PART 3

Designation of Credit Institutions

12. —(1) A person shall not—

(a) purport to issue mortgage covered securities in accordance with this Act,

(b) represent or advertise that the person is a designated mortgage credit institution, or is authorised by this Act to carry on a business involving the issue of mortgage covered securities, or

(c) claim to have the benefits conferred on designated mortgage credit institutions by or under this Act,

unless the person is registered as a designated mortgage credit institution in accordance with this Part.

(2) A person shall not—

(a) purport to issue public credit covered securities in accordance with this Act,

(b) represent or advertise that the person is a designated public credit institution, or is authorised by this Act to carry on a business involving the issue of public credit covered securities, or

(c) claim to have the benefits conferred on designated public credit institutions by or under this Act,

unless the person is registered as a designated public credit institution in accordance with this Part.

(3) A person who contravenes subsection (1) or (2) commits an offence and is liable—

(a) on conviction on indictment, to a fine not exceeding €250,000 (£196,891), or

(b) on summary conviction, to a fine not exceeding €1,900 (£1,496.37).

13. —(1) An eligible person may apply to the Authority to be registered as a designated mortgage credit institution or as a designated public credit institution.

(2) A person is an eligible person for the purposes of this section only if it is a credit institution incorporated or formed in the State that holds an authorisation issued by the Central Bank authorising it to carry on business as a credit institution.

(3) An application must—

(a) be in a form approved by the Authority, and

(b) contain such information, and be accompanied by such documents, as may be requested by the Authority.

(4) The Authority may, by written notice given to an applicant, require the applicant to provide such additional information and documents as is reasonably necessary to enable it to determine the application. If such a requirement is not complied with within a period specified in the notice, not exceeding 60 days, the Authority may reject the application.

(5) Nothing in this section prevents the same person from making an application for registration as a designated mortgage credit institution and an application for registration as a designated public credit institution.

14. —(1) The Authority may register an applicant as a designated mortgage credit institution only if it is satisfied that the applicant—

(a) is or will be able to carry out, in a proper manner, the responsibilities that a designated mortgage credit institution is required by this Act to carry out, and

(b) complies with, or will be able to comply with, such requirements (if any) relating to designated mortgage credit institutions as are prescribed by the regulations and by regulatory notices.

(2) The Authority may register an applicant as a designated public credit institution only if it is satisfied that the applicant—

(a) is or will be able to carry out, in a proper manner, the responsibilities that a designated public credit institution is required by this Act to carry out, and

(b) complies with, or will be able to comply with, such requirements (if any) relating to designated public credit institutions as are prescribed by the regulations and by regulatory notices.

(3) In granting an application, the Authority may impose such conditions (other than conditions prescribed by the regulations or by a regulatory notice) on the applicant with respect to the orderly and proper regulation of the applicant's business as it considers appropriate.

(4) On granting an application for registration as a designated mortgage credit institution, the Authority shall—

(a) record the appropriate particulars of the applicant in the register of designated mortgage credit institutions, and

(b) issue the applicant with a certificate of registration as a designated mortgage credit institution,

and, if the Authority has imposed conditions on the applicant under subsection (3), shall specify those conditions in the certificate or in one or more documents that accompany the certificate.

(5) On granting an application for registration as a designated public credit institution, the Authority shall—

(a) record the appropriate particulars of the applicant in the register of designated public credit institutions, and

(b) issue the applicant with a certificate of registration as a designated public credit institution,

and, if the Authority has imposed conditions on the applicant under subsection (3), shall specify those conditions in the certificate or in one or more documents that accompany the certificate.

(6) On granting an application for registration as a designated mortgage credit institution or designated public credit institution, the Authority is also required to give to the Revenue Commissioners written notice of—

(a) the name of the institution concerned, and

(b) the address of the principal place of business of that institution and, if the address of its registered office is different from that address, the address of that office.

(7) The Authority may not reject an application without giving the applicant an opportunity to make representations in writing as to why the application should not be rejected.

