The Covered Securities Law, 130(I) Of 2010

The Covered Securities Law, 130(I) of 2010, which was enacted in December 2010, establishes the legal framework for issuance of covered bonds in Cyprus complying with Directive 2009/65/EC (the UCITS Directive) and Directive 2006/48/EC (the Capital Requirements Directive).

The new law empowers all credit institutions incorporated in Cyprus, including cooperative credit institutions, to issue covered bonds, provided they register with and are authorised by the relevant supervisory body (see below).

It regulates the eligibility of assets for inclusion in the cover pool, the issuance model (the cover pool assets remain separately identifiable in the issuer's balance sheet rather than being transferred to a special purpose vehicle) and the registration in Cyprus of foreign covered bonds in case of a cross-border merger involving the absorption of an issuing credit institution incorporated under EEA law by another credit institution incorporated in Cyprus. The Central