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Amendment of section 50 of Principal Act.
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38.— Section 50 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”, and
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(c) by substituting the following for subsections (8) and (9):
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“(8) A designated public credit institution may not at any time include a substitution asset in a 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 public credit covered securities secured on the pool. For the purposes of this subsection, the prescribed percentage is 15 per cent.
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(9) 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) may have regard to creditworthiness standards or criteria under the Codified Banking Directive relevant to substitution assets and article 22(4) securities which qualify as covered bonds for the purposes of that 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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