are in the form

short-term deposits referred to in point (c)(i)

Article 129

(1)

Regulation (EU) No 575/2013; (c) any specified kind

property that is for the time being designated by an order made under subsection

(3)(a) to be a substitution asset.”. Amendment

section 9

Principal Act 7. Section 9

the Principal Act is amended by the insertion

the following subsection after subsection

(3): “
(4)The Authority is designated as the competent authority for the purposes

public supervision

asset covered securities referred to in Article 18

(1)

the Covered Bonds Directive.”. Cooperation an disclosure obligations 8. The Principal Act is amended by the insertion

the following sections after section 11: “Cooperation obligations 11A.

(1)The Authority shall cooperate closely with— (a) the competent authorities in other Member States performing the general supervision

credit institutions in accordance with relevant European Union law applicable to those institutions, and (b) the resolution authority concerned in the event

the resolution

a credit institution issuing covered bonds.

(2)The Authority shall cooperate closely with competent authorities designated in other Member States for the purposes

Article 18

(2)

the Covered Bonds Directive, including by providing such competent authorities with any information which is relevant for the exercise

those other authorities’ supervisory tasks under the provisions

national law

the Member State concerned transposing the Covered Bonds Directive.

(3)Without limitation to the generality

subsection

(2), the Authority shall communicate— (a) all relevant information at the request

a competent authority referred to in subsection

(2), and (b) on its own initiative, any essential information to such a competent authority.
(4)The Authority shall, for the purposes

the Covered Bonds Directive, cooperate with the EBA or, where relevant, with the European Supervisory Authority (European Securities and Markets Authority), established by Regulation (EU) No 1095/2010

the European Parliament and

the Council.

(5)In this section ‘essential information’ means information which could materially influence the assessment

the issue

covered bonds in another Member State. Disclosure obligations 11B.

(1)The Authority shall publish the following information on its

ficial website: (a) the text

this Act and any other Act relating to the issue

asset covered securities; (b) the text

statutory instruments, if any, relating to the issue

asset covered securities; (c) the text

administrative rules and general guidance, if any, adopted in relation to the issue

asset covered securities; (d) a list

designated credit institutions; (e) a list

asset covered securities that are entitled to use the label ‘European Covered Bond’; (f) a list

asset covered securities that are entitled to use the label ‘European Covered Bond (Premium)’.

(2)A designated credit institution shall, when it issues asset covered securities entitled to use the label ‘European Covered Bond’ or the label ‘European Covered Bond (Premium)’ notify the Authority as soon as practicable after such issue that it has issued such asset covered securities.
(3)The information published in accordance with subsection
(1)shall be sufficient to enable a meaningful comparison

the approach adopted by the Authority and the approach adopted by competent authorities designated pursuant to Article 18

(2)

the Covered Bonds Directive by Member States other than the State.

(4)The information published in accordance with subsection
(1)shall be updated to take account

any changes to that information.

(5)The Authority shall notify the EBA on an annual basis

— (a) the list

designated credit institutions referred to in subsection

(1)(d), (b) the list

asset covered securities referred to in subsection

(1)(e), and (c) the list

asset covered securities referred to in subsection

(1)(f).”. Amendment

section 16

Principal Act 9. Section 16

the Principal Act is amended, in subsection

(3), by the substitution

“is relevant to covered bonds” for “is relevant to article 22

(4)securities which qualify as covered bonds for the purposes

the Codified Banking Directive”. Covered bond programmes 10. The Principal Act is amended by the insertion

the following Part after Part 3: “Part 3A COVERED BOND PROGRAMMES Application for permission for covered bond programme 26A.

(1)A designated credit institution shall apply to the Authority for permission for a covered bond programme.
(2)An application under subsection
(1)shall contain such information, and be accompanied by such documents, as may be requested by the Authority.
(3)The Authority may, by written notice given to an applicant, request the applicant to provide such additional information and documents as is reasonably necessary to enable it to determine the application.
(4)A notice under subsection
(3)shall specify a period, not exceeding 60 days from the date

the notice, within which the request is to be complied with.

(5)The Authority may reject an application where an applicant has not complied with a request under subsection
(3)within the period specified in the notice. Permission for covered bond programme 26B. The Authority may grant permission to a designated credit institution for a covered bond programme only if it is satisfied that the institution has in place the following: (a) an adequate programme

operations setting out the issue

asset covered securities; (b) adequate policies, processes and methodologies aimed at investor protection for the approval, amendment, renewal and refinancing

loans included in the cover asset pool; (c) management and staff dedicated to the covered bond programme who have adequate qualifications and knowledge regarding the issue

asset covered securities and the administration

the covered bond programme; (d) an administrative set-up

the cover asset pool and the monitoring thereof that meets the applicable requirements under this Act. Operation

Covered Bond Programme 26C.

(1)A designated credit institution shall not issue asset covered securities under a covered bond programme unless it has been granted permission for that programme under section 26B.
(2)A designated credit institution shall maintain a separate cover assets pool in respect

each covered bond programme for which it has been granted permission under section 26B. Review

covered bond programme 26D. The Authority may review a covered bond programme on a regular basis to assess compliance with this Act. Publication obligation – covered bond programmes 26E. The Authority shall publish the following on its website: (a) a list

the covered bond programmes for which permission has been granted under section 26B; (b) a list

the covered bond programmes in respect

which permission has been withdrawn under section 99A.”. Extendable maturity structures – designated mortgage credit institution 11. The Principal Act is amended by the insertion

the following section after section 29: “29A.

