S.L. 330.9 Art. 71Power to temporarily suspend termination rights.

(1) The Resolution Committee may suspend the termination rights of any party to a contract with an institution under resolution from the publication of the notice pursuant to regulation 83(4) until midnight at the end of the business day following that publication, provided that the payment and delivery obligations and the provision of collateral continue to be performed.

(2) The Resolution Committee may suspend the termination rights of any party to a contract with a subsidiary of an institution under resolution where:

(a) the obligations under that contract are guaranteed or are otherwise supported by the institution under resolution;

(b) the termination rights under that contract are based solely on the insolvency or financial condition of the institution under resolution; and

(c) in the case of a transfer power that has been or may be exercised in relation to the institution under resolution, either:

(i) all the assets and liabilities of the subsidiary relating to that contract have been or may be transferred to and assumed by the recipient; or

(ii) the Resolution Committee provides in any other way adequate protection for such obligations:

Provided that the suspension shall take effect from the publication of the notice pursuant to regulation 83(4) until midnight in the Member State where the subsidiary of the institution under resolution is established on the business day following that publication.

(3) Any suspension under sub-regulation (1) or (2) shall not apply to systems or operators designated for the purposes of Directive 98/26/ EC, central counterparties authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country central counterparties recognised by ESMA pursuant to Article 25 of Regulation (EU) No 648/2012, or central banks.

(4) A person may exercise a termination right under a contract before the end of the period referred to in sub-regulations (1) and

(2) if that person receives notice from the Resolution Committee that the rights and liabilities covered by the contract shall not be:

(a) transferred to another entity; or

(b) subject to write down or conversion on the application of the bail-in tool in accordance with regulation 43(2)(a).

(5) Where the Resolution Committee exercises the power specified in sub-regulations (1) and (2) to suspend termination rights, and where no notice has been given pursuant to sub-regulation (4), those rights may be exercised on the expiry of the period of suspension, subject to regulation 68, as follows:

(a) if the rights and liabilities covered by the contract have been transferred to another entity, a counterparty may exercise termination rights in accordance with the terms of that contract only on the occurrence of any continuing or subsequent enforcement event by the recipient entity;

(b) if the rights and liabilities covered by the contract remain with the institution under resolution and the Resolution Committee has not applied the bail-in tool in accordance with regulation 43(2)(a) to that contract, a counterparty may exercise termination rights in accordance with the terms of that contract on the expiry of a suspension under sub-regulation (1).

(6) When exercising a power under this regulation, the Resolution Committee shall have regard to the impact the exercise of that power might have on the orderly functioning of the financial markets.

(7) The Authority or the Resolution Committee may require an institution or an entity referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1) to maintain detailed records of financial contracts.

(8) Upon the request of the Authority or the Resolution Committee, a trade repository shall make the necessary information available to the Authority and the Resolution Committee to enable them to fulfil their respective responsibilities and mandates in accordance with Article 81 of Regulation (EU) No 648/2012.