S.I. No. 419/2004 - Asset Covered Securities Act, 2001 (Section 61 (1), 61 (2), 61(3)) [Overcollateralisation] Regulation 2004

Section 33C of the Central Bank Act, 1942 (as amended) designates the Irish Financial Services Regulatory Authority (the “Authority”) as being the body responsible for exercising the powers conferred on the Central Bank and Financial Services Authority of Ireland by Section 61 (1), 61 (2) and 61(3) of the Asset Covered Securities Act, 2001 (no 47 of 2001) (as amended). The Authority hereby makes the following Regulation:

1.         This Regulation may be called the Asset Covered Securities Act, 2001 (Sections 61(1), 61 (2) and 61(3)) (Overcollateralisation) Regulation 2004.

2.         In this Regulation the “Act” means the Asset Covered Securities Act, 2001 (no 47 of 2001) (as amended). A word or expression that is used in this Regulation and is also used in the Act has, unless the contrary intention appears, the same meaning in this Regulation as in the Act.

3.         In this Regulation, “overcollateralisation” means:-

a)         in relation to principal coverage, that the prudent market value of the cover assets pool is greater than the total of the principal amounts of the mortgage covered securities in issue which are secured on that pool;

b)         in relation to interest coverage, that the total amount of interest payable in a given period of twelve months in respect of the cover assets pool is during that twelve month period greater than the total amount of interest payable in respect of that period on the mortgage covered securities in issue which are secured on that pool.

4.         This Regulation prescribes that a cover-assets monitor appointed in respect of any designated mortgage credit institution when performing its responsibilities under the Act must have regard to any contractual undertakings given by the designated mortgage credit institution to maintain a level of overcollateralisation of cover assets as against mortgage covered securities issued by that institution and the cover-assets monitor is responsible for monitoring the designated mortgage credit institution's compliance with those undertakings.

EXPLANATORY NOTE

This note is not part of the Regulation and does not purport to be a legal interpretation.

This regulation prescribes that the cover-assets monitor must be aware of contractual undertakings in respect of overcollateralisation given by the designated mortgage credit institution to which it is appointed and is responsible for monitoring the designated mortgage credit institution's compliance with such undertakings.