(1)A designated mortgage credit institution may issue mortgage covered securities with extendable maturity structures where it complies with the other provisions

this section.

(2)The maturity

mortgage covered securities issued by a designated mortgage credit institution may only be extended by the institution where— (

  1. a)the institution fails to pay the principal due on the scheduled maturity date (as extended by any applicable grace period), or (
  2. b)the Authority or manager directs the institution to extend the maturity

the securities.

(3)A designated mortgage credit institution shall specify the maturity extension triggers in the contractual terms and conditions

mortgage covered securities issued by the institution.

(4)A designated mortgage credit institution shall provide sufficient information to investors about the maturity structure

mortgage covered securities issued by the institution to enable the investors to determine the risk

the securities, including a detailed description

— (

  1. a)the maturity extension triggers, (
  2. b)the consequences for a maturity extension

the insolvency or resolution

the institution, and (c) the role

the Authority and, where relevant,

a manager with regard to the maturity extension.

(5)A designated mortgage credit institution shall ensure that the final maturity date

mortgage covered securities issued by the institution is at all times determinable.

(6)In the event

the insolvency or resolution

a designated mortgage credit institution, maturity extensions shall not affect the ranking

the investors in the mortgage covered securities issued by the institution or invert the sequencing

the original maturity schedule

a covered bond programme

the institution.

(7)A maturity extension shall not change the structural features

mortgage covered securities regarding dual recourse and bankruptcy remoteness.

(8)In this section ‘maturity extension trigger’ means the occurrence

the circumstances described in paragraph (a) or (b)

subsection

(2).”. Amendment

section 30

Principal Act 12. Section 30

the Principal Act is amended by the insertion

the following subsections after subsection

(5): “(5A) Contracts

the kind referred to in subsection

(3)may only be included in a cover assets pool where— (
  1. a)they are included exclusively for hedging purposes, (
  2. b)their volume is adjusted in the case

a reduction in the risk being hedged, (

  1. c)they are removed when the risk being hedged ceases to exist, (
  2. d)they cannot be terminated upon the designated mortgage credit institution becoming subject to an insolvency process or resolution, and (
  3. e)the counterparty is a credit institution referred to in point (c)

paragraph

(1)or paragraph
(1a)

Article 129

Regulation (EU) No 575/2013. (5B) A designated mortgage credit institution shall provide to the Authority all necessary documentation in relation to a contract

a kind referred to in subsection

(3)which has been included in a cover assets pool, including the relevant ISDA Master Agreement or equivalent documentation.”. Amendment

section 32

Principal Act 13. Section 32

the Principal Act is amended— (a) by the substitution

the following subsection for subsection

(8): “
(8)A designated mortgage credit institution shall ensure— (a) that a cover assets pool maintained by the institution has a duration

not less than that

the mortgage covered securities that relate to the pool, (b) that the prudent market value

the pool is greater than the total

the principal amounts

those securities, (c) that the total amount

interest payable in a given period

12 months in respect

the pool is, during that 12 month period, not less than the total amount

interest payable in respect

that period on those securities, and (

  1. d)that the currency in which each mortgage credit asset and substitution asset comprised in the pool is denominated is the same as the currency in which those securities are denominated, after taking into account— (
  2. i)in the case

paragraphs (b), (c) and (d), the effect

any cover assets hedge contract that the institution has entered into in relation to the pool and those securities (but, for the purposes

this subsection, disregarding the effect

any pool hedge collateral), and (ii) in the case

paragraph (b), the expected costs related to maintenance and administration for the winding-down

the covered bond programme.”, (b) by the insertion

the following subsections after subsection

(8): “(8A) The expected costs referred to in subsection
(8)(ii) may be calculated as a lump sum. (8B) A designated mortgage credit institution shall not take into account, for the purposes

paragraphs (b) and (c)

subsection

(8), uncollateralised claims where a default is considered to have occurred pursuant to Article 178

Regulation (EU) No 575/2013. (8C) A designated mortgage credit institution shall calculate— (a) interest payable in respect

outstanding asset covered securities, and (b) interest receivable in respect

cover assets, in a manner which reflects sound prudential principles in accordance with applicable accounting standards.”, and (c) by the insertion

the following subsection after subsection

(17): “
(18)Designated mortgage credit institutions shall have in place procedures to monitor that — (a) a residential property used as collateral for a mortgage credit asset is adequately insured against the risk

damage, and (b) the segregation

a mortgage credit asset encompasses any financial obligation to the institution consequent upon an insurance claim in respect

the residential property concerned.”. Cover asset pool liquidity buffer – designated mortgage credit institution 14. The Principal Act is amended by the insertion

the following section after section 32: “32A.

(1)A designated mortgage credit institution shall include in a cover asset pool, at all times, a liquidity buffer composed

liquid assets available to cover the net liquidity outflow

its covered bond programme.

(2)A cover pool liquidity buffer shall, on each day, cover the maximum cumulative net liquidity outflow for the following 180 days.
(3)The liquid assets referred to in subsection
(1)shall comprise short-term deposits with credit institutions that qualify for credit quality step 1, 2 or 3, in accordance with point (c)

Article 129

(1)

Regulation (EU) No 575/2013.

(4)Uncollateralised claims from exposures considered in default pursuant to Article 178

Regulation (EU) No 575/2013 shall not be used to contribute to a cover asset pool liquidity buffer.

