The Australian Government's promise to allow covered bonds
in Australia is one step closer to fulfilment with the introduction
into Parliament of the Banking Amendment (Covered Bonds) Bill 2011.
The Bill has been substantially revised from the exposure draft
which was released in March 2011 by the Australian Treasury.
Whereas the exposure draft adopted many of the features from
European regulated covered bond regimes (ie. UCITS), the Bill has
been significantly pared down resulting in a less prescriptive
regime. This will be seen as a positive development by those
Australian Deposit-taking Institutions (ADIs) who
had expressed concerns with some of the rigid requirements in the
exposure draft. It will be interesting to see how investors and the
rating agencies will respond to this development.
