Answer:
The issuing bank must demonstrate that the bonds qualify as covered bonds, i.e. that the bond is backed by assets that, in the event of default of the issuing bank, will be used on a priority basis for principal and interest payments on the covered bond. In addition, the bank must demonstrate compliance with the rules ensuring that payments on registered covered bonds are safeguarded in an adequate, transparent and responsible way. In accordance with Section 20a of the Regulation implementing the Financial Supervision Act (Uitvoeringsregeling Wft), the issuing bank can demonstrate this by providing the documents listed below.
- A legal opinion by a legal adviser enabling us to conclude that Section 40d(1) of the Decree on Prudential Rules for Financial Undertakings (Besluit prudentiële regels Wft – Bpr) is complied with. We may conclude that this requirement has been met if the legal opinion (including a reliance statement) is addressed to DNB, is reasoned and supported by the data and documents on which the legal opinion is based, and includes references to the passages in these documents relevant to the legal opinion.
- The data and documents on which the legal opinion is based.
- A plan describing the operational procedures and internal controls for managing the covered bond category. The plan must also include safeguards for the continuity of this management in the event of the bank entering into a situation where it can no longer manage the collateral assets itself.
- The management agreements of the covered bond company.
- A written statement by a managing director of the bank submitting the application, to the effect that the bonds comply with Sections 40d through 40h of the Bpr. We may conclude that this requirement has been met if the written statement in question is addressed to DNB, is reasoned and supported by the data and documents on which the written statement is based, and includes references to the passages in these documents relevant to the written statement.
- All other data and documents that we consider necessary to assess the application.
We then examine this information to determine whether the issuing bank complies with the minimum requirements in the rules and regulations for covered bonds.
