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ASSET COVERED SECURITIES ACT, 2001

Type Act

Publication 2001-12-18

Last updated 2026-02-13

State Partially repealed superseded text

Text As published

Source Irish Statute Book

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articles 106

This is the act as published. Later amendments are not folded into the text below: each one is a separate act in this repository and an entry in this law's history.

18 amending acts · 2026-02-13, S.I. No. 33/2026 - European Union (European Single Access Point) (No. 2) Regulations 2026

Act to facilitate the establishment and operation of a market in Asset Covered Securities, and to amend the Building Societies Act, 1989 and certain other enactments, and to provide for related matters

Reform history JSON API

(c) that the total amount of interest payable in a given period of 12 months in respect of the pool is during that 12 month period not less than the total amount of interest payable in respect of that period on those securities, and

(d) that the currency in which each mortgage credit asset and each substitution asset included in the pool is denominated is the same as the currency in which those securities are denominated,

after taking into account, in the case of paragraphs (b), (c) and (d), the effect of any cover assets hedge contract that the institution has entered into in relation to the pool and those securities.

(9) For the purposes of subsection (8)(a), “duration” means, in relation to a cover assets pool or mortgage covered securities—

(a) if interest payable in respect of a mortgage credit asset or substitution asset included in the pool, or in respect of the securities, is variable, a discounted weighted average term to maturity of the relevant principal amount of the pool or securities, or

(b) if interest payable in respect of a mortgage credit asset or substitution asset included in the pool, or in respect of the securities, is fixed, a discounted weighted average term to maturity of the relevant principal and interest payable but unpaid in respect of the pool or securities,

determined in accordance with a formula or criteria specified in a regulatory notice made for the purposes of this subsection, using appropriate zero coupon interest rates and taking into account the effect of any relevant cover assets hedge contract entered into by the institution in relation to the pool and those securities.

(10) The Authority may, by regulatory notice published in Iris Oifigiúil, specify a formula or criteria for the purposes of the definition of “duration” in subsection (9).

(11) For the purpose of subsection (8)(b), if the principal amount of a mortgage credit asset included in a cover assets pool represents more than the mortgage loan to value percentage of the prudent market value of the related property assets, the amount by which the principal amount of the asset exceeds the loan to value percentage is to be disregarded.

(12) For the purposes of this section, the prudent market value of a property asset which relates to a mortgage credit asset is required to be calculated only at the time when the related mortgage credit asset is included in the cover assets pool.

(13) For the purposes of subsection (11), the mortgage loan to value ratio is—

(a) 75 per cent in the case of a mortgage credit asset that comprises residential property, and

(b) 60 per cent in the case of a mortgage credit asset that comprises commercial property,

or, if an order made under subsection (14) specifies some other percentage, that other percentage.

(14) The Minister may, by order notified in Iris Oifigiúil, vary the percentages referred to in subsection (13).

33 What can be included in a cover assets pool maintained by a designated mortgage credit institution.

33.—(1) Any mortgage credit asset or substitution asset located within an EEA country may be included in a cover assets pool maintained by a designated mortgage credit institution.

(2) A designated mortgage credit institution may not include in a cover assets pool maintained by the institution a mortgage credit asset or substitution asset that is located within one or more category A countries if, after the inclusion of the asset in the pool, the total prudent market value of all mortgage credit assets and substitution assets comprised in the pool located in all such countries would exceed the prescribed percentage of the total prudent market value of all mortgage credit assets and substitution assets that are then included in the pool. For the purposes of this subsection, the prescribed percentage is 15 per cent or, if the regulations prescribe some other percentage, that percentage.

(3) A designated mortgage credit institution may include in a cover assets pool maintained by the institution mortgage credit assets or substitution assets that are located within a category B country only if—

(a) the country is a country designated by an order made under subsection (4), and

(b) the institution complies with any restrictions specified in the order.

(4) The Minister may, by order notified in Iris Oifigiúil, specify a category B country for the purposes of subsection (3). The Minister shall include in such an order restrictions as to the prudent market value of the mortgage credit assets and substitution assets referred to in subsection (3) that a designated mortgage credit institution can include in the cover assets pool as a percentage of the total prudent market value of mortgage credit assets and substitution assets included in the pool.

(5) A designated mortgage credit institution may not include in a cover assets pool a mortgage credit asset that is secured on commercial property if, after inclusion of the asset in the pool, the total prudent market value of all mortgage credit assets so secured would exceed the prescribed percentage of the total prudent market value of all mortgage credit assets and substitution assets then comprised in the pool. For the purposes of this subsection, the prescribed percentage is 10 per cent or, if the regulations prescribe some other percentage, that other percentage.

(6) A designated mortgage credit institution may not include in a cover assets pool a mortgage credit asset if a building related to that mortgage credit asset is being or is to be constructed until the building is ready for occupation as a commercial or residential property.

34 What action is to be taken by a designated mortgage credit institution that is in breach of cover assets pool provisions.

34.—(1) A designated mortgage credit institution shall, as soon as practicable after becoming aware that it has contravened section 32(1), (4) (5) or (7) or section 33(2), (3), (5) or (6), take all possible steps to prevent the contravention from continuing or being repeated. Until those steps have been taken, the institution may not issue any further mortgage covered securities.

(2) A designated mortgage credit institution is required, as soon as practicable after becoming aware that it has failed to comply with section 32(8), to take all possible steps to comply with the subsection. Until those steps have been taken, the institution may not issue any further mortgage covered securities.

