Finland
Finland Issuers - Legislation
| 1 | Who is the issuer? |
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| 2 | Does the bondholder have recourse to the credit institution? |
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| 3 | Who owns the cover assets? |
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| 4 | Is the issuer the originator of the assets? |
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| 1 | Are the bonds governed by a special covered bond Legislation? |
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| 2 | What is the legal framework for bankruptcy of the issuer of covered bonds? |
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| Comments: included in the Mortgage Credit Bank legislation |
| 1 | What types of assets may be included in cover pools? |
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| 2 | What is the geographical scope for public sector assets? |
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| 3 | What is the geographical scope for mortgage assets? |
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| 4 | Are regular covered bond specific disclosure requirements to the public mandatory? |
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| 1 | LTV is calculated using which valuation?[4] |
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| Comments: market value at the moment of granting mortgage loan |
| 2 | Are there any special LTV limits used solely for calculating collateralisation rates for the cover pool (if yes, specify)? |
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| 3 | Do bondholders get the benefit of that portion of the loan which exceeds the LTV cap? |
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| Comments: Bondholders benefit only of registered share (max 70%) of the loan. |
| 4a | Is there an LTV cap which makes the entire loan ineligible to be put in the cover pool (if yes, specify)? |
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| Comments: LTV of the original loan can be up to 100% (90% recommendation by the FSA) but only 70% LTV of that loan is Cover Pool eligible. |
| 4b | Is there an LTV cap which would require a loan to be removed from the cover pool? |
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| Comments: 70% Residential/ 60% Commercial provided that there's no additional collateral available. |
| 5 | Is there any additional LTV limit on a portfolio basis? |
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| Comments: No Portfolio specific LTV limits. |
| Exposure to market risk |
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| 1 | Is exposure to market risk (e.g. interest rate, currency risks) required to be mitigated by law or contract? |
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| 2 | What is the primary method for the mitigation of market risk? |
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| 3 | If the answer to the above question on market risk mitigation is “Use of derivative hedge instruments”, please specify whether those instruments are entered into: |
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| 4 | What type of coverage test is applied? |
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| 5 | What is the frequency of coverage calculations? |
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| 6 | What types of stress scenarios are applied? |
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| 7 | What is the frequency of stress test calculations? |
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| Comments: not defined in the law |
| Exposure to liquidity risk |
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| 8 | Is exposure to liquidity risk required to be mitigated by law or contract? |
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| 9 | What is the primary method for the mitigation of liquidity risk on interest payments? |
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| 10 | What is the primary method for the mitigation of liquidity risk on principal payments? |
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| 11 | Is there any grace period in case of a breach of liquidity risk mitigants? |
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| Comments: If not otherwise advised by FSA |
| 12 | What is the consequence of not fixing a breach of liquidity risk mitigants? |
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| Comments: Cancelling the licence (FSA) |
| Monitoring of exposures to market and liquidity risk |
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| 13 | Who monitors the maintenance of coverage tests? |
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| 14 | Are there any regular public reporting requirements for market and liquidity risk? |
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| Comments: Reports only to FSA |
| Overcollateralisation |
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| 15 | Is mandatory minimum overcollateralisation required? |
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| 16 | What is the level of minimum mandatory overcollateralisation? |
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| Comments: 2% of the Net Present Value by the law and issuer/programme specific levels. |
| 17 | If mandatory overcollateralisation is required, are the amounts above the minimum OC level protected? |
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| 18 | Is there any grace period in case of a breach of the coverage test? |
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| Comments: If not otherwise advised by FSA. |
| 19 | What is the consequence of not fixing a breach of the coverage test? |
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| Comments: Cancelling the licence (FSA) |
| 1 | Is a special license required for the issuing of covered bonds? |
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| 2 | Are there special reporting duties of the covered bond issuer to the supervision authority concerning covered bonds and the cover pool, which go beyond the regular banking supervision? |
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| 3 | What is the role of the banking supervision regarding covered bonds? |
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| 4 | Is there a special role of banking supervision in crisis regarding covered bonds? |
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| 5 | Is there a cover pool monitor independent from the issuer? |
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| Comments: Issuer monitors the Cover Pool and reports it to FSA. FSA audits the cover pool. |
| 6 | If there is an independent cover pool monitor, what are its duties? |
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| Comments: n.a. |
| 1 | Do covered bonds automatically accelerate when the credit institution goes insolvent? |
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| 2 | What is the cover pool? |
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| 3 | How are the covered bondholders protected against claims from other creditors in case of insolvency of the issuer? |
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| 4 | Is there recourse to the credit institution’s insolvency estate upon a cover pool default? |
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| 5 | Are there provisions that require derivatives to continue in case of insolvency of the credit institution? |
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| 6 | If derivatives are permitted in the cover pool, what is their ranking? |
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| 1 | Does the covered bond fulfil the criteria of UCITS 22(4)? |
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| 2 | Does the covered bond legislation completely fall within the criteria of the Annex VI, Part 1, Paragraph 68 (a) to (f) of the Capital Requirements Directive (CRD)? |
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| 3 | Are listed covered bonds eligible in repo transactions with the national central bank? |
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| Comments: Also with the ECB. |
| 4 | Are there any special investment regulations regarding covered bonds? |
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| 1 | Link to National Association representing covered bond interests |
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| 2 | Link to national regulators and supervisors |
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| 3 | Fact Book Country Chapter |
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| 4 | Hypostat Country Chapter |
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