S.L. 330.9 Art. 49Derivatives.

(1) The Resolution Committee shall comply with this regulation when applying the write-down and conversion powers to liabilities arising from derivatives.

(2) The Resolution Committee shall exercise the write-down and conversion powers in relation to a liability arising from a derivative only upon or after closing-out the derivatives. Upon entry into resolution, the Resolution Committee shall be empowered to terminate and close out any derivative contract for that purpose.

(3) Where a derivative liability has been excluded from the application of the bail-in tool under regulation 44(3), the Resolution Committee shall not be obliged to terminate or close out the derivative contract.

(4) Where derivative transactions are subject to a netting agreement, the Resolution Committee or an independent valuer shall determine as part of the valuation under regulation 36 the liability arising from those transactions on a net basis in accordance with the terms of the agreement.

(5) The Resolution Committee shall determine the value of liabilities arising from derivatives in accordance with the following:

(a) appropriate methodologies for determining the value of classes of derivatives, including transactions that are subject to netting agreements;

(b) principles for establishing the relevant point in time at which the value of a derivative position should be established; and

(c) appropriate methodologies for comparing the destruction in value that would arise from the close out and bail-in of derivatives with the amount of losses that would be borne by derivatives in a bail-in.