Prospectus UBI Banca Covered Bond Programme

Prospectus
independent accounting firm. The asset monitor must prepare and deliver to the issuing bank's s board of
auditors, on an annual basis, a report detailing its monitoring activity and the relevant findings.
The Bank of Italy Instructions require banks to carry out the monitoring activities described above at least every
6 months with respect to each covered bond transaction. Furthermore, the internal auditors of banks must
comprehensively review every 12-months the monitoring activity carried out with respect to each covered bond
transaction, basing such review, among other things, on the evaluations supplied by the asset monitor.
In order to ensure that the monitoring activities above may be appropriately implemented, the Bank of Italy
Instructions require that the entities participating in covered bond transactions be bound by appropriate
contractual undertakings to communicate to the issuing bank, the cover pool provider and the entity acting as
servicer in relation to the cover pool assets all the necessary information with respect to the cover pool assets and
their performance.
Substitution of assets
The MEF Regulation and the Bank of Italy Instructions provide that, following the initial transfer to the cover
pool, the eligible assets comprised in the cover pool may only be substituted or supplemented in order to ensure
that the requirements described under "Ratio between cover pool value and covered bond outstanding amount",
or the higher over-collateralisation provided for under the relevant covered bond transaction documents, are
satisfied at all times during the transaction.
The eligible assets comprised in the cover pool may only be substituted or supplemented by means of:
• the transfer of further assets (eligible to be included in the cover pool in accordance with the criteria
described above);
• the establishment of deposits held with banks ("Qualified Banks") which have their registered office in
a member state of the European Economic Area or in Switzerland or in a state for which a 0 per cent.
risk weight is applicable in accordance with the prudential regulations' standardised approach; and
• the transfer of debt securities, having a residual life of less than one year, issued by the Qualified Banks.
The MEF Regulation and the Bank of Italy Instructions, however, provide that the assets described in the last
two paragraphs above, cannot exceed 15 per cent. of the aggregate nominal value of the cover pool. This 15 per
cent. limitation must be satisfied throughout the transaction and, accordingly, the substitution of cover pool
assets may also be carried out in order to ensure that the composition of the assets comprised in the cover pool
continues to comply with the relevant threshold.
The Bank of Italy Instructions clarify that the limitations to the overall amount of eligible assets that may be
transferred to cover pools described under "The Issuing Bank" above do not apply to the subsequent transfer of
supplemental assets for the purposes described under this paragraph.
Suspension of payments
In exceptional circumstances, pursuant to article 74 of the Consolidated Banking Act, one or more special
administrator (commissari straordinari) appointed by the Bank of Italy, in order to protect the interests of the
creditors, in consultation with an oversight committee composed of between three and five members (comitato di
sorveglianza) and subject to an authorisation by the Bank of Italy, may suspend payment of the bank’s liabilities
and the restitution to customers of financial instruments. Payments may be suspended for a period of up to one
month, which may be extended for an additional two months. During the suspension period forced executions or
actions to perfect security interests involving the bank’s properties or customers’ securities may not be initiated
or prosecuted. During the same period mortgages may not be registered on the bank’s immovable property nor
may any other rights of preference on the bank’s movable property be acquired, except in the case of enforceable
court orders issued prior to the beginning of the suspension period. The suspension shall not constitute
insolvency.
If a resolution pursuant to Article 74 of the Consolidated Banking Act is passed in respect of the Issuer, the SPV,
in accordance with Decree 310, shall be responsible for the payments of the amounts due and payable under the
Covered Bonds within the entire period in which the suspension continues at their relevant due date, provided
that it shall be entitled to claim any such amounts from the Issuer. For further details see section "The Guarantor
- 190 -