Regulations published by French regulator ACPR in December detailing reporting obligations of French covered bond issuers are more comprehensive and standardised than expected and strengthen legal tests on maturity matching and liquidity, Moody’s said today (Friday).

Autorité de Contrôle Prudentiel et de Résolution (ACPR) published the regulations after in May 2014 two maturity-matching obligations were introduced to the French covered bond framework: a maximum 18 month average life difference between assets and liabilities; and an obligation to report the “coverage level” – how well the issuer matches payments due on covered bonds to the timing of collections on cover pool assets, according to Moody’s.

“The regulator shows its intention to closely monitor the maturity mismatches by imposing detailed reporting rules to the issuers to obtain transparent and comparable information,” said the rating agency.

However, while the information will be made available to those responsible for oversight – the relevant asset monitor and the regulator – there is no obligation for it to be made public, noted Moody’s.

Additional details have been set out to how the 18 month asset-liability difference is calculated and how the coverage level is reported.

“The additional details that the regulation provides mean that the information provided to the regulator and each issuer’s asset monitor is significantly more comprehensive and standardised than the information initially contemplated,” said Moody’s.

A 180 day liquidity test has also been strengthened, it added, with issuers having to show how liquidity needs can be covered on a daily basis rather than just globally over a six month period.

Moody’s noted that a law to address a servicing contingency plan implemented in June 2014 is still pending.

“Further detail on this plan would focus attention on how to limit the disruption risk in a scenario where the sponsor bank defaults,” it said.