(5)A designated mortgage credit institution may calculate the principal for extendable maturity structures on the basis

the final maturity date in accordance with the contractual terms and conditions

the asset covered securities concerned.”. Amendment

section 33

Principal Act 15. Section 33

the Principal Act is amended— (a) by the insertion

the following subsection after subsection

(2): “(2A) Where a designated mortgage credit institution includes in a cover assets pool a mortgage credit asset or substitution asset that is located within one or more category A countries, it shall— (a) verify that the asset complies with this section and sections 32
(18), 58A and 58C, (b) ensure that the asset

fers a level

security similar to that

collateral assets located in the European Union, and (c) ensure that the realisation

the asset is legally enforceable in a way which is equivalent in effect to the realisation

collateral assets located in the European Union.”, and (b) by the insertion

the following subsections after subsection

(7): “
(8)A designated mortgage credit institution shall not include in a cover assets pool maintained by the institution a mortgage credit asset unless the asset— (a) is eligible pursuant to Article 129
(1)(d) or (f)

Regulation (EU) No 575/2013, and (b) meets the requirements specified in Article 129

(1c)and
(3)

Regulation (EU) No 575/2013.

(9)A designated mortgage credit institution shall not include in a cover assets pool maintained by the institution a substitution asset, unless the asset— (a) is eligible pursuant to Article 129
(1)(c)

Regulation (EU) No 575/2013, and (b) meets the requirements specified in Article 129

(1a)

Regulation (EU) No 575/2013.

(10)Subject to the other provisions

this Chapter and section 58, a designated mortgage credit institution may use, as cover assets, assets originated by another credit institution which have been purchased from that other credit institution for the purpose

using them as cover assets.”. Amendment

section 35

Principal Act 16. Section 35

the Principal Act is amended, in subsection

(12), by the substitution

“tier 1 creditor” for “preferred creditor (other than a super-preferred creditor)”. Reporting requirements – designated mortgage credit institution 17. The Principal Act is amended by the insertion

the following section after section 38: “38A.

(1)A designated mortgage credit institution shall report the information specified in subsection
(2)to the Authority— (
  1. a)on a quarterly basis, and (
  2. b)when requested by the Authority.
(2)The information referred to in subsection
(1)is information on the following: (
  1. a)the conditions for extendable maturity structures, in accordance with section 29A; (
  2. b)the eligibility

assets and cover pool requirements, in accordance with sections 30 to 37, 39A, 58A and 58C; (

  1. c)the coverage requirements, in accordance with sections 32 and 33; (
  2. d)the cover pool liquidity buffer, in accordance with section 32A; (
  3. e)the segregation

cover assets, in accordance with sections 38 and 83; (f) where applicable, the functioning

the cover pool monitor, in accordance with Part 5.

(3)Subsection
(1)shall also apply in the event

the insolvency or resolution

a designated mortgage credit institution.”. Investor information – designated mortgage credit institution 18. The Principal Act is amended by the insertion

the following section after section 40: “40A.

(1)A designated mortgage credit institution shall provide information, on a website maintained by it, on its covered bond programme.
(2)The information referred to in subsection
(1)shall be sufficiently detailed to allow investors— (a) to assess the profile and risks

the covered bond programme, and (b) to carry out their due diligence.

(3)A designated mortgage credit institution shall provide the information referred to in subsection
(1)on at least a quarterly basis to investors.
(4)The information referred to in subsection
(1)shall include the following minimum portfolio information: (a) the value

the cover pool and outstanding asset covered securities; (b) a list

the ISINs for all asset covered securities issues under that programme, to which an ISIN has been attributed; (c) the geographical distribution and type

cover assets, their loan size and valuation method; (

  1. d)details in relation to market risk, including interest rate risk and currency risk, and credit and liquidity risks; (
  2. e)the maturity structure

cover assets and asset covered securities, including an overview

the maturity extension triggers if applicable; (f) the levels

required and available coverage, and the levels

statutory, contractual and voluntary overcollateralisation; (g) the percentage

loans where a default is considered to have occurred pursuant to Article 178

Regulation (EU) No 575/2013; (h) the percentage

loans which are more than 90 days past due.”. Repeal

section 41A

Principal Act 19. Section 41A

the Principal Act is repealed. Amendment

section 41B

Principal Act 20. Section 41B

the Principal Act is amended, in subsection

(1)— (a) by the deletion

paragraph (g), (b) by the insertion

the following paragraph after paragraph (l): “(la) in section 32

(18), the references to ‘residential property’ shall be construed as references to ‘commercial property’;”, (c) in paragraph (m), by the substitution

this section;” for “

this section; and”, and (d) by the insertion

the following paragraphs after paragraph (m): “(ma) in section 33

(8)(a), the reference to ‘Article 129
(1)(d) or (f)

Regulation (EU) No 575/2013’ shall be construed as a reference to ‘Article 129

(1)(f)

Regulation (EU) No 575/2013’; (mb) in section 33

(8)(b), the reference to ‘Article 129
(1c)and
(3)

Regulation (EU) No 575/2013’ shall be construed as a reference to ‘Article 129

(1d)and
(3)

Regulation (EU) No 575/2013’;”. Extendable maturity structures – designated public credit institution 21. The Principal Act is amended by the insertion

the following section after section 44: “44A.

(1)A designated public credit institution may issue public credit covered securities with extendable maturity structures where it complies with the other provisions

this section.