(3) Where appropriate, the steps to be taken under this section include acquiring other mortgage credit assets or substitution assets for inclusion in the cover assets pool.

35 Substitution of certain cover assets and restrictions on inclusion of substitution assets in cover assets pool of designated mortgage credit institution.

35.—(1) For the purposes of this section, “underlying asset”, in relation to a cover assets pool maintained by a designated mortgage credit institution, means a mortgage credit asset or a substitution asset that is then included in the pool.

(2) Subject to subsection (7), a mortgage credit asset or a substitution asset that replaces an underlying asset forms part of the relevant cover assets pool only if the replacement has been approved by the relevant cover-assets monitor.

(3) If an underlying asset included in a cover assets pool maintained by a designated mortgage credit institution contravenes or fails to comply with a provision of this Chapter, the regulations or a requirement of the Authority or the relevant cover-assets monitor made under such a provision, the institution shall, in accordance with this section, replace the underlying asset with a mortgage credit asset or substitution asset that the institution has acquired for the purpose or is currently holding.

(4) A designated mortgage credit institution may in any other case replace an underlying asset with a mortgage credit asset or a substitution asset that the institution has acquired for the purpose or is currently holding, but only if the replacement is not prohibited by a provision of this Chapter, the regulations or a requirement of the Authority or of the relevant cover-assets monitor under such a provision.

(5) A designated mortgage credit institution may not replace an underlying asset with a mortgage credit asset or a substitution asset if—

(a) the mortgage credit asset or substitution asset is currently contained in a different cover assets pool maintained by the institution,

(b) the mortgage credit asset or substitution asset is non-performing,

(d) the Authority has given to the institution a relevant direction, the effect of which is to prohibit the replacement from being made,

(e) a notice has been given by the Authority under section 19(3) informing the institution that it intends to seek the consent of the Minister to the revocation of the registration of the institution as a designated mortgage credit institution, or

(f) the Authority has given a direction under section 20 or 21 that prevents the replacement from being made.

(6) For the purposes of subsection (5)(d), “relevant direction” means a direction issued under—

(a) section 11 or 21 of the Central Bank Act, 1971,

(b) section 26 of the Trustee Savings Banks Act, 1989, or

(7) A designated mortgage credit institution may not, without the consent of the Authority, replace an underlying asset with a mortgage credit asset or a substitution asset if—

(a) the institution is potentially insolvent, or

(b) there is currently no cover-assets monitor appointed in respect of the institution.

(8) A designated mortgage credit institution may not at any time include a substitution asset in a cover assets pool maintained by the institution if, after including the asset in the pool, the total prudent market value of all substitution assets then included in the pool at the relevant time would exceed the prescribed percentage of the total prudent market value of all cover assets included in the pool. For the purposes of this subsection, the prescribed percentage is 20 per cent or, if an order under subsection (9) specifies some other percentage, that other percentage.

(9) The Minister may, by order notified in Iris Oifigiúil, vary the percentage referred to in subsection (8).

(10) The Authority may, by notice in writing given to a designated mortgage credit institution, suspend the application of subsection (8) to the institution for a specified period if it is satisfied that to do so would facilitate the discharge of secured claims against the institution. The notice may specify conditions subject to which the suspension is to have effect.

(11) The Authority may revoke a notice given under subsection (10) on the ground that the designated mortgage credit institution concerned has not complied with a condition specified in the notice.

(12) For the purpose of subsection (10), “secured claim” means a claim in respect of which the rights of a preferred creditor (other than a super-preferred creditor) are secured under Part 7.

36 Use of realised proceeds of cover asset by designated mortgage credit institution.

36.—(1) A designated mortgage credit institution may, with the prior consent of the cover-assets monitor concerned, use the proceeds of a cover asset that has been realised—

(a) to create or acquire permitted mortgage credit assets or substitution assets for inclusion in the relevant cover assets pool, or

(b) to discharge secured claims.

(2) Subsection (1) applies even if—

(a) the institution is subject to an insolvency process, or

(b) the institution has been given a notice of the kind referred to in section 35(5)(e).

(3) Money received by a designated mortgage credit institution as the proceeds of realising a cover asset forms part of the relevant cover assets pool, and is to be treated as part of the related mortgage credit asset or related substitution asset, until it—

(a) is used in accordance with subsection (1),

(b) is released from that pool as an underlying asset and is replaced with other mortgage credit assets or substitution assets that are included in the cover assets pool in accordance with section 35 or this section, or

(4) A designated mortgage credit institution may, with the prior consent of the cover-assets monitor concerned, release underlying assets (including money received by the institution as the proceeds of a cover asset) from the cover assets pool if the assets are not required by this Chapter to be included in the cover assets pool to secure secured claims.

(5) In this section—

“permitted”, in relation to mortgage credit assets or substitution assets, means mortgage credit assets or substitution assets that are permitted to be included in a cover assets pool in accordance with this Chapter;

“secured claim” means a claim that is secured under Part 7 in respect of a preferred creditor.

37 Inclusion of asset in, and removal of asset from, cover assets pool.

37.—For the purposes of sections 35 and 36, an asset is, except as provided by section 36(3), included in, or removed from, a cover assets pool when the appropriate particulars are recorded in the register of mortgage covered securities business.

38 Designated mortgage credit institution to keep register of mortgage covered securities business.

38.—(1) A designated mortgage credit institution shall establish and keep a register in respect of—

(a) the mortgage covered securities that it has issued,

(b) the cover assets hedge contracts that it has entered into, and

(2) The register is to be called the register of mortgage covered securities business.

