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Amendment of section 35 of Principal Act.
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23.— Section 35 of the Principal Act is amended—
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(a) in subsection (1), by substituting “comprised” for “included”,
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(b) in subsection (3), by inserting “when” after “an underlying asset”,
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(c) by substituting the following for subsection (8):
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“(8) A designated mortgage credit institution may not at any time include a substitution asset in the cover assets pool maintained by the institution—
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(a) unless the substitution asset concerned meets the creditworthiness standards or criteria applicable to it which may be specified by the Authority in a regulatory notice made for the purposes of this subsection, or
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(b) if, after including the substitution asset concerned in the pool, the total prudent market value of all substitution assets then comprised in the pool at the relevant time would exceed the prescribed percentage of the aggregate nominal or principal amount of outstanding mortgage covered securities secured on the pool. For the purposes of this subsection, the prescribed percentage is 15 per cent or, if an order under subsection (9) specifies some other percentage, that other percentage.”,
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(d) by inserting the following after subsection (9):
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“(9A) For the purposes of subsection (8), when determining the total prudent market value of all substitution assets comprised in a cover assets pool at any time there shall be disregarded any substitution assets represented by exposures caused by the transmission and management of payments of the obligors under, or liquidation proceeds in respect of, mortgage credit assets comprised in the pool.
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(9B) The Authority may, by regulatory notice published in Iris Oifigiúil, specify creditworthiness standards or criteria for the purposes of subsection (8) and such standards or criteria—
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(a) shall have regard to creditworthiness standards or criteria applicable to substitution assets as eligible collateral for covered bonds under the Codified Banking Directive, and
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(b) may differentiate between substitution assets which have a maximum maturity of 100 days and those which have a longer maturity.”.
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