Bank of England published two separate Market Notices setting out further details on:
- the expansion of the DWF to accept portfolios of “whole” loans as collateral, as well as
- revised eligibility criteria for RMBS and residential mortgage-backed covered bonds accepted as collateral in the Bank’s operations.
The two Market Notices are available on the Bank’s website:
Key points to note are as follows:
- The new requirements will apply to all existing and any newly issued securities, with no "grandfathering";
- Information required may be disclosed via a "subscription-only, secure online data site" whose users will be required to keep the information confidential and use it only for the purpose of evaluating the potential investment;
- Anonymised loan-level data may be disclosed on a "comply or explain" basis, and should include credit bureau score data;
- There will be an implementation period of 12 months ending on 30 November 2011, except for transaction documentation which must be disclosed from July 2011;
- After that there will be a further 12 months transition period during which securities which do not meet the criteria will continue to be accepted, subject to increasing "haircuts";
- During the course of 2011 the Bank will publish further market notices setting out its eligibility requirements for other asset classes.
