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RCB 3.1 Application and Purpose

Application

RCB 3.1.1 G

1This chapter applies to issuers, asset pool monitors2 and owners.

Purpose

RCB 3.1.2 G

This chapter sets out the reporting and notifications requirements under Regulations 17A,2 18, 20, 24 and 25 of the RCB Regulations.

RCB 3.2 Annual confirmations of compliance and asset pool monitor1

Form of confirmation and use of third party advisers and asset pool monitor's report

RCB 3.2.1 D

The issuer must send to the FCA annual written confirmation of compliance with Regulations 16 (sums derived from the issue of regulated covered bonds) and 17 (general requirements on the issuer in relation to the asset pool) of the RCB Regulations in the form set out in RCB 3 Annex 1D (annual confirmation of compliance).

RCB 3.2.2 D

Before providing the confirmation required by this section, the issuer must obtain and consider written advice or reports from suitable independent third parties1 such as the asset pool monitor1 and, where appropriate, lawyers.

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RCB 3.2.3 G

The FCA expects the issuer to be able to justify any reliance it places on advice or reports which are not reasonably contemporaneous with the confirmation.

RCB 3.2.4 G

The FCA expects the asset pool monitor's report1 to address at least the matters to be checked and due diligence procedures set out in RCB 2.3.18 G. The FCA may also specify additional matters that the asset pool monitor's report should address in relation to a particular issuer.1

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RCB 3.2.4A G

1The FCA's use of its power under Regulation 18 of the RCB Regulations may include requiring the issuer to provide to the FCA copies of the advice or reports referred to in RCB 3.2.2 D.

RCB 3.2.4B D

1The issuer must provide a copy of the asset pool monitor's report to the FCA when it sends the confirmation required by this section to the FCA.

Timing of confirmation date

RCB 3.2.5 D
  1. (1)

    The first confirmation date in relation to the annual confirmation must be the earlier of any date the issuer selects, or the date 12 months from the registration date.

  2. (2)

    Subsequent confirmations must be made on the anniversary of the first confirmation date.

RCB 3.2.6 D

The issuer must send each confirmation to the FCA within one month after the relevant confirmation date.

Period covered by confirmation

RCB 3.2.7 D

The first confirmation must cover compliance during the period from the registration date up to the confirmation date referred to in RCB 3.2.5 D (1).

RCB 3.2.8 D

Subsequent confirmations must cover compliance for the period from the last confirmation date to the date of the current confirmation.

Verification of confirmation

RCB 3.2.9 D

The issuer must ensure that a director or1 a senior manager signs the annual confirmation and confirms on the FCA's form that the issuer has obtained the appropriate third party advice or reports required by this section.

RCB 3.2.9A G

1Where possible, the director or senior manager who signs the annual confirmation should be the same director or senior manager who has verified the application for registration under RCB 2.2.6 D. If the director or senior manager is different to the director or senior manager who verified the application for registration, the issuer should notify the FCA at least one month before sending the confirmation to the FCA.

Notifications by the owner

RCB 3.2.10 D

If the issuer is in insolvency, the owner must send the FCA under RCB 3.2.1 D:

  1. (1)

    a confirmation of compliance within one month of the date of insolvency; and

  2. (2)

    annual confirmations by the same dates as the date the confirmations under RCB 3.2.5 D are due.

RCB 3.2.11 D
  1. (1)

    The owner must ensure that a duly authorised representative signs the confirmation and confirms on the FCA's form that the owner has obtained the appropriate third party advice or reports required by this section.

  2. (2)

    The owner must obtain appropriate advice in the same manner as set out in RCB 3.2.2 D and must provide a copy of the asset pool monitor's report to the FCA as set out in RCB 3.2.4B D.1

Review by asset pool monitor1

RCB 3.2.12 G

1In addition to requiring the asset pool monitor to prepare an annual report, Regulation 17A of the RCB Regulations requires that the asset pool monitor must inspect the compliance of the issuer or owner (as the case may be) with the requirements in Regulations 16, 17 or 24 of the RCB Regulations once every 12 months.

RCB 3.2.13 G

1The FCA expects the inspection by the asset pool monitor of the compliance of the issuer or owner (as the case may be) with the relevant requirements in the RCB Regulations to address at least the matters to be checked and due diligence procedures set out in RCB 2.3.18 G. The FCA expects that the inspection will be conducted on an agreed-upon-procedures basis.

RCB 3.2.14 G

1As required under Regulation 17A of the RCB Regulations, if it appears to the asset pool monitor that the issuer or owner (as the case may be) has failed to comply with the requirements set out in Regulations 17 or 24 of the RCB Regulations, or has not provided all relevant information or explanations, the asset pool monitor must report that to the FCA in writing as soon as possible.

Change of asset pool monitor

RCB 3.2.15 G

1If the asset pool monitor is changed, the issuer (or owner, as the case may be) should notify the FCA when the new asset pool monitor is appointed, giving the name of the new asset pool monitor and details of the reason for the change.