(3) The register may be kept in book form, in electronic form or in any other form so long as the register is capable of being reproduced visually.

(4) The institution shall include in the register the following particulars—

(a) particulars of the mortgage covered securities that it has issued,

(b) the cover assets hedge contracts that it has entered into,

(c) particulars of the mortgage credit assets and substitution assets that it holds as security for those securities and contracts,

(d) such other particulars as are prescribed by the regulations for the purposes of this section.

(5) Except where the regulations otherwise provide, the institution may make or amend an entry in the register only with the consent of the relevant cover-assets monitor or the Authority.

(6) The institution shall keep the register in such place as may be prescribed by the regulations for the purpose of this subsection.

(7) If a designated mortgage credit institution is also a designated public credit institution, the institution is required to keep its register of mortgage covered securities business separate from its register of public credit covered securities business.

39 Authority and cover-assets monitor to have access to register of mortgage covered securities business.

39.—(1) The Authority, and each cover-assets monitor appointed in respect of a designated mortgage credit institution, are at all times entitled—

(a) to have access to the institution's register of mortgage covered securities business, and

(b) to take copies of the register or any entry in it at the expense of the institution.

(2) If the Authority, or the cover-assets monitor appointed in respect of a designated mortgage credit institution, by notice in writing so requires, the institution shall provide the Authority or monitor with a copy of—

(a) any specified register kept by the institution in accordance with this Chapter, or

(b) any specified entry in such a register.

(3) A reference in this section to the Authority includes a reference to any person authorised by the Authority for the purposes of this section.

40 Financial statements in respect of designated mortgage credit institution.

40.—(1) If a designated mortgage credit institution has a parent entity, the entity shall include the following information in its annual consolidated financial statement or in a document accompanying the statement—

(a) the name of the institution and any other particulars required by the regulations with respect to the institution,

(b) the total amounts of principal outstanding in respect of the mortgage covered securities issued by the institution,

(d) any other particulars prescribed by the regulations for the purposes of this subsection.

(2) A designated mortgage credit institution shall include the following information in its annual financial statement, or in a document accompanying the statement, in respect of mortgage credit assets that are recorded in the institution's register of mortgage covered securities business:

(a) the number of mortgage credit assets, as at the date to which the statement is made up, with the amounts of principal outstanding in respect of the related credits being specified in tranches of—

(i) €100,000 (£78,756.40) or less,

(ii) more than €100,000 (£78,756.40) but not more than €200,000 (£157,512.80),

(iii) more than €200,000 (£157,512.80) but not more than €500,000 (£393,782), and

(iv) more than €500,000 (£393,782);

(b) the geographical areas in which the related property assets are located, and the number and percentage of those assets held in each of those areas;

(c) whether or not any persons who owe money under mortgage credit assets have defaulted in making payments in respect of those assets when due and payable, and if they have—

(i) the number of those assets as at that date, and

(ii) the total amount of principal outstanding in respect of those assets at that date;

(d) whether or not any persons who owed money under mortgage credit assets had, during the immediately preceding financial year of the institution (if any), defaulted in making payments in respect of those assets in excess of €1,000 (£787.56) at any time during that year, and if any such persons had defaulted, the number of those assets that were held in the cover assets pool at the date to which the financial statement for that year was made up;

(e) the number of cases in which the institution has replaced mortgage credit assets with other assets because those mortgage credit assets were non-performing;

(f) the total amount of interest in arrears in respect of mortgage credit assets that has not been written off at that date;

(g) the total amount of payments of principal repaid and the total amount of interest paid in respect of mortgage credit assets;

(h) in relation to any related mortgage credits that are secured on commercial property, the number and the total amounts of principal of those credits that are outstanding at that date; and

(i) any other information prescribed by the regulations for the purposes of this subsection.

41 Valuation of assets held by designated mortgage credit institutions.

41.—(1) The Authority may, by regulatory notice published in Iris Oifigiúil, specify requirements in relation to the valuation basis and methodology, time of valuation and any other matter that it considers relevant for determining the prudent market value of mortgage credit assets or related property assets for the purposes of any provision of this Chapter.

(2) The prudent market value of mortgage credit assets or related property assets is to be determined in accordance with a regulatory notice published in accordance with subsection (1).

(3) The Authority may, by regulatory notice published in Iris Oifigiúil, specify requirements in relation to the valuation basis and methodology, time of valuation and any other matter that it considers relevant for determining the prudent market value of substitution assets held by a designated mortgage credit institution for the purposes of this Chapter.

(4) The prudent market value of substitution assets that are in the form of securities is to be determined in accordance with a regulatory notice published in accordance with subsection (3).

(5) The Authority may, by regulatory notice published in Iris Oifigiúil, specify requirements in relation to the valuation basis and methodology, time of valuation and any other matter that it considers relevant for determining the value of tier 2 assets, credit transaction assets or the total assets, held by a designated mortgage credit institution for the purposes of this Act.

(6) The value of assets referred to in subsection (5) is to be determined in accordance with a regulatory notice made under that subsection.

