FSA to change RCB regulatory framework

The Financial Services Authority (FSA) has made some changes to its regulatory framework for UK regulated covered bonds (RCB).

The regulator has made the changes, which come into force on January 1, 2013, after receiving feedback from the industry through a joint consultation with HM Treasury earlier this year.

In its new RCB Sourcebook, the FSA has introduced consistent standards of investor reporting, which require issuers to provide loan level information on assets in the cover pool.

The role of the Asset Pool Monitor has also been clarified by codifying the existing UK practice of independent, external scrutiny of an issuer’s RCB programme. Issuers are now required to submit these reports to the FSA.

Furthermore, the regulatory reporting regime has been refined to allow the watchdog to improve its process for assessing issuers’ applications and the stress testing of RCB programmes.

“The changes to the regime are designed to increase transparency for investors and make features of the UK regime readily comparable to those from other countries,” The FSA says.

To receive more relevant articles like this one, why not sign up to our briefings and breaking alerts by clicking here.