(2)The maturity

public credit covered securities issued by a designated public credit institution may only be extended by the institution where— (

  1. a)the institution fails to pay the principal due on the scheduled maturity date (as extended by any applicable grace period), or (
  2. b)the Authority or manager directs the institution to extend the maturity

the securities.

(3)A designated public credit institution shall specify the maturity extension triggers in the contractual terms and conditions

the public credit covered securities issued by the institution.

(4)A designated public credit institution shall provide sufficient information to investors about the maturity structure

public credit covered securities issued by the institution to enable the investors to determine the risk

the securities, including a detailed description

— (

  1. a)the maturity extension triggers, (
  2. b)the consequences for a maturity extension

the insolvency or resolution

the institution, and (c) the role

the Authority and, where relevant,

a manager with regard to the maturity extension.

(5)A designated public credit institution shall ensure that the final maturity date

public credit covered securities issued by the institution is at all times determinable.

(6)In the event

the insolvency or resolution

a designated public credit institution, maturity extensions shall not affect the ranking

the investors in the public credit covered securities issued by the institution or invert the sequencing

the original maturity schedule

a covered bond programme

the institution.

(7)A maturity extension shall not change the structural features

public credit covered securities regarding dual recourse and bankruptcy remoteness.

(8)In this section ‘maturity extension trigger’ means the occurrence

the circumstances described in paragraph (a) or (b)

subsection

(2).”. Amendment

section 45

Principal Act 22. Section 45

the Principal Act is amended by the insertion

the following subsections after subsection

(5): “(5A) Contracts

the kind referred to in subsection

(3)may only be included in a cover assets pool where— (
  1. a)they are included exclusively for hedging purposes, (
  2. b)their volume is adjusted in the case

a reduction in the risk being hedged, (

  1. c)they are removed when the risk being hedged ceases to exist, (
  2. d)they cannot be terminated upon the designated public credit institution becoming subject to an insolvency process or resolution, and (
  3. e)the counterparty is a credit institution referred to in point (c)

paragraph

(1)or paragraph
(1a)

Article 129

Regulation (EU) No 575/2013. (5B) A designated public credit institution shall provide to the Authority all necessary documentation in relation to a contract

a kind referred to in subsection

(3)which has been included in a cover assets pool, including the relevant ISDA Master Agreement or equivalent documentation.”. Amendment

section 47

Principal Act 23. Section 47

the Principal Act is amended— (a) by the substitution

the following subsection for subsection

(8): “
(8)A designated public credit institution shall ensure— (a) that a cover assets pool maintained by the institution has a duration

not less than that

the public credit covered securities that relate to the pool, (b) that the prudent market value

the pool is greater than the total

the principal amounts

those securities, (c) that the total amount

interest payable in a given period

12 months in respect

the pool is, during that 12 month period, not less than the total amount

interest payable in respect

that period on those securities, and (

  1. d)that the currency in which each public credit asset and substitution asset comprised in the pool is denominated is the same as the currency in which those securities are denominated, after taking into account— (
  2. i)in the case

paragraphs (b), (c) and (d), the effect

any cover assets hedge contract that the institution has entered into in relation to the pool and those securities (but, for the purposes

this subsection, disregarding the effect

any pool hedge collateral), and (ii) in the case

paragraph (b), the expected costs related to maintenance and administration for the winding-down

the covered bond programme.”, and (b) by the insertion

the following subsections after subsection

(8): “(8A) The expected costs referred to in subsection
(8)(ii) may be calculated as a lump sum. (8B) A designated public credit institution shall not take into account, for the purposes

paragraphs (b) and (c)

subsection

(8), uncollateralised claims where a default is considered to have occurred pursuant to Article 178

Regulation (EU) No 575/2013. (8C) A designated public credit institution shall calculate— (a) interest payable in respect

outstanding asset covered securities, and (b) interest receivable in respect

cover assets, in a manner which reflects sound prudential principles in accordance with applicable accounting standards.”. Cover asset pool liquidity buffer – designated public credit institution 24. The Principal Act is amended by the insertion

the following section after section 47: “47A.

(1)A designated public credit institution shall include in a cover asset pool, at all times, a liquidity buffer composed

liquid assets available to cover the net liquidity outflow

its covered bond programme.

(2)A cover pool liquidity buffer shall, on each day, cover the maximum cumulative net liquidity outflow for the following 180 days.
(3)The liquid assets referred to in subsection
(1)shall comprise short-term deposits with credit institutions that qualify for credit quality step 1, 2 or 3, in accordance with point (c)

Article 129

(1)

Regulation (EU) No 575/2013.

(4)Uncollateralised claims from exposures considered in default pursuant to Article 178

Regulation (EU) No 575/2013 shall not be used to contribute to a cover asset pool liquidity buffer.