Chapter 2 Issue of asset covered securities by designated public credit institutions

42 Interpretation (Chapter 2).

42.—(1) For the purposes of this Chapter, the following activities are permitted business activities but only if carried out in accordance with this Act:

(a) providing public credit and dealing in and holding public credit assets;

(b) dealing in and holding substitution assets;

(c) dealing in and holding assets of a kind that, in accordance with a requirement of the Authority made under the supervisory enactments, designated public credit institutions are required to hold for regulatory purposes;

(d) dealing in and holding credit transaction assets;

(e) dealing in and holding tier 2 assets;

(f) engaging in activities connected with financing or refinancing assets of a kind mentioned in paragraphs (a) to (e);

(g) entering into contracts in accordance with section 45 for the purpose of hedging risks associated with any other activity of a kind mentioned in paragraphs (a) to (f); and

(h) engaging in activities that are incidental or ancillary to carrying on any other activity mentioned in paragraphs (a) to (g).

(2) The activities referred to in subsection (1)(f) include (but are not limited to)—

(a) taking deposits or other repayable funds from the public, and

(b) issuing asset covered securities.

(3) For the purposes of this Chapter—

“credit transaction”, in relation to a designated public credit institution, means—

(a) placing a deposit with an eligible financial institution designated or of a class designated under subsection (4),

(b) dealing with or holding a financial asset, or

“credit transaction asset” means an asset derived from having engaged in a credit transaction (not being a hedge contract entered into in accordance with section 45), but does not include a public credit asset, mortgage credit asset, substitution asset or tier 2 asset.

(4) The Authority shall, by order notified in Iris Oifigiúil, designate one or more financial institutions, or financial institutions of one or more specified classes, to be eligible financial institutions for the purposes of paragraph (a) of the definition of “credit transaction” in subsection (3).

(5) The Minister may, by order notified in Iris Oifigiúil—

(a) designate a transaction of a specified kind to be a credit transaction for the purposes of the definition of “credit transaction” in subsection (3), or

(b) declare a transaction of a specified kind to be no longer a credit transaction for those purposes.

43 Designated public credit institution to carry on permitted business activities only.

43.—A designated public credit institution may not carry on a business activity other than a permitted business activity. However, this section does not prevent such an institution that is also a designated mortgage credit institution from carrying on business activities that can be lawfully carried on by a designated mortgage credit institution.

44 Power of designated public credit institution to issue public credit covered securities.

44.—(1) A designated public credit institution may issue public credit covered securities, but only in accordance with this Act.

(2) A designated public credit institution that issues a public credit covered security shall ensure that the relevant security document states—

(a) that the security is a public credit covered security, and

(b) that the financial obligations of the institution under the security are secured on the cover assets that comprise a cover assets pool maintained by the institution in accordance with this Act.

45 Designated public credit institution may enter into certain kinds of contracts.

45.—(1) A designated public 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

(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 public 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 public credit assets or substitution assets that are included in a cover assets pool maintained by, a designated public 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) public credit covered securities issued by the institution, and

(b) public 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 public credit institution shall ensure that particulars of the contract are entered into its register of public credit covered securities business.

(7) A designated public credit institution is required to comply with any requirements imposed under subsection (2).

(8) A designated public credit institution shall remove from its register of public credit covered securities business 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 public credit covered securities business in accordance with subsection (8).

46 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).

47 Designated public credit institution to establish and maintain cover assets pool.

47.—(1) A designated public credit institution may issue public credit covered securities only if it is maintaining a related cover assets pool that complies with this Chapter.

(2) After a designated public credit institution is registered, the institution may, for the purpose of establishing a cover assets pool and enabling it to make an initial issue of public credit covered securities, include in its register of public credit covered securities business public credit assets or substitution assets in accordance with this Chapter.

(3) If a designated public credit institution wishes at any time to issue further public credit covered securities, it may include in the relevant cover assets pool public credit assets or substitution assets as security for those securities in accordance with this Chapter.

(4) Subject to subsection (7), a public credit asset or a substitution asset referred to in subsection (2) or (3) forms part of the relevant cover assets pool only if its inclusion has been approved by the relevant cover-assets monitor.

(5) A designated public credit institution may not include a public credit asset or substitution asset in a cover assets pool in the circumstances referred to in subsection (2) or (3) if—

(a) the public credit asset or substitution asset is currently included in a different cover assets pool maintained by the institution,

(b) the public credit asset or substitution asset is non-performing,

(d) the Authority has given the institution a relevant direction, the effect of which is to prohibit the asset from being recorded in the institution's register of public credit covered securities business,

(e) the Authority has given the institution a notice under section 19(3) informing the institution that the Authority intends to seek the consent of the Minister to the revocation of the registration of the institution as a designated credit institution, or

(f) the Authority has given a direction under section 20 or 21, the effect of which is to prohibit the asset from being recorded in the institution's register of public credit covered securities business.

(6) For the purposes of subsection (5)(d), “relevant direction” means a direction issued under—

(a) section 11 or 21 of the Central Bank Act, 1971,

(b) section 26 of the Trustee Savings Banks Act, 1989, or

(7) A designated public credit institution may not, without the consent of the Authority, include a public credit asset or substitution asset in a cover assets pool maintained by the institution in the circumstances contemplated by subsection (2) or (3) if—

(a) the institution is potentially insolvent, or

(b) there is currently no cover-assets monitor appointed in respect of the institution.

