The Australian Prudential Regulation Authority (APRA) has released a consultation discussion paper outlining proposals to introduce a new prudential standard for deposit-taking institutions (ADI) that issue covered bonds.

 

The Covered bonds and securitisation matters paper outline the Federal Government’s amendments to the Banking Act 1959 that allow ADIs to issue covered bonds.

 

The discussion paper and draft prudential standard aim to ensure that ADIs adopt prudent practices when issuing covered bonds and managing risks associated with exposure to a covered bond special purpose vehicle. Following consideration of submissions received, APRA will finalise APS 121 and related amendments to other prudential standards with a view to implementation in early 2012.

 

Submissions on the covered bond and securitisation proposals are due by 9 December 2011 and should be sent to This email address is being protected from spambots. You need JavaScript enabled to view it.. 

The discussion paper and draft APS 121 can be found on the APRA website at:www.apra.gov.au/adi/Pages/Covered-bonds-and-securitisation-matters-Nov-2011.aspx