(5)A designated public credit institution may calculate the principal for extendable maturity structures on the basis

the final maturity date in accordance with the contractual terms and conditions

the asset covered securities concerned.”. Amendment

section 48

Principal Act 25. Section 48

the Principal Act is amended— (a) by the insertion

the following subsection after subsection

(1): “(1A) Where a designated public credit institution includes in a cover assets pool a public credit asset or substitution asset that is located within one or more category A countries, it shall— (a) verify that the asset complies with this section and sections 58A and 58C, (b) ensure that the asset

fers a level

security similar to that

collateral assets located in the European Union, and (c) ensure that the realisation

the asset is legally enforceable in a way which is equivalent in effect to the realisation

collateral assets located in the European Union.”, (b) by the insertion

the following subsections after subsection

(3): “(3A) A designated public credit institution shall not include in a cover assets pool maintained by the institution a public credit asset unless the asset is eligible pursuant to Article 129
(1)(a) or (b)

Regulation (EU) No 575/2013. (3B) A designated public credit institution shall not include in a cover assets pool maintained by the institution a substitution asset, unless the asset— (a) is eligible pursuant to Article 129

(1)(c)

Regulation (EU) No 575/2013, and (b) meets the requirements specified in Article 129

(1a)

Regulation (EU) No 575/2013. (3C) Subject to the other provisions

this Chapter and section 58, a designated public credit institution may use, as cover assets, assets originated by another credit institution which have been purchased from that other credit institution for the purpose

using them as cover assets.”, and (c) by the deletion

subsection

(5). Amendment

section 50

Principal Act 26. Section 50

the Principal Act is amended— (a) in subsection

(9), by the deletion

paragraph (a), and (b) in subsection

(12), by the substitution

“tier 1 creditor” for “preferred creditor (other than a super-preferred creditor)”. Reporting requirements – designated public credit institution 27. The Principal Act is amended by the insertion

the following section after section 53: “53A.

(1)A designated public credit institution shall report the information specified in subsection
(2)to the Authority— (
  1. a)on a quarterly basis, and (
  2. b)when requested by the Authority.
(2)The information referred to in subsection
(1)is information on the following: (
  1. a)the conditions for extendable maturity structures, in accordance with section 44A; (
  2. b)the eligibility

assets and cover pool requirements, in accordance with sections 45 to 52, 54A, 58A and 58C; (

  1. c)the coverage requirements, in accordance with sections 47 and 48; (
  2. d)the cover pool liquidity buffer, in accordance with section 47A; (
  3. e)the segregation

cover assets, in accordance with sections 53 and 83; (f) where applicable, the functioning

the cover pool monitor, in accordance with Part 5.

(3)Subsection
(1)shall also apply in the event

the insolvency or resolution

a designated public credit institution.”. Investor information – designated public credit institution 28. The Principal Act is amended by the insertion

the following section after section 55: “55A.

(1)A designated mortgage credit institution shall provide information, on a website maintained by it, on its covered bond programme.
(2)The information referred to in subsection
(1)shall be sufficiently detailed to allow investors— (a) to assess the profile and risks

the covered bond programme, and (b) to carry out their due diligence.

(3)A designated mortgage credit institution shall provide the information referred to in subsection
(1)on at least a quarterly basis.
(4)The information referred to in subsection
(1)shall include the following minimum portfolio information: (a) the value

the cover pool and outstanding asset covered securities; (b) a list

the ISINs for all asset covered securities issues under that programme, to which an ISIN has been attributed; (c) the geographical distribution and type

cover assets, their loan size and valuation method; (

  1. d)details in relation to market risk, including interest rate risk and currency risk, and credit and liquidity risks; (
  2. e)the maturity structure

cover assets and asset covered securities, including an overview

the maturity extension triggers, if applicable; (f) the levels

required and available coverage, and the levels

statutory, contractual and voluntary overcollateralisation; (g) the percentage

loans where a default is considered to have occurred pursuant to Article 178

Regulation (EU) No 575/2013; (h) the percentage

loans which are more than 90 days past due.”. Amendment

section 58

Principal Act 29. Section 58

the Principal Act is amended by the insertion

the following subsections after subsection (12A): “(12B) A designated credit institution may transfer assets by way

a financial collateral arrangement in accordance with the European Communities (Financial Collateral Arrangements) Regulations 2010 ( S.I. No. 626

2010 ). (12C) Where a designated credit institution uses, as cover assets, assets originated by an undertaking that is not a credit institution, the designated credit institution shall— (a) assess the credit-granting standards

the undertaking which originated the cover assets, or (b) perform a thorough assessment

the creditworthiness

the borrower concerned.”. Valuation

assets, automatic acceleration, documentation and labels 30. The Principal Act is amended by the insertion

the following sections after section 58: “Valuation

assets 58A. A designated credit institution shall ensure that— (a) at the moment

inclusion

a mortgage credit asset or a commercial mortgage credit asset in a cover pool, a current valuation at or at less than market value or mortgage lending value exists for each residential property or commercial property, as the case may be, which secures the mortgage credit asset or commercial mortgage credit asset, as the case may be, (b) a valuation

the residential property or commercial property, as the case may be, has been carried out by a valuer who possesses the necessary qualifications, ability and experience, and (

  1. c)the valuer referred to in paragraph (b)— (
  2. i)is independent from the credit decision process, (
  3. ii)does not take into account speculative elements in the assessment

the value

the residential property or commercial property, as the case may be, and (iii) documents the value

the residential property or commercial property, as the case may be, in a transparent and clear manner. Automatic acceleration 58B. A designated credit institution shall not issue an asset covered security which is subject to automatic acceleration upon the insolvency or resolution

the institution. Documentation, systems and processes 58C.

(1)A designated credit institution shall document— (
  1. a)the cover assets included in the cover assets pool maintained by the institution, and (
  2. b)the compliance

the institution’s lending policies with— (i) in the case

a designated mortgage credit institution, this section and sections 32

(18), 33 and 58A, (ii) in the case

a designated commercial mortgage credit institution, this section and sections 32

(18)and 33 (as modified in accordance with section 41B) and section 58A, and (iii) in the case

a designated public credit institution, this section and sections 48 and 58A.