RCB 3.3 Asset pool notifications

Form of notifications1

RCB 3.3.1 D

The issuer must send to the FCA, information relating to the asset pool, in the form set out in RCB 3 Annex 2D (asset notification form), and information relating to the regulated covered bonds issued under the programme, in the form set out in RCB 3 Annex 3 D (asset and liability profile form).1

RCB 3.3.2 D

The issuer must send the asset notification form1 to the FCA each month following the registration date, and the asset and liability profile form to the FCA1 within one month of the end of each quarter following the registration date.

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RCB 3.3.2A D

1The issuer must send to the FCA loan-by-loan level data relating to the asset pool in the form set out in RCB 3 Annex 7A D within one month of the end of each quarter following any issuance of regulated covered bonds after 1 January 2013. Guidance on how to complete this form is set out in RCB 3 Annex 7B G.

Notifications by the owner

RCB 3.3.3 D

If the issuer is in insolvency, the owner must send to the FCA the notifications set out at RCB 3.3.1 D and RCB 3.3.2A D1 by the same dates as the dates the notifications under those directions are due.

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Due diligence

RCB 3.3.4 G

The issuer or the owner, as the case may be, should carry out, or make arrangements to carry out, appropriate due diligence to check that the analysis in the information provided to the FCA is correct.

1

Addition or removal of assets from the asset pool1

RCB 3.3.5 D

1If the issuer or the owner (as the case may be) proposes to add or remove assets to or from the asset pool which change the level of over collateralisation by 5% or more, it must notify the FCA using the form set out in RCB 3 Annex 2 D (asset notification form) at least 5 business days prior to the proposed transfer, giving expected details of the size and composition of the transfer.

RCB 3.4 Covered Bond issuance notifications

RCB 3.4.1 D

The issuer must inform the FCA of the information relating to bond issuances from a regulated covered bond in the form set out in RCB 3 Annex 4 D (indicative terms form) at least 3 business days1 before the date of issuance.

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RCB 3.4.2 D

1On the date of issuance, the issuer must send to the FCA:

  1. (1)

    the information in the form set out in RCB 3 Annex 5 D (issuance form);

  2. (2)

    the information in the form set out in RCB 3 Annex 3 D (asset and liability profile form); and

  3. (3)

    the final terms of the regulated covered bonds or equivalent issuance documents setting out the terms of the regulated covered bonds and signed copies of swap documents.

RCB 3.5 Other notifications

Notifications of change of owner

RCB 3.5.1 G

Regulation 25 of the RCB Regulations (change of owner) sets out the procedures which apply where a regulated covered bond has been issued and the owner of the relevant asset pool proposes to transfer ownership to another person.

RCB 3.5.2 D

If an owner proposes to transfer the asset pool to a new owner it must provide the FCA as a minimum with the following information in writing at least three months before the proposed transfer date:

  1. (1)

    name, address and contact details of the proposed new owner;

  2. (2)

    proposed transfer date and reasons for the transfer;

  3. (3)

    an explanation of how the proposed new owner will comply with the requirements imposed on it by the RCB Regulations and RCB; and

  4. (4)

    confirmation that the existing owner and the proposed new owner have obtained appropriate advice in relation to the proposed transfer, and details of such advice.

Notifications of material changes

RCB 3.5.3 G

Regulation 20 of the RCB Regulations (material changes to the regulated covered bond) sets out the procedures which apply where an issuer proposes to make a material change to the contractual terms of the bond.

RCB 3.5.4 D

If an issuer proposes to make a material change to the contractual terms of a regulated covered bond, it must inform the FCA of the following information to the FCA at least 3 months before the proposed date of the change:

  1. (1)

    details of the proposed change including proposed date of change and the reasons for it;

  2. (2)

    an assessment of the impact of the change on the ability of the issuer and owner to continue to comply with their requirements under the RCB Regulations and RCB; and

  3. (3)

    confirmation that the issuer has obtained appropriate advice in relation to the proposed change and details of such advice.

RCB 3.5.5 G

The FCA will regard as material any change that may affect the ability of the issuer or the owner to continue to comply with the requirements made on them under the RCB Regulations and RCB.

Notifications to the FCA if asset pool is not capable or not likely to be capable of covering claims and of other matters

RCB 3.5.6 D

The issuer or the owner, as the case may be, must notify the FCA immediately, in writing by e-mail or hand-delivered letter, if Regulation 18(2), or 24(1)(c) of the RCB Regulations (obligation to inform FCA if asset pool not capable, or not likely to be capable of covering claims) is triggered.

RCB 3.5.7 D

The issuer or the owner, as the case may be, must notify the FCA immediately in writing by e-mail, or hand-delivered letter, if requirements relating to the relevant regulated covered bond under the RCB Regulations or RCB are, or are likely to be, materially breached, or of any other matter which the FCA should be made aware of.

RCB 3.5.8 G

The issuer or the owner, as the case may be, should include details of proposals to rectify the breach at the time they notify, or as soon as practicable after that time.

Notification of cancellation

RCB 3.5.9 D

1The issuer must notify the FCA if it proposes to cancel in full or in part a regulated covered bond or programme at least 3 business days before the cancellation will take effect.

