(1) A designated mortgage credit institution may, with the prior consent of the cover-assets monitor concerned, use the proceeds of a cover asset that has been realised -

(a) to create or acquire permitted mortgage credit assets or substitution assets for inclusion in the relevant cover assets pool, or

(b) to discharge secured claims.

(2) Subsection (1) applies even if -

(a) the institution is subject to an insolvency process, or

(b) the institution has been given a notice of the kind referred to in section 35 (5) (e).

(3) Money received by a designated mortgage credit institution as the proceeds of realising a cover asset forms part of the relevant cover assets pool, and is to be treated as part of the related mortgage credit asset or related substitution asset, until it -

(a) is used in accordance with subsection (1),