(2)A designated credit institution shall have in place adequate and appropriate documentation, systems and processes relating to its covered bond programme. Labelling 58D.
(1)Subject to section 108
(2), a designated credit institution shall not use the label ‘European Covered Bond’ or an

ficial translation

that phrase in any

the

ficial languages

the European Union for asset covered securities unless those securities are issued in compliance with this Act.

(2)A designated credit institution shall not use the label ‘European Covered Bond (Premium)’ or an

ficial translation

that phrase in any

the

ficial languages

the European Union for asset covered securities unless those securities are issued in compliance with— (a) this Act, and (b) Article 129

Regulation (EU) No 575/2013.”. Amendment

section 59

Principal Act 31. Section 59

the Principal Act is amended by the substitution

the following subsection for subsection

(6): “
(6)In this section— ‘affiliate’— (a) in relation to a body corporate (in this definition referred to as the ‘first-mentioned body corporate’), means another body corporate that is a subsidiary company or a holding company (within the meaning

the Companies Act 2014 )

the first-mentioned body corporate, and (b) in relation to a partnership (in this definition referred to as the ‘first-mentioned partnership’), means another partnership, one or more

the partners in which is a partner in the first-mentioned partnership; ‘qualified person’ means a body corporate or partnership that— (a) has demonstrated to the satisfaction

— (i) the Authority— (I) that it has experience and competence in the following: (A) financial risk management techniques; (B) regulatory compliance reporting, (II) that it has skills and experience relevant to trading on capital markets and the use

derivatives, (III) that it has sufficient human, information technology and financial resources available to it to carry out the responsibilities

a cover-assets monitor in respect

the designated credit institution concerned, and (IV) that its employees have sufficient— (A) academic or professional qualifications, and (B) experience, in financial services, and (

  1. ii)the designated credit institution concerned— (I) that its employees have sufficient— (A) academic or professional qualifications, and (B) experience, in financial services, and (II) that it has adequate professional indemnity insurance in place, (
  2. b)is separate to and independent

the designated credit institution concerned and any undertaking which is part

the same group as that designated credit institution, (c) is not itself, nor are any

its affiliates, engaged as auditor or legal advisor to the designated credit institution concerned or any undertaking which is part

the same group as that designated credit institution, (d) does not itself, nor does any

its affiliates, provide any services (other than legal or auditing services), other than where it has been established to the satisfaction

the Authority that no conflict

interest will arise as a result

the provision

those services and the performance

the functions

a cover-assets monitor under this Act, (e) does not hold any shares or similar interests in the designated credit institution concerned or in any undertaking which is part

the same group as that designated credit institution, and (f) other than as permitted under this Act or the regulations, regulatory notices or orders made under this Act, is not involved in any decision-making function or directional activity

the designated credit institution concerned, or any undertaking which is part

the same group as that designated credit institution, which could unduly influence the judgment

the management

the designated credit institution concerned or any undertaking which is part

the same group as that designated credit institution .”. Amendment

section 72

Principal Act 32. Section 72

the Principal Act is amended, in subsection

(1), by the insertion

the following paragraphs after paragraph (b): “(ba) the institution has been determined to be failing or likely to fail pursuant to Article 32

(1)

Directive 2014/59/EU; (bb) in exceptional circumstances, if the Authority determines that the proper functioning

the institution is seriously at risk;”. Amendment

section 78

Principal Act 33. Section 78

the Principal Act is amended— (a) in paragraph (a), by the substitution

“section 72

(6),” for “section 72
(6), and”, (b) in paragraph (b), by the substitution

“relate to those activities,” for “relate to those activities.”, and (c) by the insertion

the following paragraphs after paragraph (b): “(c) for the initiation

proceedings in order to bring assets back into the cover pool

the institution, and (d) for the transferral

the remaining assets to the insolvency estate

the institution which issued the asset covered securities after all liabilities in relation to those securities have been discharged.”. Amendment

section 79

Principal Act 34. Section 79

the Principal Act is amended— (a) in paragraph (a), by the substitution

“notice

appointment,” for “notice

appointment, and”, (b) in paragraph (b), by the substitution

“cover assets hedge contracts, and” for “cover assets hedge contracts.”, and (c) by the insertion

the following paragraph after paragraph (b): “(c) shall verify the continuous and sound management

the institutions covered bond programme during the period

the manager’s appointment.”. Co-operation between Authority and manager 35. The Principal Act is amended by the insertion

the following section after section 79: “79A. Where— (a) a manager has been appointed in respect

a designated or formerly designated credit institution, and (b) the institution is subject to an insolvency or resolution process, the Authority and the manager shall co-ordinate their activities and exchange information for the purposes

the insolvency or resolution process, as the case may be.”. Amendment

section 83

Principal Act 36. Section 83

the Principal Act is amended— (a) in subsection

(1), by the substitution

“an insolvency or resolution process” for “an insolvency process”, (b) in subsection

(3), by the substitution

“tier 1 creditors” for “super-preferred creditors”, and (c) in subsection

(5), by the substitution

“any insolvency or resolution process” for “any insolvency process”. Amendment

section 85

Principal Act 37. Section 85

the Principal Act is amended— (a) in subsection

(1), by the substitution

“an insolvency or resolution process” for “an insolvency process”, and (b) in subsection

(2), by the substitution

“any insolvency or resolution process” for “any insolvency process”. Amendment

section 88

Principal Act 38. Section 88

the Principal Act is amended, in subsection (3A), by the substitution

“tier 2 creditors” for “super-preferred creditors”. Resolution 39. The Principal Act is amended by the insertion

the following section after section 90: “90A. Where a credit institution which has issued asset covered securities is subject to resolution, the Authority shall ensure that the rights and interests

investors in those securities are preserved, including by verifying the continuous and sound management

the covered bond programme during the period

the resolution process.”. Amendment

section 91

Principal Act 40. Section 91

the Principal Act is amended by the deletion

subsection (2A). Guidelines 41. The Principal Act is amended by the insertion

the following section after section 91: “91A.