(8) If the Authority rejects an application, it shall immediately give to the applicant written notice of the rejection, which must include a statement setting out the reasons for the rejection.

15. —(1) Registration as a designated mortgage credit institution authorises the institution named in the certificate of registration to carry on the business of a designated mortgage credit institution in accordance with this Act.

(2) Registration as a designated public credit institution authorises the institution named in the certificate of registration to carry on the business of a designated public credit institution in accordance with this Act.

(3) A designated credit institution shall comply with the conditions contained in its certificate of registration or in any document that was issued with the certificate.

(4) The fact that the Authority has registered a person as a designated credit institution does not of itself make the Authority liable for any financial loss incurred by a person—

(a) because the institution, any of its officers, employees or agents, or any cover-assets monitor or manager appointed in respect of the institution has contravened or failed to comply with a provision of this Act or any relevant regulatory notice issued under this Act, or any condition of the institution's registration, or

(b) because the institution has become subject to an insolvency process.

(5) The registration of a designated mortgage credit institution or a designated public credit institution remains in force until the registration is revoked under this Part.

16. —(1) The Authority may from time to time vary a condition of a designated credit institution's registration or impose on the institution a new condition, but only after giving to the credit institution concerned notice in writing of its intention to do so and after giving the institution an opportunity to make written representations to the Authority in relation to the proposed variation or proposed new condition.

(2) This section does not empower the Authority to vary a condition that is imposed on a designated mortgage credit institution or a designated public credit institution by the regulations or by a regulatory notice.

17. —(1) The Authority is required to establish and keep a register of designated mortgage credit institutions.

(2) The Authority is also required to establish and keep a register of designated public credit institutions.

(3) The register of designated mortgage credit institutions must contain the name and the address of the principal place of business of each designated mortgage credit institution and such other information as the Authority determines.

(4) The register of designated public credit institutions must contain the name and the address of the principal place of business of each designated public credit institution and such other information as the Authority determines.

(5) A register may be in book form, electronic form or such other form as the Authority determines from time to time. If a register is kept in an electronic form that is not visually readable, the register must be capable of being reproduced in a visually readable form.

(6) The registers are to be kept at the head office of the Authority.

(7) Members of the public are entitled, without charge, to inspect either of the registers during the ordinary business hours of the Authority. However, the Authority may impose a reasonable charge for providing a copy of a register or of an entry in a register.

(8) The Authority shall, not less frequently than once during every period of 12 months after the commencement of this section, publish in a publication decided by the Authority a list of designated mortgage credit institutions and designated public credit institutions. If the regulations so require, the list must contain such other particulars as are prescribed by the regulations.

18. —The Authority may revoke the registration of a designated mortgage credit institution, or a designated public credit institution, on the application of the institution, but only if it is of the opinion that the institution has fully satisfied all claims and liabilities that are secured in respect of the institution as provided by Part 7.

19. —(1) The Authority may revoke the registration of a designated credit institution on being satisfied on reasonable grounds that—

(a) the institution has not begun to carry on any business of a designated credit institution within 12 months after the date on which the registration was notified to the institution,

(b) the institution has not carried on any such business within the immediately preceding 6 months,

(c) the registration was obtained by means of a false or misleading representation,

(d) the institution has contravened or is contravening, or has failed or is failing to comply with a provision of this Act or a regulatory notice,

(e) the institution has become subject to an insolvency process,

(f) the institution no longer has sufficient “own funds” (as referred to in the Codified Banking Directive),

(g) the cover assets comprised in a cover assets pool maintained by the institution do not comply with any provision of Part 4,

(h) the business of, or the corporate structure of, the institution has been so organised to such an extent that the institution can no longer be supervised to the satisfaction of the Authority,

(i) the institution has come under the control of any other entity that is not supervised by the Authority to such an extent that the institution can no longer be supervised to the satisfaction of the Authority,

(j) since the institution was registered as a designated credit institution, the circumstances under which the registration was given have changed to the extent that an application for registration would be refused had it been made in the changed circumstances, or

(k) the institution, or any of its officers, is convicted on indictment of—

(i) an offence under this Act or under any other enactment prescribed by the regulations for the purpose of this section, or

(ii) an offence involving fraud, dishonesty or breach of trust.

