RCB 1 Introduction

This sourcebook applies to issuers and owners in relation to regulated covered bonds.

The general purpose of this sourcebook is to set out the guidance, directions and rules made by the FCA under the RCB Regulations. Those regulations enable bonds to be issued which qualify under COLL 5.2.11R(5A) and 5.6.7R(3A) for a concession from the general spread of risk requirements in respect of transferable securities.

This sourcebook should be read together with the RCB Regulations.

This section refers to some of the other parts of the FCA Handbook and PRA Handbook which may be relevant to regulated covered bonds.

Investors in regulated covered bonds may be able to take advantage of different regulatory treatments depending on what type of investor they are.

An insurer (which is not a UK Solvency II firm or a non-directive friendly society) may benefit from increased counterparty limits under INSPRU 2.1.22R (3)(b). An insurer which is a UK Solvency II firm is subject to the rules in the PRA Rulebook which transposed the Solvency II Directive and also to the Solvency II Regulation (EU) 2015/35 of 10 October 2014.

UCITS schemes and non-UCITS retail schemes may benefit from less onerous spread requirements and increased investment limits under COLL 5.2.11 R and COLL 5.6.7 R.

1. (1)

   Issuers which are subject to an obligation to publish a prospectus under the rules in PRM are required to disclose risk factors. These requirements are set out in PRM 4 and PRM App 2.

2. (2)

    In complying with these obligations, issuers should consider disclosing the risk that actions by a regulatory authority in relation to the issuer may adversely affect the ability of the issuer to meet its obligations to investors or the ability of the owner to meet its guarantee obligations to investors. An example of such action may include restricting the issuer's ability to transfer further assets to the asset pool.