RCB 3.5.10 D

1The issuer must send to the FCA the information in the form set out in RCB 3 Annex 6 D and an updated asset and liability profile form (RCB 3 Annex 3 D) on the date of cancellation of the regulated covered bond or programme.

Publication of asset pool information and transaction documents

RCB 3.5.11 D

1The issuer must publish the asset notification form sent to the FCA under RCB 3.3.1 D.

RCB 3.5.12 D

1The issuer must publish the information relating to the individual loan assets in the asset pool in the form set out in RCB 3 Annex 7A D (loan level disclosure) within one month of the end of each quarter following any issuance of regulated covered bonds after 1 January 2013.

RCB 3.5.13 D

1The issuer must publish the transaction documents (excluding legal opinions) relating to the regulated covered bond or programme.

RCB 3.5.14 G

1The publication of the information and documents required under RCB 3.5.11 D, RCB 3.5.12 D and RCB 3.5.13 D should be made on a subscription-only, secure, password-protected website. This website should also contain a link to the latest published prospectus relating to the relevant regulated covered bond or programme.

RCB 3.5.15 G
  1. (1)

    1The transaction documents published under RCB 3.5.13 D should include the asset sale agreement, the servicing agreements, the administration and cash management agreements, the trust deed, the security deed, the agency agreements, the account bank agreement, the guaranteed investment contract, the master definitions agreement, intercompany loan agreements, the LLP deed, the asset monitor agreement, the swap documentation, the final terms of the regulated covered bonds or equivalent issuance documents setting out the terms of the regulated covered bonds and, if applicable, liquidity facility agreements.

  2. (2)

    1Where the transaction documents contain sensitive commercial terms (such as the up-front costs associated with a swap), the issuer may redact these terms for the purposes of publication, provided the relevant transaction documents are non-public and the relevant redacted terms refer to sunk costs which do not impact the transaction cash flows.

RCB 3.5.16 D

1If the issuer is in insolvency, the owner must publish the information set out at RCB 3.5.11 D and RCB 3.5.12 D in accordance with those directions.

RCB 3.6 Fees and other matters

Administrative fee

RCB 3.6.1 R

If an issuer or owner does not provide the notifications to the FCA required by directions made under this chapter by the date specified, then that issuer or owner must pay to the FCA an administrative fee of £250.

Further information and direction

RCB 3.6.2 G

The FCA's exercise of its powers under Part 1 paragraph 3 of the Schedule to the RCB Regulations (power to require information) may include requesting information on the reviews undertaken or advice given by accountants and where appropriate lawyers.

RCB 3.6.3 G

The form and content of the notifications in this chapter are a matter for direction by the FCA which will determine any additional information and documentation required on a case-by-case basis.

Review of legal advice

RCB 3.6.4 G

The issuer or the owner, as the case may be, should review legal advice as necessary. For example, advice should be reviewed if a relevant statutory provision is amended or where a new decision or judgment of a court might have a bearing on the conclusions reached which is material to the issuer's or owner's compliance with the requirements of the RCB Regulations or the RCB.

Method of sending forms and information to FCA

RCB 3.6.5 D

Unless otherwise stated, the issuer or the owner, as the case may be, must send the relevant forms and information to the FCA's address marked for the attention of the "Covered Bonds Team, Capital Markets Sector" by any of the following methods:

  1. (1)

    post; or

  2. (2)

    leaving it at the FCA's address and obtaining a time-stamped receipt; or

  3. (3)

    email to rcb@fca.org.uk.

RCB 3 Annex 1 Annual confirmation of compliance with the RCB Regulations and the RCB Sourcebook

This annex consists only of one or more forms. Forms are to be found through the following address:

Annual confirmation of compliance with the RCB Regulations and the RCB Sourcebook - rcb_chapter3_annex1d_20130401.pdf12

RCB 3 Annex 2 Asset pool notification form

This annex consists only of one or more forms. Forms are to be found through the following address:

Asset pool notification form - RCB_03_ann_02_20161104.xlsx3

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RCB 3 Annex 3 2Asset and liability profile form2

This annex consists only of one or more forms. Forms are to be found through the following address:

2 Asset and liability profile form- rcb_chapter3_annex3d12

2

RCB 3 Annex 4 Indicative terms form

1This annex consists only of one or more forms. Forms are to be found through the following address:

Indicative terms form- RCB_03_ann_04_20161104.xls2

RCB 3 Annex 5 Issuance form

1This annex consists only of one or more forms. Forms are to be found through the following address:

Issuance form- RCB_03_ann_05_20161104.xls2

RCB 3 Annex 6 Cancellation form

1This annex consists only of one or more forms. Forms are to be found through the following address:

Cancellation form- RCB_03_ann_06_20161104.xls2

RCB 3 Annex 7A Loan level disclosure form

1This annex consists only of one or more forms. Forms are to be found through the following address:

Loan level disclosure form- RCB_03_ann_07A_20161104.xls2

RCB 3 Annex 7B Guidance on loan level disclosure form

1This annex consists only of one or more forms. Forms are to be found through the following address:

Guidance on loan level disclosure form- rcb_chapter3_annex7bg_20130101.xls