Asset Covered Securities Act, 2001

Designated mortgage credit institution may enter into certain kinds of contracts.

30.—(1) A designated mortgage credit institution may enter into one or more contracts the purpose or effect of which is to reduce or minimise the risk of financial loss or exposure liable to arise from—

(a) fluctuations in interest rates or currency exchange rates,

(b) credit risks, or

(c) other risk factors that may adversely affect its permitted business activities.

(2) The Authority may, by regulatory notice published in Iris Oifigiúil, specify for the purpose of this section requirements as to—

(a) the kind of contracts that a designated mortgage credit institution may enter into under subsection (1), and

(b) the terms and conditions under which those contracts, or any class of those contracts, may be entered into.

(3) If a contract of a kind referred to in subsection (1) relates to asset covered securities issued by, and mortgage credit assets or substitution assets that are included in a cover assets pool maintained by, a designated mortgage credit institution, the institution shall ensure that the contract complies with the requirements of subsections (4) and (5).

(4) A contract of the kind referred to in subsection (3) may relate only to—

(a) mortgage covered securities issued by the institution, and

(b) mortgage credit assets or substitution assets that are included in a cover assets pool maintained by it.

(5) A contract of the kind referred to in subsection (3) must—

(a) state that the contract is a cover assets hedge contract entered into in accordance with this Act and that the financial obligations of the institution under the contract are secured on the cover assets comprised in a cover assets pool maintained by the institution in accordance with this Act, and

(b) comply with the requirements (if any) specified in any relevant regulatory notice published under subsection (2).

(6) As soon as practicable after entering into a contract of a kind referred to in subsection (3), a designated mortgage credit institution shall ensure that particulars of the contract are entered into its register of mortgage covered securities business.

(7) A designated mortgage credit institution must comply with any requirements imposed under subsection (2).

(8) A designated mortgage credit institution shall remove from its register of mortgage covered securities business the entry relating to a contract of the kind referred to in subsection (3), but only if—

(a) the contract has been discharged, or

(b) the person with whom the contract was entered into has agreed.

(9) Subsection (5) ceases to apply to a contract of the kind referred to in subsection (3) when the entry relating to the contract is removed from a register of mortgage covered securities business in accordance with subsection (8).