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Modifications to Chapter 1 of Part 4 of Principal Act in its application to securitised mortgage credit assets.
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29.— The Principal Act is amended by inserting the following after section 41 but in Chapter 1 of Part 4:
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“Modifications to this Chapter in its application to securitised mortgage credit assets.
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41A.— (1) This Chapter shall be modified as follows in relation to securitised mortgage credit assets:
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(a) securitised mortgage credit assets shall be disregarded for the purposes of sections 31(1), 32(11), (12) and (13) and 40(2);
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(b) the location of securitised mortgage credit assets for the purposes of section 33(1) and (2) shall be determined by reference to the location of the property assets related to the mortgage credit assets which are securitised;
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(c) securitised mortgage credit assets may only be included by a designated mortgage credit institution in the cover assets pool if those assets satisfy the following requirements:
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(i) the securitisation entity which is the issuer of the securitised mortgage credit assets is established under and subject to the laws of an EEA country;
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(ii) at least 90 per cent of the assets held, directly or indirectly, by the securitisation entity are assets that comprise one or more mortgage credits, but disregarding, for the purposes of this subsection—
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(I) assets that comprise one or more mortgage credits which if they were held by a designated mortgage credit institution would only qualify as mortgage credit assets under section 4(4), and
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(II) such assets representing exposures caused by transmission and management of payments of the obligors under, or liquidation proceeds in respect of, assets that comprise one or more mortgage credits;
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(iii) the securitised mortgage credit assets constitute senior claims of the securitisation entity in that they meet any creditworthiness standards or criteria which may be specified by the Authority in a regulatory notice made for the purposes of this paragraph;
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(iv) the nominal or principal amount outstanding of the securitised mortgage credit assets comprised in the cover assets pool at any time do not exceed any applicable percentage, which may be specified by the Authority by regulatory notice, of the nominal or principal amount of the outstanding mortgage covered securities issued by the institution; and
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(v) the securitised mortgage assets have a prudent market value not greater than the amount determined under subsection (2) in respect of those assets.
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(2) For the purposes of—
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(a) section 32(8) and (15),
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(b) any contractual undertaking made by the institution referred to in section 32(16), and
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(c) section 41(1) and (2),
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securitised mortgage credit assets shall have a prudent market value no greater than an amount equal to the lesser of the following:
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(i) the principal or nominal amount outstanding of the securitised mortgage credit assets concerned;
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(ii) subject to subsection (3), the principal or nominal amount of assets that comprise one or more mortgage credits held by the securitisation entity less any credits having security over the property assets, the subject also of those mortgage credit assets, which rank ahead of the security over those mortgage credit assets held by the securitisation entity; and
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(iii) subject to subsection (3), an amount equal to the applicable percentage of the value of the property assets which are the subject of the mortgage credit assets held by the securitisation entity.
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(3) For the purpose of determining the principal or nominal amount of credits (including mortgage credit assets) for the purposes of subsection (2)(ii) or the value of property assets for the purposes of subsection (2)(iii), an aggregate basis shall be used having regard to—
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(a) the proportion which the nominal or principal amount of the securitised mortgage credit assets concerned bear as against the total of the nominal or principal amount of securitised assets that comprise one or more mortgage credits issued by the securitisation entity and which are secured on the same assets as the securitised mortgage credit assets concerned, and
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(b) the ranking in terms of seniority of the securitised mortgage credit assets concerned as against all securitised assets that comprise one or more mortgage credits issued by the relevant securitisation entity and which are secured on the same assets as the securitised mortgage credit assets concerned.
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(4) The Authority may, by regulatory notice published in Iris Oifigiúil, specify creditworthiness standards or criteria for securitised mortgage credit assets for the purposes of subsection (1)(c)(iii).
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(5) The Authority may, by regulatory notice published in Iris Oifigiúil, specify—
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(a) a percentage for the purposes of subsection (1)(c)(iv), and
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(b) any circumstances related to creditworthiness of the securitised mortgage credit assets concerned to which such percentage applies.
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(6) The applicable percentage for the purposes of subsection (2)(iii) shall be—
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(a) where the property assets which are related to the securitised mortgage credit assets comprise residential property only, 80 per cent,
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(b) in any other case, 60 per cent.
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(7) The Authority may, by regulatory notice published in Iris Oifigiúil, specify requirements or criteria with respect to—
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(a) the creditworthiness of securitised mortgage credit assets which may be acquired and held by a designated mortgage credit institution outside its cover assets pool, or
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(b) any matter referred to in this section.
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(8) The Authority shall, when making any regulatory notice for the purposes of this section, have regard to any applicable standards or criteria relevant to article 22(4) securities which qualify as covered bonds under the Codified Banking Directive.
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(9) A designated mortgage credit institution shall include the following information in respect of securitised mortgage credit assets comprised in its cover assets pool in its annual financial statement or in a document accompanying the statement:
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(a) the name of the securitisation entities which are the issuers of those assets and the principal or nominal amount and class or title of those assets, as at the date to which the statement is made up; and
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(b) any information prescribed by the regulations for the purposes of this subsection.
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(10) In subsection (3), ‘securitised’ shall be construed in accordance with Article 4(36) of the Codified Banking Directive.”.
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