Royal Decree of 11 October 2012 concerning the portfolio manager in the context of the issuance of Belgian covered bonds by a credit institution governed by Belgian law

Title

2012003308

11 OCTOBER 2012. - Royal Decree concerning the portfolio manager in the context of the issuance of Belgian covered bonds by a credit institution governed by Belgian law (NOTE: Consultation of previous versions from 18-10-2012 and text updates until 15-02-2022)

Source: Finance

Publication: 18 October 2012

Number: 2012003308

page: 63462

Case number: 2012-10-11/03

Entry into force: 18 October 2012

1 archived version

1 implementing decree

Art. 1-8

Text

Article 1.[1] This Decree applies to the credit institutions referred to in Article 1, § 3, first paragraph of the Act of 25 April 2014 on the status and supervision of credit institutions and stock exchange companies which are included in the list referred to in Article 82, first paragraph, of the same Act, and to the securities issued which are included in the list referred to in Article 82, second paragraph, of the same Act.1

(1)<KB 2022-01-27/15, art. 16, 002; Entry into force : 08-07-2022>

Art. 2.For the purposes of this Decree, the following terms are defined :
1° "Bank" : the National Bank of Belgium;
2° [1] "the Act": the Act of 25 April 2014 on the status and supervision of credit institutions and stock exchange companies;]1 3° "the Royal Decree" : the Royal Decree of 11 October 2012 concerning the issuance of Belgian covered bonds by credit institutions governed by Belgian law; 4° [1] ...]1 5° [1] ...]1 ---------- (1)<KB 2022-01-27/15, art. 17, 002; Entry into force : 08-07-2022>

Art. 3.§ 1. [1] For the purposes of Article 8 of Annex III to the Act]1 the portfolio manager may not be the same person as the liquidator of the issuing credit institution with respect to whom a liquidation procedure is opened. § 2. To appoint someone as portfolio manager, the Bank assesses whether the following requirements are met :
1° for the exercise of the tasks referred to in the Act, the manager must possess the required expertise and appropriate experience. He must in particular demonstrate that he has sufficient experience in the management of portfolios with assets comparable to the cover assets comprising the special assets to be managed; 2° the portfolio manager must possess the required professional reliability [1] within the meaning of Article 19, § 1, second paragraph, of the Act]1; 3° the portfolio manager must have an organization suitable for the activities he will have to perform within the framework of his mandate and for the nature of the cover assets. When the portfolio manager is a legal entity, the conditions set out in the first paragraph, 1° and 2° [1] are assessed with regard to the natural person performing the function on behalf of the legal entity in question]1. § 3. The conditions of paragraph 2 are deemed to be met for credit institutions subject to the law of a member state of the European Economic Area that :
1° are permitted to issue covered bonds relating to comparable assets; or 2° manage portfolios with assets eligible as cover assets, in particular mortgage claims, as well as claims on central governments, central banks or public law entities.

