EBA consults on records of financial contracts

06 March 2015

The European Banking Authority (EBA) launched today a public consultation on draft Regulatory Technical Standards (RTS) on detailed records of financial contracts of institutions or relevant entities. These RTS have been developed within the framework established by the Bank Recovery and Resolution Directive (BRRD) which sets procedures for the recovery and resolution of credit institutions, investment firms and related entities across the EU Single Market. These standards aim to guarantee appropriate convergence in record keeping across the EU, whilst also ensuring that differences in institutions or relevant entities are taken into account. This consultation runs until 6 June 2015.
 
Amongst the resolution tools and powers foreseen by the BRRD is the power of Resolution Authorities to temporarily suspend the termination rights of any party to a contract with an institution under resolution. In order to ensure the successful application of this power, the EBA is given a mandate to specify the minimum set of the information on financial contracts that  should be kept in the detailed records, as well as the circumstances in which the requirement to maintain detailed financial records should be imposed on institutions and relevant entities.
 
The approach set out in these draft RTS by the EBA ensures that the requested information should be collected in advance for institutions and relevant entities which, in accordance with the resolution plans, are likely to be subject to resolution actions, if they meet the conditions set forth by Article 32 of the BRRD. This information shall be made available to Competent Authorities and Resolution Authorities on request. Conversely, institutions and relevant entities that are likely to be placed into an insolvency procedure are not automatically subject to the requirement to maintain detailed records of financial contracts. However, it remains open to competent authorities and resolution authorities to impose this requirement more broadly or on an ad-hoc basis and at any time, should they consider it appropriate.
 
The draft RTS specify only a minimum list of information which should be contained in the detailed records of financial contracts. This approach is intended to strike a balance between the need to achieve an appropriate level of convergence in record keeping across the EU Single Market, whilst allowing competent authorities and resolution authorities to impose additional requirements, if they considered it appropriate for the purpose of ensuring that resolution powers can be applied effectively to the institution concerned.

Consultation process 

Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 6 June 2015.
 
A public hearing will then take place at the EBA premises on 8 May 2015 at 10:00 am to 1.00 pm UK time. All contributions received will be published following the close of the consultation, unless requested otherwise.

Legal basis 

These draft RTS have been developed according to Article 71(8) of Directive 2014/59/EU (BRRD), which mandates the EBA to develop draft Regulatory Technical Standards (RTS) specifying the minimum set of the information on financial contracts that that should be kept in the detailed records, as well as the circumstances in which the requirement to maintain detailed financial records should be imposed on institutions and relevant entities.