Guidance

SS42/15 – Contractual stays in financial contracts governed by third-country law

Chapter

Recordkeeping

Printed on: 08/09/2024

Rulebook at: 01/06/2016

5

Recordkeeping

5.1

As noted in CP19/15[1], the EU Bank Recovery and Resolution Directive (BRRD)[2] empowers competent authorities and resolution authorities to require a firm to maintain detailed records of financial contracts. Regulatory Technical Standards (RTS) under BRRD Article 71(8) will set out a minimum set of information concerning financial contracts that a firm must be obliged to record if its resolution plan foresees that resolution action will be taken in respect of it. In light of the ongoing work in this area, the PRA does not consider it necessary to impose a separate information obligation to monitor compliance with the rules at this time, but intends to revisit the issue when the final RTS come into effect.

  • 1. PRA Consultation Paper 19/15, ‘Contractual stays in financial contracts governed by third-country law’, May 2015; www.bankofengland.co.uk/pra/Pages/publications/cp/2015/cp1915.aspx
  • 2. Directive 2014/59/EU Bank Recovery and Resolution Directive: establishing a framework for the recovery and resolution of credit institutions and investment firms.
  • 01/06/2016

5.2

The PRA is not currently requiring firms to make regular reporting on their financial contracts. However, the PRA does expect firms to be able to provide information on their financial contracts (including the governing law and whether the contract contains the necessary recognition provision) and be able to demonstrate compliance with the rules. If necessary in an individual case, the PRA (or, where appropriate, the Bank of England in its capacity as resolution authority) may require the relevant firm to provide this information, for instance, as part of Part 2 of resolution planning or contingent information requests as set out in Supervisory Statement 19/13.[3]

  • 01/06/2016