(8) A designated public credit institution shall ensure—

(a) that a cover assets pool maintained by the institution has a duration of not less than that of the public credit covered securities that relate to the pool,

(b) that the prudent market value of the pool is greater than the total of the principal amounts of those securities,

(c) that the total amount of interest payable in a given period of 12 months in respect of the pool is during that 12 month period not less than the total amount of interest payable in respect of that period on those securities, and

(d) that the currency in which each public credit asset and each substitution asset included in the pool is denominated is the same as the currency in which those securities are denominated,

(9) For the purposes of subsection (8)(a), “duration” means, in relation to a cover assets pool or public credit covered securities—

(a) if interest payable in respect of a public credit asset or a substitution asset included in the pool, or in respect of the securities is variable, a discounted weighted average term to maturity of the relevant principal amount of the pool or securities, or

(b) if interest payable in respect of a public credit asset or a substitution asset included in the pool, or in respect of the securities, is fixed, a discounted weighted average term to maturity of the relevant principal and interest payable but unpaid in respect of the pool or securities,

(10) The Authority may, by regulatory notice published in Iris Oifigiúil, specify a formula or criteria for the purposes of the definition of “duration” in subsection (9).

48 What can be included in a cover assets pool maintained by a designated public credit institution.

48.—(1) Any public credit asset or substitution asset located within an EEA country or which is a financial obligation of an entity referred to in section 5(1)(e) may be included in a cover assets pool maintained by the designated public credit institution.

(2) A designated public credit institution may not include in a cover assets pool maintained by the institution a public credit asset or a substitution asset that is located within one or more category A countries if, after the inclusion of the asset in the pool, the total prudent market value of all public credit assets and substitution assets comprised in the pool located in all such countries would exceed the prescribed percentage of the total prudent market value of all public credit assets and substitution assets that are then included in the pool. For the purposes of this subsection, the prescribed percentage is 15 per cent or, if the regulations prescribe some other percentage, that percentage.

(3) A designated public credit institution may include in a cover assets pool maintained by the institution public credit assets or substitution assets that are located within a category B country only if—

(a) the country is a country designated by an order made under subsection (4), and

(b) the institution complies with any restrictions specified in the order.

(4) The Minister may, by order notified in Iris Oifigiúil, specify a category B country for the purposes of subsection (3). The Minister shall include in such an order restrictions as to the prudent market value of the public credit assets or substitution assets referred to in subsection (3) that a designated public credit institution can include in the cover assets pool as a percentage of the total prudent market value of public credit assets and substitution assets included in the pool.

49 What action is to be taken by a designated public credit institution that is in breach of cover assets pool provisions.

49.—(1) A designated public credit institution shall, as soon as practicable after becoming aware that it has contravened section 47(1), (4), (5) or (7) or section 48(2) or (3), take all possible steps to prevent the contravention from continuing or being repeated. Until those steps have been taken, the institution may not issue any further public credit covered securities.

(2) A designated public credit institution shall, as soon as practicable after becoming aware that it has failed to comply with section 47(8) take all possible steps to comply with the subsection. Until those steps have been taken, the institution may not issue any further public credit covered securities.

(3) Where appropriate, the steps to be taken under this section include acquiring other public credit assets or substitution assets for inclusion in the cover assets pool.

50 Substitution of certain cover assets and restrictions on inclusion of substitution assets in cover assets pool of designated public credit institution.

50.—(1) For the purposes of this section, “underlying asset”, in relation to a cover assets pool maintained by a designated public credit institution, means a public credit asset or a substitution asset that is then included in the pool.

(2) Subject to subsection (7), a public credit asset or a substitution asset that replaces an underlying asset forms part of the relevant cover assets pool only if the replacement has been approved by the relevant cover-assets monitor.

(3) If an underlying asset included in a cover assets pool maintained by a designated public credit institution contravenes or fails to comply with a provision of this Chapter, the regulations or a requirement of the Authority or the relevant cover-assets monitor made under such a provision, the institution shall, in accordance with this section, replace the underlying asset with a public credit asset or substitution asset that the institution has acquired for the purpose or is currently holding.

(4) A designated public credit institution may in any other case replace an underlying asset with a public credit asset or a substitution asset that the institution has acquired for the purpose or is currently holding, but only if the replacement is not prohibited by a provision of this Chapter, the regulations or a requirement of the Authority or of the relevant cover-assets monitor under such a provision.

(5) A designated public credit institution may not replace an underlying asset with a public credit asset or a substitution asset if—

(a) the public credit asset or substitution asset is currently contained in a different cover assets pool maintained by the institution,

(b) the public credit asset or substitution asset is non-performing,

(d) the Authority has given to the institution a relevant direction, the effect of which is to prohibit the replacement from being made,

(e) a notice has been given to the institution by the Authority under section 19(3) informing the institution that it intends to seek the consent of the Minister to the revocation of the registration of the institution as a designated public credit institution, or

(f) the Authority has given a direction under section 20 or 21 that prevents the replacement from being made.

(6) For the purposes of subsection (5)(d), “relevant direction” means a direction issued under—

(a) section 11 or 21 of the Central Bank Act, 1971,

(b) section 26 of the Trustee Savings Banks Act, 1989, or

(7) A designated public credit institution may not, without the consent of the Authority, replace an underlying asset with a public credit asset or a substitution asset if—

(a) the institution is potentially insolvent, or

(b) there is currently no cover-assets monitor appointed in respect of the institution.

(8) A designated public credit institution may not at any time include a substitution asset in a cover assets pool maintained by the institution if, after including the asset in the pool, the total prudent market value of all substitution assets then included in the pool at the relevant time would exceed the prescribed percentage of the total prudent market value of all cover assets included in the pool. For the purposes of this subsection, the prescribed percentage is 20 per cent or, if an order under subsection (9) specifies some other percentage, that other percentage.

(9) The Minister may, by order notified in Iris Oifigiúil, vary the percentage referred to in subsection (8).

