Decree No. 2/2019 Coll. on Records of Covered Blocks

DECREE 2/2019 Coll. of 21 December 2018, on records of covered blocks Pursuant to Article 32(6) of Act No. 190/2004 Coll., on Bonds, as amended by Act No. 307/2018 Coll., the Czech National Bank stipulates the following: Article 1 Subject of regulation This Decree stipulates the requisites and manner of keeping of records of covered blocks. Article 2 Requisites of records of covered blocks Records of covered blocks (hereinafter referred to as the “records”) shall have the following requisites: a) lists of covered blocks, b) overall information about each covered block, more specifically:

1. a clear identification of the covered block which is identical to the code represented by the identifier of the cover pool of the covered block pursuant to point 5.2.1 of Annex XVII to Commission Implementing Regulation (EU) No 680/2014 of 16 April 2014 laying down implementing technical standards with regard to supervisory reporting of institutions according to Regulation (EU) No 575/2013 of the European Parliament and of the Council, as amended (hereinafter referred to as the “code”),
2. the type of covered bonds in the covered block pursuant to Article 28b of the Act on Bonds,
3. information whether the covered block includes covered bonds containing “CRR” in their name,
4. limits beyond the scope of the Act on Bonds set by the issuance conditions for the purposes of Articles 28a to 28c of the Act on Bonds,
5. the currency in which the records are kept (Article 7(4)),

2 6. the aggregate value of debts arising from covered bonds pursuant to Article 31a(2) of the Act on Bonds in the currency in which the records are kept, 7. the aggregate value of related debts pursuant to Article 31a(3) of the Act on Bonds in the currency in which the records are kept, 8. the aggregate value of cover assets for the purposes of compliance with the duties stipulated in Article 28a(1) of the Act on Bonds in the currency in which the records are kept, 9. the aggregate value of cover assets for the purposes of compliance with the duty stipulated in Article 28a(2) of the Act on Bonds in the currency in which the records are kept, c) lists pursuant to Article 32(3) of the Act on Bonds in relation to each covered block, more specifically

1. the register of cover assets,
2. a record of items related to cover assets,
3. a record of debts arising from covered bonds,
4. a record of related debts pursuant to Article 31a(3) of the Act on Bonds. Article 3 Register of cover assets (1) The register of cover assets shall be kept under the code of the relevant covered block. (2) Information about loan claims in the register of cover assets shall contain at least a) a clear identification of the loans by stating the contract or account number which unambiguously identifies the contractual relation between the bank and the obligor, and other data where appropriate, b) the type of cover asset broken down pursuant to Article 129(1) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, as amended (hereinafter referred to as the “Regulation”) for cover assets defined in Article 31(1) of the Act on Bonds, or broken down pursuant to Article 31(2) of the Act on Bonds, c) information whether the obligor is in default pursuant to Article 178 of the Regulation, d) the currency or currencies in which the loan claim was concluded,

3 e) the collateral value of the pledged immovable asset in the currency in which the records are kept, f) the nominal value of loan claims in the currency in which the records are kept, g) the nominal value of loan claims for the purposes of compliance with the duties stipulated in Article 28a of the Act on Bonds in the currency in which the records are kept. (3) Information about items in the register of cover assets other than those defined in paragraph 2 shall contain at least a) a clear identification of the items, b) the type of cover asset broken down pursuant to Article 129(1) of the Regulation as regards cover assets defined in Article 31(1) of the Act on Bonds, or broken down pursuant to Article 31(2) of the Act on Bonds, c) information whether the obligor is in default pursuant to Article 178 of the Regulation, d) the type, date of conclusion, date of effect and, where relevant, maturity date of derivatives and the name of the other contracting party thereto, e) the currency or currencies in which the items were concluded, f) the nominal value of the items and, in the case of derivatives, the non-negative real value in the currency in which the records are kept, g) the value of the items for the purposes of compliance with the duties stipulated in Article 28a of the Act on Bonds in the currency in which the records are kept. Article 4 Records of items related to cover assets (1) Records of items related to cover assets shall be kept under the code of the relevant covered block. (2) Information about items related to cover assets in the records shall contain at least a) a clear identification of the items related to cover assets, b) a clear identification of contracts in relation to cover assets, c) a clear identification of derivative collateral, d) information whether the collateral can be taken into account for the purposes of compliance with the duties stipulated in Article 28a(1) of the Act on Bonds, e) the currency or currencies in which the items were concluded,

