EBA is consulting on the regulatory technical standards for contractual recognition of stay powers laid down in the Bank Recovery and Resolution Directive (BRRD). The regulatory technical standards support effective application of temporary restrictions on early termination rights (resolution stays) in relation to financial contracts governed by the law of a third country. These standards constitute the first EBA mandate stemming from the revised BRRD and aim to promote the effective application of recovery and resolution powers to banks and banking groups. The consultation period for the regulatory technical standards ends on August 15, 2020.
BRRD requires member states to ensure that their resolution authorities can effectively make use of the stay powers on contracts that an institution or entity has entered into, in case resolution powers or crisis prevention measures are applied. The draft regulatory technical standards being consulted on specify the contents of the contractual terms required to be included in relevant financial contracts where no alternative mechanism (that is, statutory) exists to secure recognition by the counterparty of the resolution authority’s powers to suspend or restrict rights and obligations. These include provisions specifying the acknowledgement, description of the powers, and recognition of the parties that they are bound by the powers to suspend certain obligations and restrictions of some rights and that they are bound by the requirements of Article 68 of BRRD. In addition, the parties acknowledge that no other contractual term impairs the effective and enforceability of this clause.
This approach is intended to strike a balance between the need to achieve an appropriate level of convergence while ensuring that differences in legal systems of third countries as well as other differences arising from different forms of financial contracts can be taken into account by resolution authorities, institutions, and relevant entities through the addition of further elements, if necessary; the aim is to achieve the policy goal of ensuring that the powers to suspend or restrict rights and obligations can be applied effectively in relation to financial contracts governed by the law of a third country.
Comment Due Date: August 15, 2020
Keywords: Europe, EU, Banking, BRRD, Resolution Framework, Regulatory Technical Standards, Financial Contract, Basel, EBA
Next ArticleEBA Single Rulebook Q&A: Second Update for May 2020
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.