Collateral Guidelines on Eligible Beneficial Interest of a Trust in Housing Loans
March 15, 2016
Revision:January 31, 2017
In light of facilitating monetary operations, these guidelines prescribe the principles for accepting eligible beneficial interest of a trust in housing loans as collateral, for the time being, as an exception stipulated in 6. of the "Guidelines on Eligible Collateral" (Policy Board Decision on October 13, 2000).
2. Collateral Price
The collateral price for eligible beneficial interest of a trust in housing loans shall be calculated by multiplying the sum of the total amount of outstanding principal and repaid principal of housing loans in the trust property by the margin calculated according to 3. (2) and (3) of the "Guidelines on Eligible Collateral."
3. Eligibility Standards
Notwithstanding 4. (1) and (2) of the "Guidelines on Eligible Collateral," eligibility standards for a beneficial interest of a trust in housing loans as collateral shall be as follows.
- (1) The trust should be established for the purpose of submitting its beneficial interest to the Bank as collateral. The trust property of the trust should consist of housing loans. Repayment of principal and interest of the beneficial interest of a trust should be judged as certain by the Bank in light of creditworthiness of the obligors of the housing loans in the trust property and composition of the entire trust property. Realization of the beneficial interest of a trust should be conducted without difficulty.
- (2) The beneficial interest of a trust in housing loans should satisfy the eligibility standards stipulated in 4. (1) (c) of the "Guidelines on Eligible Collateral."
4. Procedures for Eligibility Assessment
- (1) The Bank shall assess the eligibility of a beneficial interest of a trust in housing loans upon request of a counterpart financial institution. In an eligibility assessment, notwithstanding 4. (3) of the "Guidelines on Eligible Collateral," the Bank shall comprehensively evaluate internal examination procedures, management system, and administrative procedures of the counterpart financial institution regarding housing loans in the trust property, and also evaluate management system for the entire trust property, by utilizing other relevant information including those obtained through the Bank's on-site examinations.
- (2) In an eligibility assessment of a beneficial interest of a trust in housing loans, the Bank shall not apply 5. of the "Guidelines on Eligible Collateral."
When the Bank specifically deems it necessary for its business operations, it may make exceptions to the guidelines set forth in paragraphs 2., 3., and 4.
These guidelines shall become effective on the date determined by the Governor after the date the Bank obtains authorization from the Minister of Finance and the Commissioner of the Financial Services Agency in accordance with Article 43, Paragraph 1 and Article 61-2 of the Bank of Japan Act, Act No.89, 1997, provided that the Bank obtains such authorization.