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15 July 2005
In 2003 Parliament passed an act amending the Financial Services Act 1988 to allow financial institutions to issue covered bonds and enter into securitization transactions (for further details please see "New Rules Governing Covered Bonds and Securitization"). These amendments came into force on January 1 2004. Covered bonds may be issued only by specialized credit institutions. Pursuant to the rules on covered bonds, the Ministry of Finance has authority to issue detailed regulations applying to covered bonds. The Norwegian finance industry has taken a considerable interest in the work on these regulations and has submitted several proposals to the ministry in this regard. The regulations are yet to be issued. It is expected that no covered bonds will be issued until the regulations are in place.
The new rules on securitization can be utilized by any Norwegian financial institution. As opposed to the new rules on covered bonds, no regulations will be issued with respect to securitization, which means that the securitization rules can be used today. It is thought that no securitization transaction has been completed thus far.
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