(This note is not part of the Regulations)

These Regulations provide a new legislative framework for covered bonds in the UK. The Regulations implement Article 22(4) of Council Directive 85/611/EC of 20 December 1985 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities ("UCITS Directive") (as inserted by Directive 2001/108/EC of 21 January 2002); Article 22(4) of Council Directive 92/49/EC of 18 June 1992 on the co-ordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance ("Third Non-Life Directive"); and Article 24(4) of Directive 2002/83/EC of the European Parliament and of the Council concerning life assurance ("Consolidated Life Directive"). The relevant requirements of the UCITS Directive, the Third Non-Life Directive and the Consolidated Life Directive are in the same terms. These Regulations also implement paragraph 68 of Annex 6 to Directive 2006/48/EEC of the European Parliament and of the Council relating to the taking up and pursuit of the business of credit institutions ("the Banking Consolidation Directive").