(1)The Authority may adopt and implement supervisory guidelines relating to the issue

asset covered securities.

(2)The Authority shall publish the guidelines referred to in subsection
(1)on its website.”. Amendment

section 95A

Principal Act 42. Section 95A

the Principal Act is amended by the substitution

the following paragraph for paragraph (e): “(e) regulations and directives made by competent organs

the European Union which have been implemented under the law

the State and which are relevant to asset covered securities.”. Repeal

section 96

Principal Act 43. Section 96

the Principal Act is repealed. Administrative sanctions and publication 44. The Principal Act is amended by the insertion

the following sections after section 99: “Administrative sanctions 99A.

(1)Where the provisions

the Act

1942 are invoked in relation to a contravention specified in subsection

(3), including where those provisions are invoked in respect

a member

the management body

the designated credit institution concerned or some other natural person responsible for the contravention, any or all

the sanctions referred to in subsection

(4)may be imposed by the Authority— (a) following an inquiry under section 33AO

the Act

1942, or (b) in accordance with section 33AR or section 33AV

the Act

1942.

(2)The power

the Authority to impose any

the sanctions referred to in subsection

(4)is in addition to and not in substitution for its power to impose any

the sanctions specified in section 33AQ

the Act

1942.

(3)The contraventions referred to in subsection
(1)are the following: (a) a designated credit institution has acquired a permission for a covered bond programme under section 26B by means

false statements or other irregular means; (

  1. b)a designated credit institution no longer fulfils the conditions under which permission for a covered bond programme was given under section 26B; (
  2. c)a designated credit institution issues asset covered securities without obtaining permission in accordance with section 26B; (
  3. d)a designated credit institution issues asset covered securities in contravention

section 58B; (e) a designated credit institution issuing asset covered securities contravenes Chapter 1, that Chapter as modified in accordance with section 41B, Chapter 3 or section 58 in using, as cover assets, assets originated by another credit institution which have been purchased from that other credit institution for the purpose

using them as cover assets,; (

  1. f)a designated credit institution issuing asset covered securities contravenes section 33, that section as modified in accordance with section 41B, or section 48; (
  2. g)a designated credit institution issuing asset covered securities contravenes section 30, that section as modified in accordance with section 41B, or section 45; (
  3. h)a designated credit institution issuing asset covered securities contravenes section 38, that section as modified in accordance with section 41B, or section 53; (
  4. i)a designated credit institution issuing asset covered securities fails to report information or provides incomplete or inaccurate information in contravention

section 40A, that section as modified in accordance with section 41B, or section 55A; (j) a designated credit institution issuing asset covered securities repeatedly or persistently fails to maintain a cover pool liquidity buffer in contravention

section 32A, that section as modified in accordance with section 41B, or section 47A; (

  1. k)a designated credit institution that issues asset covered securities with extendable maturity structures contravenes section 29A, that section as modified in accordance with section 41B, or section 44A; (
  2. l)a designated credit institution issuing asset covered securities fails to report information or provides incomplete or inaccurate information on its obligations in contravention

section 38A, that section as modified in accordance with section 41B, or section 53A.

(4)The sanctions referred to in subsection
(1)are the following: (a) withdrawal

a permission for a covered bond programme; (b) a public statement which indicates the identity

the natural or legal person and the nature

the contravention concerned in accordance with section 99B; (c) an order requiring a natural or legal person responsible for the contravention to cease, and desist from a repetition

, the conduct concerned.

(5)For the purposes

a contravention specified in subsection

(3), any reference in the Act

1942 to the sanctions set out in section 33AQ

that Act is to be read as including a reference to the sanctions specified in subsection

(4).
(6)The Authority shall, when determining the type

sanction and, where a pecuniary penalty is to be imposed, the level

that penalty, take into account all

the following circumstances, where relevant: (a) the gravity and the duration

the breach; (b) the degree

responsibility

the natural or legal person responsible for the breach; (c) the financial strength

the natural or legal person responsible for the breach, including by reference to the total turnover

the legal person or the annual income

the natural person; (d) the importance

profits gained or losses avoided because

the breach by the natural or legal person responsible for the breach, insofar as those profits or losses can be determined; (

  1. e)the losses caused to third parties by the breach, insofar as those losses can be determined; (
  2. f)the level

cooperation with the Authority by the natural or legal person responsible for the breach; (

  1. g)any previous breaches by the natural or legal person responsible for the breach; (
  2. h)any actual or potential systemic consequences

the breach.

(7)Where the Authority imposes a sanction referred to in subsection
(4), it shall set out in its decision under section 33AQ
(7)or 33AR
(4), as the case may be,

the Act

1942 the grounds on which it has imposed the sanction. Publication 99B.

(1)The Authority shall publish on its

ficial website information on each sanction which is imposed by it for breach

this Act, including information on— (a) the type and nature

the breach, and (b) the identity

the natural or legal person on whom the sanction is imposed, without undue delay after the person is informed

the sanction and that the information will be published on the

ficial website

the Authority.

