Changes to the Swedish covered bond legislation

The Swedish government has proposed to amend the Swedish covered bond legislation in order to include an over-collateralisation (OC) requirement of at least two percent. The main reason for proposing this change is, according to the Swedish government, to enable Swedish covered bond issuers to exempt its covered bond related derivatives from the clearing obligation under Regulation (EU) 648/2012 of the European Parliament and Council on OTC derivatives, central counterparties and trader repositories (EMIR), as complemented by the Commission delegated regulation.

The changes to the legislation accordingly enable the Swedish issuers to fulfill the OC requirement consistent with the delegated regulation.

The Swedish government discloses in the legislative proposal that it is not expected to entail any increase in costs for the Swedish issuers as they already have a significant level of OC, far above what the amendment will require.

- This is a positive step for the Swedish covered bond issuers who can continue to use derivatives for hedging purposes as before, says Martin Rydin Chairman of ASCB (Association of Swedish Covered Bond Issuers).

For further information, please contact:

Martin Rydin +46 73 964 28 23 martin.rydin@lansforsakringar.se

Jonny Sylvén +46 70 555 39 12 jonny.sylven@swedishbankers.se