Asset Covered Securities Act, 2001

Restrictions on business activities of designated public credit institution.

46.—(1) If a designated public credit institution holds public credit assets or substitution assets that are located in one or more category B countries the institution shall ensure that the total prudent market value of those assets, expressed as a percentage of the total prudent market value of all of the public credit assets and substitution assets held by the institution at the relevant time, does not exceed the prescribed percentage. For the purposes of this subsection, the prescribed percentage is 10 per cent or, if an order under subsection (3) specifies some other percentage, that other percentage.

(2) A designated public credit institution shall ensure that the total value of the credit transaction assets and tier 2 assets that it holds, expressed as a percentage of the total value of all of the institution's assets, does not at any time exceed the prescribed percentage. For the purposes of this subsection—

(a) “value” means the value determined in accordance with section 56 (5), and

(b) the prescribed percentage is 10 per cent or, if an order under subsection (3) specifies some other percentage, that other percentage.

(3) The Minister may, by order notified in Iris Oifigiúil, vary the percentage referred to in subsection (1) or (2).

(4) For the purpose of ensuring the proper and orderly regulation of designated public credit institutions, the Authority may, by notice in writing given to the institution or institutions concerned, impose on any specified designated public credit institution or on any class of designated public credit institutions, requirements or restrictions as to the kinds of credit transaction assets or tier 2 assets that the institution or institutions may hold. Any designated public credit institution to which such a notice is given is required to comply with the notice.

(5) A designated public credit institution may not issue further public credit covered securities if the total of the principal amounts of all such securities currently issued by the institution would, after the issue of those further securities, exceed the own funds multiple with respect to the total of its own funds.

(6) For the purposes of subsection (5)

“own funds”, in relation to a designated public credit institution, means the own funds of the institution as determined in accordance with the Codified Banking Directive;

“own funds multiple” means a multiple of 50 or, if another number is specified in an order made under subsection (7), the other number.

(7) The Minister may, by order notified in Iris Oifigiúil, vary the number referred to in the definition of “own funds multiple” in subsection (6).