Regulatory Alerts2022-05-17
Consultation Document on Covered Bonds Legislative Framework
The Reserve Bank of New Zealand proposes a legislative framework to provide legal certainty for covered bond holders by requiring cover pool assets to be held by a special purpose vehicle and mandating the registration of bond issues. The proposal seeks to amend statutory management and liquidation laws to exclude these special purpose vehicles from bank insolvency proceedings, thereby protecting investor priority claims. Additionally, the document outlines requirements for independent asset pool monitors to verify the sufficiency and accuracy of cover pools on a bi-annual basis.
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