Decree No. 164/2014 Coll. on the Register of Cover for Mortgage Bonds and Information Obligations of the Issuer

164

DECREE of 30 July 2014 on the register of cover for mortgage bonds and information obligations of the issuer of mortgage bonds

The Czech National Bank, pursuant to Section 32(2) and Section 45(2) of Act No. 190/2004 Coll., on Bonds, as amended by Act No. 227/2013 Coll., has determined:

§ 1 Subject Matter This Decree regulates the content, requirements, and method of maintaining the register of cover for mortgage bonds by the issuer of mortgage bonds (hereinafter referred to as the "issuer"), as well as the content and method of fulfilling the issuer's information obligations.

§ 2 Register of Cover for Mortgage Bonds (1) The register of cover for mortgage bonds (hereinafter referred to as the "register") comprises the cover register and the cover book. (2) The cover register contains a list of mortgage loans from which the resulting claims serve to properly cover the liabilities from mortgage bonds in circulation, and a list of items of substitute cover for the liabilities from mortgage bonds in circulation. (3) The cover book contains an overview of the amount of liabilities from mortgage bonds in circulation and the valuation of assets recorded in the cover register.

Requirements of the Cover Register § 3 (1) Information about the claim from a mortgage loan in the cover register includes at least a) unambiguous identification of the mortgage loan, by stating the contract number or account number, which unambiguously identifies the contractual relationship between the bank and the debtor, or other relevant data; b) unambiguous identification of the encumbered real estate using data recorded in the land register maintained for the encumbered real estate by the relevant cadastral office, and, if not derived from data recorded in the land register, a brief description thereof; if the real estate is located in the territory of another Member State, data according to the valid law of the relevant Member State shall be used to identify the encumbered real estate; c) the mortgage value of the encumbered real estate; d) the valuation of the claim from the mortgage loan and the valuation of the portion of this claim that serves as proper cover; e) the valuation of the claim from a loan granted under the law regulating building savings, as well as a loan granted by the State Housing Development Fund under the Act on Support for the Construction of Cooperative Apartments or a loan for cooperative apartment construction, which is secured by a mortgage right to the same real estate in the same or prior order, and the identification of the person in whose favor the mortgage right was registered; identification of the person means the name, registered address, and personal identification number of the person. (2) Information about substitute cover in the cover register includes at least a) unambiguous identification of the assets serving as substitute cover, by stating the account number in the case of deposits or the identification number in the case of securities, or other relevant data; b) the valuation of the assets serving as substitute cover.

§ 4 (1) The issuer may include a claim from a mortgage loan in the cover register if it has verified that it meets the conditions for proper cover of liabilities from mortgage bonds in circulation as established by the Bonds Act. (2) The issuer may include substitute cover in the cover register if it has verified that it meets the conditions for substitute cover of liabilities from mortgage bonds in circulation as established by the Bonds Act.

§ 5 (1) The issuer shall promptly remove a claim from a mortgage loan from the cover register if it ceases to meet the conditions for proper cover under the Bonds Act. (2) The issuer shall promptly remove substitute cover from the cover register if it ceases to meet the conditions for substitute cover under the Bonds Act.

Requirements of the Cover Book § 6 (1) Information about liabilities from mortgage bonds in circulation in the cover book includes, as of the relevant date, at least a) the total nominal value of mortgage bonds in circulation; b) the total amount of proportional yield from mortgage bonds in circulation; c) the total amount of liabilities from mortgage bonds in circulation expressed as the sum of items under letters a) and b). (2) Information about proper cover or substitute cover in the cover book includes, as of the relevant date, at least a) the valuation of each individual claim from a mortgage loan and the valuation of the portion of this claim that serves as proper cover; b) the total amount of proper cover; c) the valuation of each individual item of substitute cover; d) the total amount of substitute cover; e) the total amount of cover.

Maintenance of the Register § 7 (1) The issuer maintains the register in a department that is independent up to the level of the governing body from departments responsible for granting mortgage loans or issuing mortgage bonds, and whose staff have access to current, reliable, and comprehensive information for their decisions regarding the inclusion of items in the register, removal of items from the register, and other activities related to obligations under this Decree. (2) The issuer maintains the register in paper or electronic form in a manner that allows for retrospective tracing and reconstruction of all individual actions of the issuer, and updates it continuously. (3) The issuer retains data recorded in the register and documents concerning mortgage loans or substitute cover for a period of at least 10 years after their repayment; this applies also after the termination of the banking license, as well as for the legal successor of the issuer. (4) The issuer ensures the protection of data in the register and documents concerning mortgage loans or substitute cover against access and interference by unauthorized persons and against damage, and the possibility of recovering the specified data and documents even in the event of damage. (5) The issuer is able to promptly present to the Czech National Bank, upon its request, documents proving the eligibility of each claim from a mortgage loan or portion of a claim from a mortgage loan or substitute cover for inclusion in the register; these include in particular the loan agreement including all possible supplements, documents concerning the encumbered real estate including the mortgage agreement, current extract from the land register, determination of the mortgage value of the encumbered real estate, rules for determining the mortgage value of the encumbered real estate, and documents concerning each item of substitute cover and each issuance of mortgage bonds.

§ 8 (1) The issuer maintains the register in Czech currency. For the conversion of data in foreign currencies into data in Czech currency, the foreign exchange market rate published by the Czech National Bank for the relevant day shall be used, and for data in currencies for which the Czech National Bank does not publish foreign exchange market rates, conversion shall be performed according to the law regulating accounting. (2) For the purposes of the register, the issuer values assets serving as proper cover or substitute cover in the same manner as when maintaining accounting records and preparing the annual financial statement.

§ 9 Information Obligation The issuer submits to the Czech National Bank data on the cover of mortgage bonds, on issued and planned issuances of mortgage bonds, on mortgage loans, and on the mortgage value of encumbered real estate. The method of submitting information is established by the Decree on the submission of reports by banks and branches of foreign banks to the Czech National Bank.

§ 10 Entry into Force This Decree enters into force on 1 January 2015.

Governor: Ing. Singer, Ph.D., in r.

Issue 67 Collection of Laws No. 164 / 2014 Page 1815