(2) The Authority may revoke the registration of a designated credit institution under this section only with the consent of the Minister.

(3) Before seeking the consent of the Minister to the revocation of the registration of a designated credit institution, the Authority shall, by notice in writing given to the institution, inform the institution of its intention to seek that consent. The notice must specify—

(a) the grounds on which it is proposed to seek the Minister's consent, and

(b) that the institution may, within 21 days after the giving of the notice, make written representations to the Minister showing why the registration should not be revoked.

(4) Not later than 21 days after being given a notice under subsection (3), the institution concerned may make written representations to the Minister showing why the registration should not be revoked.

(5) The Authority may seek the Minister's consent to the revocation of the registration of the institution, and the Minister may give that consent only after having considered any representations made by the institution in accordance with subsection (4).

(6) If the Authority revokes the registration of a designated credit institution under this section, it shall give written notice of the revocation to the institution. The notice must include a statement of the reasons for revoking the registration.

(7) Unless the High Court otherwise orders, revocation of the registration of a designated credit institution under this section takes effect on and from the date of the notice or, if a later date is specified in the notice, on and from that date, irrespective of whether or not the institution appeals against the revocation under section 26 .

20. —(1) If the Authority reasonably believes that there may be grounds for revoking the registration of a designated credit institution under section 19 , it may, subject to Part 7, give to the institution a direction in writing prohibiting it from engaging in any specified activity referred to in section 21 (5) except with the permission of the Authority.

(2) If a direction given under this section is still in effect—

(a) winding up or bankruptcy proceedings may be initiated in respect of the institution concerned,

(b) a receiver over the assets of that institution may be appointed, and

(c) the assets of that institution may be attached, sequestered or otherwise distrained,

only if the prior approval of the High Court has been obtained.

(3) The High Court may order that all or any part of proceedings before it under this section may be held in closed court if the Court is satisfied that it would, because of the nature or circumstances of the case or because it would be in the interests of justice, be desirable to make such an order.

(4) The High Court may make a further order revoking or amending an order made under subsection (3).

21. —(1) This section applies to a credit institution if the registration of the institution is revoked under section 19 and the institution—

(a) is not a company or building society, or

(b) is a company or building society but is not being wound up.

(2) A credit institution to which this section applies is required to continue to carry out the financial obligations of the institution that are secured under Part 7 until all of those obligations have been fully discharged to the satisfaction of the Authority.

(3) Within such period as the Authority specifies (not exceeding 30 days) after the institution has been notified that its registration has been revoked, or within such extended period as the Authority may allow, the institution shall give to—

(a) the Authority, and

(b) as far as reasonably practicable, every creditor of the institution,

a notice specifying the measures that it is taking or proposes to take to discharge in full its financial obligations. Those measures must include such measures as are designed to ensure that those obligations in respect of asset covered securities and cover assets hedge contracts will be fully discharged in accordance with the terms of the security documents governing those securities and contracts.

(4) If—

(a) the institution fails to give to the Authority a notice in accordance with subsection (3) within the required period,

(b) the Authority believes that the institution has failed to take reasonable steps to give the notice to all of its creditors, or

(c) the Authority does not believe that the measures specified in a notice given to it under that subsection are satisfactory,

the Authority may, subject to Part 7, give the institution a direction in writing prohibiting the institution from engaging in a specified activity without having first obtained the Authority's permission.

(5) The following activities are specified for the purposes of this section and section 20 —

(a) dealing with the institution's assets generally or dealing with any specified class of assets or any specified asset,

(b) engaging in transactions generally or engaging in any specified class of transactions or any specified transaction,

(c) making payments generally or making any specified class of payments or any specified payment.

