The European Commission has adopted a Delegated Regulation that concerns the classes of arrangements to be protected in a partial transfer or in the case of modification of contractual terms, under Article 76 of the Bank Recovery and Resolution Directive (BRRD).
Article 76 of the BRRD provides safeguards for certain contracts in the event of partial transfer of assets, rights and liabilities of an institution under resolution or in the event of forced contractual modifications. The safeguards are intended to prevent, when a partial transfer or a contractual modification has been effected, the splitting of assets, rights and liabilities which are linked by virtue of certain arrangements, when such linkage is justified by a lawful objective.
The BRRD also provides that the safeguards apply irrespective of the number of parties involved in the arrangements and of whether the arrangements are created by contract, or provided by law, or are governed in whole or in part by the law of another Member State or of a third country. It also determines the form of protection that is appropriate for each class of arrangements and the limits to this protection.
Article 76(4) of the BRRD empowers the Commission to adopt a delegated act to further specify the classes of arrangement that benefit from the safeguards. The European Banking Authority has issued its advice on the matter, which the Commission has followed.
The Commission considers that the method of specification to be used in the Delegated Regulation should be the adoption of a more detailed set of rules and definitions than those already contained in the BRRD. The Delegated Regulation does not establish a list of protected arrangements. Instead, for specific classes of arrangements, the Delegated Regulation refers to the definitions in the BRRD , or in their absence, to definitions in other EU legislation, adding elements or setting out conditions for the application of the protection where required. On this basis, the Delegated Regulation only further specifies a class of arrangements where the Commission feels that the BRRD does not sufficiently do so.
The Council of the EU and the European Parliament will now consider the Delegated Regulation. If neither of them objects, the Delegated Regulation will enter into force
View Commission Delegated Regulation (EU) of 7.2.2017 on classes of arrangements to be protected in a partial property transfer under Article 76 of Directive 2014/59/EU of the European Parliament and of the Council, 7 February 2017