(10) The Authority may, by notice in writing given to a designated public credit institution, suspend the application of subsection (8) to the institution for a specified period if it is satisfied that to do so would facilitate the discharge of secured claims against the institution. The notice may specify conditions subject to which the suspension is to have effect.

(11) The Authority may revoke a notice given under subsection (10) on the ground that the designated public credit institution concerned has not complied with a condition specified in the notice.

(12) For the purpose of subsection (10), “secured claim” means a claim in respect of which the rights of a preferred creditor (other than a super-preferred creditor) are secured under Part 7.

51 Use of realised proceeds of cover asset by designated public credit institution.

51.—(1) A designated public credit institution may, with the prior consent of the cover-assets monitor concerned, use the proceeds of a cover asset that has been realised—

(a) to create or acquire permitted public credit assets or substitution assets for inclusion in the relevant cover assets pool, or

(b) to discharge secured claims.

(2) Subsection (1) applies even if—

(a) the institution is subject to an insolvency process, or

(b) the institution has been given a notice of the kind referred to in section 50(5)(e).

(3) Money received by a designated public credit institution as the proceeds of realising a cover asset forms part of the relevant cover assets pool, and is to be treated as part of the related public credit asset or related substitution asset, until it—

(a) is used in accordance with subsection (1),

(b) is released from that pool as an underlying asset and is replaced by other public credit assets or substitution assets that are included in the cover assets pool in accordance with section 50 or this section, or

(4) A designated public credit institution may, with the prior consent of the cover-assets monitor concerned, release underlying assets (including money received by the institution as the proceeds of a cover asset) from the cover assets pool if the assets are not required by this Chapter to be included in the cover assets pool to secure secured claims.

(5) In this section—

“permitted”, in relation to public credit assets or substitution assets, means public credit assets or substitution assets that are permitted to be included in a cover assets pool in accordance with this Chapter;

“secured claim” means a claim that is secured under Part 7 in respect of a preferred creditor.

52 Inclusion of asset in, and removal of asset from, cover assets pool.

52.—For the purposes of sections 50 and 51, an asset is, except as provided by section 51(3), included in, or removed from, a cover assets pool when the appropriate particulars are recorded in the register of public credit covered securities business.

53 Designated public credit institution to keep register of public credit covered securities business.

53.—(1) A designated public credit institution shall establish and keep a register in respect of—

(a) the public credit covered securities that it has issued,

(b) the cover assets hedge contracts that it has entered into, and

(2) The register is to be called the register of public credit covered securities business.

(3) The register may be kept in book form, in electronic form or in any other form so long as the register is capable of being reproduced visually.

(4) The institution shall include in the register the following particulars—

(a) particulars of the public credit covered securities that it has issued;

(b) the cover assets hedge contracts that it has entered into;

(c) particulars of the public credit assets and substitution assets that it holds as security for those securities and contracts;

(d) such other particulars as are prescribed by the regulations for the purposes of this section.

(5) Except where the regulations otherwise provide, the institution may make or amend an entry in the register only with the consent of the relevant cover-assets monitor or the Authority.

(6) The institution shall keep the register in such place as may be prescribed by the regulations for the purpose of this subsection.

(7) If a designated public credit institution is also a designated mortgage credit institution, the institution is required to keep its register of public credit covered securities business separate from its register of mortgage covered securities business.

54 Authority and cover-assets monitor to have access to register of public credit covered securities business.

54.—(1) The Authority, and each cover-assets monitor appointed in respect of a designated public credit institution, are at all times entitled—

(a) to have access to the institution's register of public credit covered securities business, and

(b) to take copies of the register or any entry in it at the expense of the institution.

(2) If the Authority, or the cover-assets monitor appointed in respect of a designated public credit institution, by notice in writing so requires, the institution shall provide the Authority or monitor with a copy of—

(a) any specified register kept by the institution in accordance with this Chapter, or

(b) any specified entry in such a register.

(3) A reference in this section to the Authority includes a reference to any person authorised by the Authority for the purposes of this section.

55 Financial statements in respect of designated public credit institution.

55.—A designated public credit institution shall include the following information in its annual financial statement or in a document accompanying the statement:

(a) the names of the countries in which the public credit assets included in the cover assets pool maintained by the institution are located, and the number and percentage of those assets located in each of those countries, as at the date to which the statement is made up;

(b) such other information as may be prescribed by the regulations for the purposes of this subsection.

56 Valuation of assets held by designated public credit institutions.

56.—(1) The prudent market value of a public credit asset included in a cover assets pool maintained by a designated public credit institution for the purposes of this Chapter is to be an amount denominated in the currency in which the related public credit is denominated, equal to 100 per cent of the principal or nominal amount of that public credit that is outstanding on the date that the asset is included in the pool or, if some other percentage is prescribed by the regulations, equal to that other percentage of that principal or nominal amount.

(2) The Authority may, by regulatory notice published in Iris Oifigiúil, specify further requirements in relation to the valuation basis and methodology, time of valuation and any other matter that it considers relevant for determining the prudent market value of public credit assets for the purposes of this Chapter.

(3) The Authority may, by regulatory notice published in Iris Oifigiúil, specify requirements in relation to the valuation basis and methodology, time of valuation and any other matter that it considers relevant for determining the prudent market value of substitution assets held by a designated public credit institution for the purposes of this Chapter.

(4) The prudent market value of substitution assets that are in the form of securities is to be determined in accordance with a regulatory notice published in accordance with subsection (3).

