The City watchdog said the changes in the regime reflected feedback from the industry received on the joint consultation (with HM Treasury) published earlier in the year.
Only covered bonds regulated in the UK will be affected, and the changes will come into force on 1 January 2013.
The policy statement from the regulator set out the following changes to the FSA’s RCB Sourcebook:
– Introduction of consistent standards of investor reporting: this will increase transparency for investors and highlight the quality of underlying assets, while the use of common standards will make it easier for investors to compare different programmes. This includes requiring issuers to provide loan level information on assets in the cover pool.
– Clarification of the role of ‘Asset Pool Monitor’: this codifies the existing UK practice of independent, external scrutiny of an issuer’s regulated covered bond programme. Issuers will be required to provide these reports to the FSA.
– Refining of regulatory reporting: this updates and consolidates the regulatory reporting that the FSA requires when issuers apply to register with the FSA and on an on-going basis. This information is used to assess issuers’ applications and as part of the regular stress-testing the FSA conducts on regulated covered bond programmes.
The policy statement also provides an update on other areas of policy which relate to covered bonds and can be found on the FSA website.