(1)<KB 2022-01-27/15, art. 18, 002; Entry into force : 08-07-2022>

Art. 4.§ 1. The acts that the portfolio manager may perform to comply with the obligations set out in the terms and conditions regarding the issuance of the covered bonds include the following :
1° ensuring the payment of interest and the repayment of principal regarding the Belgian covered bonds, based on the amounts collected in connection with the cover assets [1] and, if necessary, by extending the term of the Belgian covered bonds in accordance with Article 13/1 of Annex III of the Act]1; 2° ensuring the collection [1] , on behalf of the special assets,]1 of amounts due as interest or as principal repayment or of amounts due on other grounds, on the cover assets forming part of the special assets, and adjusting the register of cover assets to take account of these payments; 3° ensuring the recovery of overdue amounts regarding the cover assets, including through the realization of guarantees, in particular in the form of a mortgage; 4° without prejudice to [1] Article 11 of Annex III]1 of the Act and the contractual provisions applicable to the covered bonds in question, the sale of cover assets; 5° investing the amounts collected in connection with the cover assets, in assets as referred to in Article 3 of the Royal Decree, pending the payment of interest and the repayment of principal regarding the Belgian covered bonds in question. Provided that the Bank grants its permission for this, the limit referred to in Article 3, § 3 of the aforementioned Decree shall not apply when the special assets are managed by a portfolio manager; 6° renegotiating the contractual provisions of the claims in default in the interest of the holders of the Belgian covered bonds in question, insofar as this is not prohibited by the contractual provisions regarding the Belgian covered bonds in question; 7° [1] entering into derivative contracts in accordance with Article 1/3 of Annex III of the Act;]1 8° [1] ...]1 9° performing the administrative tasks with which the issuing credit institution is charged in application of the contractual terms regarding the issuance of the Belgian covered bonds in question. § 2. Without prejudice to the cases [1] referred to in Article 11 of Annex III]1 of the Act, the portfolio manager must obtain the consent of the Bank and of the representative of the holders of Belgian
covered bonds for any transaction, in particular the sale of cover assets, which entails that the tests referred to in Articles 5 and 7 of the Royal Decree or the contractual provisions are not complied with or which entails the risk that they are not complied with. § 3. The portfolio manager must :
1° verify whether the tests referred to in Articles 5 and 7 of the Royal Decree and the contractual provisions regarding the covered bonds in question are met; 2° [1] inform the Bank and the representatives of the holders of Belgian covered bonds on a quarterly basis about the results of the tests referred to in 1° and of the tests referred to in Article 8 of the Royal Decree, as well as about the measures taken when these tests are not met;]1 3° ensure the forwarding of the reports prescribed by the Royal Decree. The Bank may fix the content of those reports, increase their frequency and request additional information. § 4. For the exercise of the tasks referred to in paragraphs 1 and 2, the portfolio manager may call upon the issuing credit institution [1] , in accordance with Article 12 of Annex III]1 of the Act. He oversees the maintenance of the organization and the computer applications necessary for the management of the covered bonds in question. In this regard, he may ask the liquidator of the institution not to terminate the contracts necessary for the continuation of the activities useful for the management of the cover assets and of the covered bonds in question. This includes both the employment contracts of the staff necessary for this management and the contracts with external service providers. The costs associated with these contracts are deducted from the special assets. He and the persons he designates may also access all documents and computer systems of the issuing credit institution that are useful for the management of the covered bonds in question. § 5. The acts performed by the portfolio manager, in particular the sale of assets, are carried out under the most favorable market conditions. Within the framework of his mandate, the portfolio manager may not act, directly or indirectly, as counterparty for the transactions referred to in paragraph 1, 4°, 5° and 7°. ---------- (1)<KB 2022-01-27/15, art. 19, 002; Entry into force : 08-07-2022>

Art. 5.The portfolio manager may resort to outsourcing for certain tasks related to the management of the cover assets and of the Belgian covered bonds in question.
The fact that outsourcing is resorted to does not in any way detract from the responsibility of the portfolio manager, in particular with regard to the holders of covered bonds. The payment of the costs associated with the outsourcing is made by the portfolio manager, without prejudice to the application [1] of Article 6, fourth paragraph of Annex III]1 of the Act. ---------- (1)<KB 2022-01-27/15, art. 20, 002; Entry into force : 08-07-2022>

Art. 6.The consultation referred to [1] in Article 11, 6°, of Annex III]1 of the Act must in particular take place when the tests referred to in Articles 5 and 7 of the Royal Decree are no longer met. ---------- (1)<KB 2022-01-27/15, art. 21, 002; Entry into force : 08-07-2022>

Art. 7. This Decree enters into force on the day on which it is published in the Belgian State Gazette.

Art. 8. The Minister responsible for Finance is charged with the implementation of this Decree.

Signature

Given at Brussels, 11 October 2012.
ALBERT
By the King :
The Minister of Finance,
S. VANACKERE

Preamble

ALBERT II, King of the Belgians,
To all who shall see these presents, Greeting.
Having regard to the Act of 22 March 1993 on the status and supervision of credit institutions, Article 64/14, inserted by the Act of 3 August 2012; Having regard to the request for urgent handling, motivated by the fact that the Act of 3 August 2012 and the Royal Decree of 11 October 2012 have created a legal framework for the issuance of Belgian covered bonds to avoid that credit institutions governed by Belgian law would suffer a very strong disadvantage compared to their foreign competitors when they wish to finance themselves in the long term so that they are able, also in the long term, to grant credits to enterprises and families; that this long-term financing can only take place at a reasonable cost if this legal framework is completed by this Royal Decree, since rating agencies, when determining the rating they give to covered bonds, take into account inter alia the requirements applicable to the appointment as portfolio manager, as well as the specific tasks and reporting obligations incumbent on him; Having regard to the agreement of the Minister of Budget, given on 28 September 2012; Having regard to Opinion 52.127/2 of the Council of State, given on 8 October 2012, in application of Article 84, § 1, first paragraph, 2°, of the Acts on the Council of State, coordinated on 12 January 1973; On the proposal of the Minister of Finance, Have We decided and decide We :

Amendment(s)

Royal Decree of 27-01-2022 published on 15-02-2022

Amended articles :
1; 2; 3; 4; 5; 6

Links

https://www.ejustice.just.fgov.be/eli/besluit/2012/10/11/2012003308/justel Image of the official publication PDF consolidated version

External link

Council of State