Regulatory Alerts2021-12-22
Added · Updated
Code of Practice Chapter ST-1 on Contractual Recognition of Suspension of Termination Rights
The Hong Kong Monetary Authority issued Chapter ST-1 of its Code of Practice to provide guidance on the Financial Institutions (Resolution) (Contractual Recognition of Suspension of Termination Rights – Banking Sector) Rules. The document requires authorized institutions, holding companies, and related companies to ensure their financial contracts contain provisions agreeing to be bound by temporary stays on termination rights during resolution. Compliance with these rules is essential for demonstrating resolvability, and non-compliance by related companies may be treated as a significant impediment to the orderly resolution of the group.
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