(6) Subject to Part 7, the Authority may, either in a direction given under subsection (4) or in a later direction, require the institution concerned to prepare and submit to it for its approval within 2 months after the direction, a scheme for the orderly discharge of the institution's obligations to its creditors.

22. —(1) A direction given under section 20 or 21—

(a) must include a statement of the Authority's reasons for giving the direction, and

(b) remains in force for such period (not exceeding 6 months) as is specified in the direction.

(2) Unless the High Court otherwise orders, a direction given under section 20 or 21 takes effect from the date of the direction or, if a later date is specified in the direction, from that date, irrespective of whether or not the institution appeals against the direction under section 26 .

(3) The Authority may, by notice in writing given to the institution concerned, amend or revoke a direction given under this section.

(4) Without limiting subsection (3), the Authority may from time to time, by notice in writing given to the institution concerned, extend the period during which a direction remains in force by one further period not exceeding 6 months.

(5) A direction given under section 20 ceases to have effect—

(a) at the end of the period specified in the direction, or if the period is extended under subsection (4), at the end of the extended period,

(b) on the making of a winding up order in respect of the institution,

(c) on the revocation of the registration of the institution under this Part, or

(d) on being revoked by an order of the High Court,

whichever first occurs.

(6) A direction given under section 21 ceases to have effect—

(a) at the end of the period specified in the direction, or if the period is extended under subsection (4), at the end of the extended period, or

(b) on being revoked by an order of the High Court,

whichever first occurs.

(7) A credit institution that fails within the permitted period to comply with a direction given under section 20 or 21 commits an offence and is liable on summary conviction to a fine not exceeding €1,900 (£1,496.37).

23. —(1) This section applies to a credit institution whose registration is revoked under section 19 and the institution is a company or building society that is being wound up.

(2) Except as otherwise provided by this Act, the liquidator of a credit institution to which this section applies has a duty to ensure that the institution performs the obligations imposed on the institution by or under this Act.

(3) The duty imposed by subsection (2) is in addition to the liquidator's duties in respect of the winding up of the institution.

24. —If a liquidator is appointed in respect of a credit institution whose registration is revoked under this Part, the Authority may, by notice in writing given to the liquidator, substitute for the obligation imposed on the liquidator to comply with section 23 such other obligations of a similar nature as the Authority specifies in the notice.

25. —If the registration of an institution is revoked under this Part and the institution is—

(a) the holder of a licence issued under the Central Bank Act, 1971 ,

(b) a trustee savings bank,

(c) a building society, or

(d) ACC Bank plc,

the power of the Authority to exercise in relation to the institution any power conferred on it by the supervisory enactments is affected only in so far as the exercise of that power would be inconsistent with this Act.

26. —(1) If the Authority—

(a) rejects an application made under section 13 , or

(b) grants the application but imposes conditions (not being conditions prescribed by the regulations) with which the applicant is dissatisfied,

the applicant may appeal to the High Court against the decision of the Authority rejecting the application or imposing the conditions.

(2) If a designated credit institution is dissatisfied with a decision of the Authority varying the conditions of registration under section 16 , the institution may appeal to the High Court against the decision.

(3) If the Authority revokes the registration of a designated credit institution under section 19 , the institution may appeal to the High Court against the decision of the Authority revoking the registration.

(4) If the Authority gives a direction under section 20 or 21 in respect of a designated credit institution, the institution may appeal to the High Court against the direction.

(5) An appeal under this section can be made only within 42 days after the decision of the Authority has been notified to the applicant or credit institution concerned.

(6) The High Court may hear an appeal made under this section only if it is satisfied that a copy of the notice of appeal has been served on the Authority.

(7) The Authority is entitled to appear as respondent at the hearing of an appeal made under this section.

(8) An appeal made under this section is to be dealt with by way of rehearing.

(9) On the hearing of an appeal, the High Court may make one of the following orders—

(a) an order confirming the decision appealed against,

(b) an order quashing that decision, or

(c) an order substituting for that decision any decision that the Authority could have made in respect of the appellant.

(10) The High Court may also make such ancillary orders as it thinks appropriate.