Law on the Issue of Covered Bonds and Covered Bond Public Supervision and Related Matters of 2021

1506 Official Gazette Part I(I) Law 166(I)/2021 No. 4857, 5.11.2021 LAW PROVIDING FOR THE ISSUE AND PUBLIC SUPERVISION OF COVERED BONDS AND FOR RELATED MATTERS CLASSIFICATION OF ARTICLES Preamble Article PART INTRODUCTORY PROVISIONS

1. Short title.
2. Interpretation.
3. Object and scope. PART II STRUCTURAL CHARACTERISTICS OF COVERED BONDS Chapter 1: Dual recourse and protection against insolvency risk
4. Dual recourse.
5. Protection of covered bonds against insolvency risk.
6. Safeguarding claims and rights during the dissolution process.
7. Rights of covered bond investors and other covered pool creditors in case of disposal of cover assets and the covered pool.
8. Priority of cover assets over underlying collateral. Chapter 2: Covered pool and cover Section A: Eligible assets
9. Eligible cover assets.
10. Collateral located outside the European Union.
11. Intra-group covered bond pooling structures.
12. Joint funding.
13. Composition of the covered pool, inclusion and removal of an asset from the covered pool.
14. Categories of primary assets.
15. Derivative contracts in the covered pool.
16. Segregation of cover assets.
17. Obligation to maintain a covered pool register.
18. Register of derivative contract collateral.
19. Registration of an asset and derivative contract in the covered pool register.
20. Prohibition of creating encumbrances on cover assets and derivative contracts included in the covered pool.

1507 21. Obligations of CIs with covered bond liabilities, in case of breach of the covered pool adequacy criteria. 22. Appointment of a covered pool and covered bond monitor. 23. Power of the Central Bank to appoint a covered pool and covered bond monitor in certain cases. 24. Duties and obligations of the covered pool and covered bond monitor. 25. Obligation of the covered pool and covered bond monitor to provide information and submit reports to the Central Bank. 26. Powers of the covered pool and covered bond monitor. 27. Obligation of CIs with covered bond liabilities to provide documents and information to the covered pool and covered bond monitor. 28. Powers of the Central Bank. 29. Termination of the covered pool and covered bond monitor. 30. Resignation of the covered pool and covered bond monitor. 31. Liability of the covered pool and covered bond monitor. 32. Issuance of a directive regarding the covered pool and covered bond monitor. 33. Independence of the covered pool and covered bond monitor. 34. Information for covered bond investors. Section B: Cover and liquidity requirements. 35. Cover requirements. 36. Liquidity buffer requirement for the covered pool. 37. Conditions for extendable maturity structures. 38. Obligation to maintain a reserve in relation to cover assets subject to set-off. PART III PUBLIC SUPERVISION OF COVERED BONDS 39. Public supervision of covered bonds. 40. Right to inspect the covered pool register. 41. Supervision of covered bond operations. 42. Authorization for covered bond programmes. 43. Central Bank's responsibilities regarding CI approval. 44. Register of approved CIs. 45. Application for registration as an approved CI. 46. Conditions and Central Bank decision for CI registration in the register as an approved CI. 47. Right to issue covered bonds by a CI registered in the register of approved CIs. 48. Amendment of the registration terms of an approved CI. 4