(5) The Authority may, by regulatory notice published in Iris Oifigiúil, specify requirements in relation to the valuation basis and methodology, time of valuation and any other matter that it considers relevant for determining the value of tier 2 assets, credit transaction assets or the total assets held by a designated public credit institution for the purposes of this Act.

(6) The value of assets referred to in subsection (5) is to be determined in accordance with a regulatory notice published in accordance with that subsection.

Chapter 3 Provisions applicable to asset covered securities generally

57 Protection of disclosures made to an authorised recipient.

57.—(1) A person who discloses to an authorised recipient information relating to the business of a designated credit institution is not liable in tort, or for breach of contract, to the institution or any other person in respect of the disclosure if the information was provided in good faith to enable the recipient to perform functions imposed on the recipient by or under this Act.

(2) The following persons are authorised recipients for the purpose of subsection (1):

(a) the Authority and its members,

(b) any delegate of the Authority and, if the delegate is a body corporate, any member of the delegate,

(d) any cover-assets monitor appointed in respect of the relevant designated credit institution under Part 5,

(e) any manager appointed in respect of that institution under Part 6,

(f) the officers, employees and agents of, and any persons authorised by, a person referred to in paragraphs (a) to (e).

58 Transfer of business or assets from one credit institution to another.

58.—(1) A designated credit institution may transfer to another credit institution (including one that is not a designated credit institution) the whole or part of its business, or all of its assets or such of those assets as it specifies, but only with the approval of the relevant person and in accordance with this section.

(2) A credit institution that is not a designated credit institution may transfer to a designated credit institution the whole or any specified part of its business, or all of its assets or such of those assets as it specifies, but only with the approval of the relevant person and in accordance with this section.

(3) If the Minister's approval is required for a transfer under this section, the Minister is required to consult the Authority before approving the transfer.

(4) The transferor credit institution and transferee credit institution are required to jointly submit to the relevant person for approval a scheme for the proposed transfer of the business or assets concerned. The scheme must contain such details as that person may require with respect to that business or those assets and must specify the date or dates on which the transfer is to take place or how that date or those dates are to be ascertained.

(5) As a prerequisite to giving approval under this section, the relevant person may impose on the parties to the proposed transfer such conditions relating to the scheme as that person thinks necessary for the purpose of—

(a) safeguarding the interests of the parties to the transfer and of persons who have financial obligations in respect of the business or assets concerned,

(b) ensuring an orderly transfer of that business or those assets, and

(6) On being satisfied that a scheme submitted under subsection (4) will achieve the purpose referred to in subsection (5) and that the conditions (if any) imposed by that person in respect of the scheme have been or will be complied with, the relevant person—

(a) shall, by order, approve a transfer of the business or assets concerned, and

(b) shall publish a notice giving particulars of the transfer in one or more daily newspapers circulating in the State.

(7) The relevant person may, by further order, vary an approval under subsection (6). If such an approval is varied, the relevant person shall publish a notice giving particulars of the variation in one or more daily newspapers circulating in the State.

(8) A transfer of a business or assets under this section takes effect—

(a) subject to any conditions imposed on the approval of the transfer, and

(b) on the date or dates specified in the scheme.

(9) On the transfer of a business or assets under this section—

(a) the transferee credit institution has the same rights (including priorities) and obligations in respect of that business or those assets as the transferor credit institution had immediately before the transfer took effect, and

(b) the transferor ceases to have those rights and obligations.

(10) A transfer of an asset under this section, whether specifically or as part of a transfer of a business, does not need to be registered under the Registration of Deeds Act, 1707, the Bills of Sale (Ireland) Acts, 1879 and 1883, the Companies Act, 1963, the Registration of Title Act, 1964, and any other Act that provides for the registration of assets or details of them. For the purposes of any of those Acts that would apply to it but for this subsection, such a transfer has effect as a deed registered on the date on which it took effect.

(11) If legal proceedings are pending immediately before the time when a transfer under this section takes effect, those proceedings are to continue. At that time, the transferee credit institution—

(a) replaces the transferor credit institution as a party to the proceedings, and

(b) assumes the same rights and obligations in relation to those proceedings as the transferor credit institution had immediately before that time.

(12) For the purposes of this section, a transferor credit institution is associated with the transferee credit institution if—

(a) either of the institutions is the beneficial owner of not less than 90 per cent of the issued share capital of the other institution (whether directly or indirectly through any other person or persons), or

(b) a body corporate (other than the transferor or transferee credit institution) is the beneficial owner of not less than 90 per cent of the issued share capital of each of the institutions (whether directly or indirectly through any other person or persons).

(13) In this section—

“assets” means mortgage credit assets, public credit assets or substitution assets, or any securities, contracts of guarantee or indemnity or contracts of insurance relating to any such assets or any other assets connected with all or any part of a business of a credit institution;

“relevant person” means, if the relevant credit institutions are not associated, the Minister or, if the relevant credit institutions are associated, the Authority;

“security” includes mortgage, assignment, charge, lien, pledge and encumbrance.

PART 5 Cover-Assets Monitors

59 Cover-assets monitor to be appointed for each designated credit institution.

59.—(1) Every designated credit institution is required to appoint a qualified person to be a cover-assets monitor in respect of the institution.

(2) A designated credit institution that is both a designated mortgage credit institution and a designated public credit institution may appoint a separate cover-assets monitor in respect of each cover assets pool maintained by it or may appoint a single cover-assets monitor in respect of both of the pools so maintained.

