Regulatory Alerts2018-01-17
Provisions on the Temporary Suspension by the Resolution Authority of Termination Mechanisms in Financial Contracts Governed by the Law of a Third State
The Bank of Italy, acting as the resolution authority, issues provisions implementing Article 68 of Legislative Decree 180/2015 to mandate contractual clauses requiring counterparties to accept temporary suspensions of termination rights in financial contracts governed by third-country law. This measure applies to banks and financial companies under the Single Resolution Board's competence, aiming to enhance resolvability and align Italian regulations with international standards set by the Financial Stability Board. The rules enter into force immediately, with a one-year transition period for most entities, while G-SIBs must comply immediately to maintain continuity with the ISDA Universal Resolution Stay Protocol.
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