4 f) the real value of the collateral pursuant to subparagraph c) in the currency in which the record is kept. Article 5 Records of debts arising from covered bonds (1) Records of debts arising from covered bonds shall be kept under the code of the relevant covered block. (2) Information about individual issues in the records of debts arising from covered bonds shall contain at least a) a clear identification of the issue, b) the date of the issue, c) the issue maturity, d) the currency or currencies in which the debt was concluded, e) the nominal values of issues in circulation in the currency in which the records are kept, f) the value of the present yield on issues in circulation in the currency in which the records are kept, g) the nominal value of unissued issues if these are used to define the debts for whose coverage these cover pools are used in the currency in which the records are kept. (3) Information about individual issues set out in paragraph 2 shall not contain data stipulated in paragraph 2(b) and (c) if the debts are defined pursuant to Article 31a(2) of the Act on Bonds as issues of covered bonds which have not yet been issued. Article 6 Records of related debts (1) Records of related debts pursuant to Article 31a(3) of the Act on Bonds shall be kept under the code of the relevant covered block. (2) Information about the debt in the records of related debts pursuant to Article 31a(3) of the Act on Bonds shall contain at least a) a clear identification of the debt, b) the type of debt pursuant to Article 31a(4) of the Act on Bonds, c) the currency or currencies in which the debt was concluded,

5 d) the nominal value of the debt in the currency in which the records are kept, unless the debt is derivative debt; in the case of a derivative, the debt is registered as a negative real value of the derivative. Article 7 Record keeping (1) The issuer or the forced administrator of covered blocks (hereinafter referred to as the “obliged entity”) shall ensure that the competences and powers of the unit keeping the records are separated from those of the units authorised to provide loans and issue covered bonds up to the level of members of the management body,1) and that employees of the record-keeping unit have access to up-to-date, reliable and complete information for their decision-making on making entries in the records, removing them therefrom and other activities related to the duties stipulated in this Decree. (2) The obliged entity shall keep the records on the basis of the relevant documents and rules justifying the entry of each item or debt in the covered block. These shall include in particular the credit contract, including all amendments thereto, documents relating to the pledged immovable asset, including the pledge contract, an extract of cadastre of real estates, documents proving the setting of the collateral value of the pledged immovable asset and the rules for setting the collateral value of the pledged immovable asset. (3) The obliged entity shall keep the records in electronic form in a manner enabling all acts carried out by the obliged person to be traced back and reconstructed and shall update them on an ongoing basis. (4) The records shall be kept in the currency set for each covered block by the obliged entity. The exchange rate declared by the Czech National Bank for the date of conversion shall be used to convert data into the relevant currency. For data in the currencies for which the Czech National Bank does not declare foreign exchange market rates, conversion pursuant to the law governing accounting shall be used. Article 8 Transitional provision The content, requisites and manner of keeping of records of the coverage of mortgage bonds issued before the date on which this Decree takes effect, and the content and manner of compliance with the information duty regarding such mortgage bonds, shall be governed by Decree No. 164/2014 Coll., in the version effective before the date of effect of this Decree, until the date when the obliged entity changes the issuance conditions so that these mortgage bonds are deemed to be covered bonds pursuant to the Act on Bonds. Article 9 Repealing provisions

Article 7(3)(j) of Decree No. 163/2014 Coll., on the performance of the activities of banks, credit unions and investment firms, as amended by Decree No. 392/2017 Coll.

6 Decree No. 164/2014 Coll., on keeping records of the coverage of mortgage bonds and information duties of a mortgage bond issuer, is hereby repealed. Article 10 Effect This Decree shall take effect on 1 February 2019. Governor Ing. Rusnok m.p.