(3) An appointment under this section does not take effect until the Authority has approved it in writing.

(4) If the Authority refuses to approve such an appointment, the designated credit institution concerned shall, within such period as may be specified by the Authority (being not less than 7 days), appoint another qualified person to be a cover-assets monitor in respect of that institution.

(5) A designated credit institution that has appointed a cover-assets monitor under this section is responsible for paying any remuneration or other money payable to the monitor in connection with the performance of the monitor's responsibilities in respect of the institution, including any additional responsibilities conferred on the monitor under section 68.

(6) The Authority may, by regulatory notice notified in Iris Oifigiúil, specify—

(a) the qualifications required in order for a person to be appointed as a cover-assets monitor, and

(b) the application procedure for appointment as such a monitor.

60 Authority may appoint cover-assets monitor in certain circumstances.

60.—(1) If at any time a designated credit institution has no cover-assets monitor appointed in respect of a cover assets pool and the Authority reasonably believes that the institution is unlikely to appoint such a monitor, the Authority may appoint a suitably qualified person to be a cover-assets monitor in respect of the institution. The appointment may be on such terms and subject to such conditions as the Authority thinks fit.

(2) If the Authority has appointed a cover-assets monitor in accordance with this section, the designated credit institution concerned is responsible for paying any remuneration or other money payable to the monitor in connection with the performance of the monitor's responsibilities in respect of the institution, including any additional responsibilities conferred on the monitor under section 68.

61 Responsibilities of cover-assets monitor appointed in respect of designated mortgage credit institution.

61.—(1) The cover-assets monitor appointed in respect of a designated mortgage credit institution is responsible for monitoring the institution's compliance with sections 32(8), 33 (subsection (6) excepted), 35(2) and (8), 36(1) and (4) and 38(4) and (5) and such other matters (if any) relating to the business of such an institution as may be prescribed by the regulations for the purposes of this subsection.

(2) Before a designated mortgage credit institution issues mortgage covered securities, or enters into a cover assets hedge contract, the relevant cover-assets monitor shall take reasonable steps to verify—

(a) that the institution will be in compliance with section 32(8), and will not be in contravention of section 33 (subsection (6) excepted) and section 35(8), as a result of the institution having issued those securities or entered into such a contract,

(b) that the institution will comply with the requirements of sections 38(4) and (5) with respect to keeping its register of mortgage covered securities business, or

(c) such other matters (if any) relating to the business of designated mortgage credit institutions as may be prescribed by the regulations for the purposes of this subsection.

(3) The cover-assets monitor is also responsible for performing such other responsibilities (if any) as are prescribed by the regulations.

(4) The appointment of a person as a cover-assets monitor in respect of a designated mortgage credit institution does not absolve the institution from its duty to comply with this Act.

62 Responsibilities of cover-assets monitor appointed in respect of designated public credit institution.

62.—(1) The cover-assets monitor appointed in respect of a designated public credit institution is responsible for monitoring the institution's compliance with sections 47(8), 50(2) and (8), 51(1) and (4) and 53(4) and (5) and such other matters (if any) relating to the business of such an institution as may be prescribed by the regulations for the purposes of this subsection.

(2) Before a designated public credit institution issues public credit covered securities, or enters into a cover assets hedge contract, the relevant cover-assets monitor shall take reasonable steps to verify—

(a) that the institution will be in compliance with section 47(8), and will not be in contravention of section 48 or 50(8) as a result of the institution having issued those securities or entered into such a contract,

(b) that the institution will comply with requirements of sections 53(4) and (5) with respect to keeping its register of public credit covered securities business, and

(c) such other matters (if any) relating to the business of designated public credit institutions as may be prescribed by the regulations for the purposes of this subsection.

(3) The cover-assets monitor is also responsible for performing such other responsibilities (if any) as are prescribed by the regulations.

(4) The appointment of a person as a cover-assets monitor in respect of a designated public credit institution does not absolve the institution from its obligation to comply with this Act.

63 Termination of appointment of cover-assets monitor by designated credit institution.

63.—(1) A designated credit institution may terminate the appointment of its cover-assets monitor only with the written consent of the Authority.

(2) The Authority may, by notice in writing given to the institution and cover-assets monitor concerned, direct a designated credit institution to terminate the appointment of the cover-assets monitor appointed in respect of the institution and to appoint another qualified person in place of that monitor. The notice must specify the reasons for giving the direction. Subject to subsection (4), the institution is required to comply with such a direction.

(3) If the Authority issues a notice under subsection (2), the designated credit institution or cover-assets monitor concerned may, within 7 days of receiving the notice, appeal to the High Court against the giving of the direction.

(4) On the hearing of an appeal under subsection (3), the High Court may—

(a) make an order confirming the decision of the Authority, or

(b) make an order quashing the direction of the Authority or, if the direction has been implemented, order that the cover-assets monitor concerned be reinstated on the same terms and conditions as those applicable immediately before the implementation of the direction.

The High Court may make such ancillary orders as it thinks appropriate.

64 Resignation of cover-assets monitor.

64.—(1) A cover-assets monitor may resign by notice in writing given to the Authority.

(2) The cover-assets monitor is required to include in the notice a statement of the reasons for the resignation.

(3) A notice of resignation of a cover-assets monitor takes effect at the end of 30 days, or of such longer period as is specified in the notice, after it is given to the Authority or, if the Authority agrees to the resignation taking effect at the end of a shorter period, at the end of that shorter period.

65 Cover-assets monitor's powers in relation to designated credit institution.

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