Related provisions for RCB 3.5.1
1 - 11 of 11 items.
To enable the FCA to be satisfied that the issuer and the proposed owner will comply with requirements imposed on the issuer or owner, as the case may be, by or under the RCB Regulations, the applicant should use the application form to provide relevant details of the proposed covered bond or programme and demonstrate how each of the requirements will be complied with.
In relation to registration of an issuer of regulated covered bonds, the FCA will need to be satisfied that the issuer's compliance with the requirements of the regulatory system has been adequate and does not give rise to any material cause for concern over the issuer's ability to issue regulated covered bonds in compliance with the RCB Regulations.
To demonstrate that the issuer and the proposed owner will comply with Regulation 17, and Regulations 23 and 24 of the RCB Regulations (capability of the asset pool to cover claims), the issuer should set out what it considers to be the risks of the regulation not being complied with and show how those risks have been adequately mitigated by reference to the tests and provisions set out in the covered bond or programme documentation.
Regulations 17(2)(d) (requirements on issuer relating to the asset pool) and 23(2) (requirements on owner relating to the asset pool) require the issuer of a regulated covered bond and the owner of the relevant asset pool to make arrangements so that the asset pool is of sufficient quality to give investors confidence that in the event of the failure of the issuer there will be a low risk of default in the timely payment by the owner of claims attaching to a regulated covered
The FCA expects the issuer to demonstrate that there are provisions in the covered bond or programme that adequately deal with:(1) the identification and rectification of any breach of Regulations 17(2) (general requirements on issuer in relation to the asset pool) and 24 (requirements on owner relating to the asset pool) of the RCB Regulations;(2) the appointment of replacements for parties, for example servicers, cash managers or paying agents; and(3) the orderly winding-up
The FCA expects the issuer to demonstrate, as part of showing that Regulations 17 (general requirements on issuer in relation to the asset pool) and 24 (requirements on owner relating to the asset pool) of the RCB Regulations will be complied with, that there are provisions in the covered bond or programme which enable the views and interests of investors in the regulated covered bond to be taken account of in an appropriate and timely way by a suitably qualified, adequately resourced,
(1) The FCA expects legal advice to deal adequately with at least the following matters in relation to the actual or proposed arrangements:(a) whether the transfer of the assets to the owner would be upheld in the event of liquidation or administration, or similar collective insolvency proceedings, of the issuer or the transferor (if different from the issuer);(b) the risk of the transfer of an asset to the owner being re-characterised as the creation of a security interest;(c)
(1) The FCA expects the report from the accountants to address at least the following matters:(a) that the level of over collateralisation meets the limits set out in the covered bond arrangements which are designed to ensure compliance with the requirement that the asset pool is capable of covering claims attaching to the bond in Regulation 17 (requirements on issuer in relation to the asset pool) of the RCB Regulations; and(b) that appropriate due diligence procedures (which
1Assets which would be eligible for inclusion in a liquidity buffer under BIPRU 12.7 can be liquid assets for the purposes of limb (a) of the definition of liquid assets in Regulation 1(2) of the RCB Regulations. The FCA will also expect that liquid assets which consist of deposits should be held in the same currency or currencies as the regulated covered bonds issued by the issuer.
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).
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.
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.
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.
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) details of the proposed change including proposed date of change and the reasons for it;(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
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.
When making a decision on an application
for registration under the RCB Regulations,
or in relation to material changes to the contractual terms of the regulated covered bond, or in relation to
a change of owner, or when
seeking to use direction, revocation or penalty powers, the RCB
Regulations require the FCA to give the subject of the intended
action a warning notice and
a decision notice. The recipient
of a warning notice has the
right to make representations to the decision
Decisions on applications for registration,
in relation to material changes to contractual terms of the regulated
covered bond, or in relation to a change of owner, or decisions
to issue a direction under the RCB Regulations or
to revoke an issuer's registration,
will be taken under executive procedures following
the process set out in DEPP 4.
1The RCB Regulations provide a framework for issuing covered bonds in the UK.
Covered bonds issued under the RCB Regulations are subject to strict quality controls and both bonds and issuers must be registered with the FCA. The RCB Regulations give the FCA powers to enforce these Regulations. Where a person has failed, or is likely to fail, to comply with any obligation under the RCB Regulations, the FCA may make a direction that the person take
1The FCA's approach to the use of its enforcement powers, and its statement of policy in relation to imposing and determining financial penalties under the RCB Regulations, are set out in RCB 4.2. The FCA's penalty policy includes having regard, where relevant, DEPP 6.5 to DEPP 6.5D and such other specific matters as the likely impact of the penalty on the interests of investors in the relevant bonds. The FCA's statement of procedure in relation to giving warning notices or decision
(1) When deciding whether to take enforcement
action under Part 7 of the RCB Regulations,
and what form that enforcement action should take, the FCA will consider all relevant factors,
including:(a) the relevant factors on decisions to take action set out in DEPP 6.2.1 G;(b) whether any contractual or other arrangements agreed between the
parties can be used effectively to address any perceived failure under the RCB Regulations; and(c) the interests of investors in the relevant
The issuer must ensure that a director or a1senior manager of the issuer verifies the application by confirming on the FCA's form that the issuer has obtained the appropriate third party advice or reports as required by RCB 2.3.16 D and is satisfied that:(1) the information provided in the application is correct and complete; and (2) the arrangements relating to the covered bond or programme will comply with the requirements in the RCB Regulations and in RCB.