(2)Where the Authority publishes information on a sanction against which there is an appeal, the Authority shall, without undue delay, also publish on its

ficial website information on the appeal status and outcome thereof.

(3)Where a decision

a court from which there is no appeal annuls a decision imposing a sanction, the Authority shall publish the decision

the court on its

ficial website.

(4)The Authority shall publish the sanctions, referred to in subsection
(1), on an anonymous basis where one or more

the following conditions is satisfied: (a) the penalty is imposed on a natural person and the publication

personal data is found to be disproportionate; (b) publication on an onymous basis would jeopardise the stability

financial markets or an ongoing criminal investigation; (c) publication on an onymous basis would cause, insofar as it can be determined, disproportionate damage to the designated credit institutions or natural persons involved.

(5)Where the Authority publishes information on an anonymous basis in accordance with subsection
(4), the Authority may subsequently publish the information on an onymous basis where the relevant condition, specified in paragraph (a), (b) or (c)

that subsection, is no longer satisfied.

(6)Subject to subsection
(7), the Authority shall ensure that information published by it under this section remains on its

ficial website for not less than 5 years.

(7)Where information published by the Authority under this section is personal data, the Authority shall not retain the personal data on its website for longer than is permitted under data protection law and in any case shall not retain the personal data on its website for more than 10 years.
(8)The Authority shall inform the EBA

any sanctions imposed, including, where relevant, any appeal in relation thereto and the outcome thereof.

(9)In this section ‘data protection law’ means the Data Protection Act 2018 and Regulation (EU) 2016/679

the European Parliament and

the Council

27 April 20163 .”. Transitional provisions for asset covered securities issued before 8 July 2022 45. The Principal Act is amended by the insertion

the following section after section 107: “108.

(1)The amendments to this Act effected by the following provisions

the European Union (Covered Bonds) Regulations 2021 ( S.I. No. 576

2021 ) shall not apply in respect

asset covered securities which are issued before 8 July 2022 and which meet the criteria for bonds under Regulation 70

(3)(a)

the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 ( S.I. No. 352

2011 ) as it applied on the date

their issue: (

  1. a)Regulation 4; (
  2. b)Regulation 5; (
  3. c)Regulation 10; (
  4. d)Regulation 11; (
  5. e)Regulation 12; (
  6. f)Regulation 13; (
  7. g)Regulation 14; (
  8. h)Regulation 15; (
  9. i)Regulation 16; (
  10. j)Regulation 19; (
  11. k)Regulation 20; (
  12. l)Regulation 21; (
  13. m)Regulation 22; (
  14. n)Regulation 23; (
  15. o)Regulation 24; (
  16. p)Regulation 25(
  17. a)and (b); (
  18. q)Regulation 26(b); (
  19. r)Regulation 29; (
  20. s)Regulation 30 (other than in so far as it provides for the insertion

sections 58C

(2)and 58D); (
  1. t)Regulation 36; (
  2. u)Regulation 38.
(2)A designated credit institution may use the label ‘European Covered Bond’ or an

ficial translation

that phrase in any

the

ficial languages

the European Union for asset covered securities which are issued before 8 July 2022 and which meet the criteria for bonds under Regulation 70

(3)(a)

the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 as it applied on the date

their issue.

(3)The Authority shall monitor whether asset covered securities which are issued before 8 July 2022— (a) meet the criteria for bonds under Regulation 70
(3)(a)

the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 as it applied on the date

their issue, and (b) comply with this Act as it applies in respect

such asset covered securities.”. Amendment

Central Bank Act 1942 46. Section 33BC

the Central Bank Act 1942 (No. 22

1942) is amended by the insertion

the following subsection after subsection

(15): “
(16)This section does not apply where section 99B

the Asset Covered Securities Act 2001 applies.”. Amendment

European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 47. The European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 are amended, in Regulation 70

(3)— (a) by the substitution

the following subparagraph for subparagraph (a): “(a) Notwithstanding paragraphs

(1)(a) and
(2), a UCITS may invest up to 25 per cent

its assets in bonds— (i) that were issued before 8 July 2022 and met the requirements set out in this subparagraph as it applied on the date

their issue, or (ii) which come within the definition

‘covered bond’ in point

(1)

Article 3

Directive (EU) 2019/2162

the European Parliament and

the Council

27 November 20194 .”, and (b) by the deletion

subparagraph (c). Amendment

European Union (Bank Recovery and Resolution) Regulations 2015 48. The European Union (Bank Recovery and Resolution) Regulations 2015 ( S.I. No. 289

2015 ) are amended, in Regulation 3

(1), by the substitution

the following definition for the definition

“covered bond”: “ ‘covered bond’ means a covered bond as defined in point

(1)

Article 3

Directive (EU) 2019/2162

the European Parliament and

the Council

27 November 20195 or, with regard to an instrument that was issued before 8 July 2022, a bond as referred to in Article 52

(4)

Directive 2009/65/EC, as applicable on the date

its issue;”. GIVEN under my

ficial Seal, 3 November,

  1. PASCHAL DONOHOE, Minister for Finance. 1 O.J. No. L. 328, 18.12.2019, p.
  2. 2 OJ No. L. 328, 18.12.2019, p.
  3. 3 O.J. No. L. 119, 4.5.2016, p.
  4. 4 O.J. No. L. 328, 18.12.2019, p.
  5. 5 O.J. No. L. 328, 18.12.2019, p.
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