Question ID
2018_3702
Legal act
Directive 2014/59/EU (BRRD)
Topic
Cross-border resolution
Article
94
Paragraph
4
Subparagraph
d
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
n.a.
Type of submitter
Competent authority
Subject matter
Enforce a third country resolution proceeding
Question

How should the outcome under Article 94(4)(d) be achieved and in what way is that article different from the provision under Article 68?

Background on the question

Article 94(4)(d) of Directive 2014/59/EU (BRRD) provides that, in order to enforce a third country resolution proceeding, a resolution authority should be able to “render unenforceable any right to terminate, liquidate or accelerate contracts”.

Please clarify how such outcome should be achieved and whether it is different from the provision under Article 68.

Submission date
Final publishing date
Final answer

There is no difference in terms of the objective between Articles 94(4)(d) and 68(3) of Directive 2014/59/EU (BRRD), which is that the party to a contract cannot exercise their termination right under a set of conditions. However, Article 94(4)(d) of Directive 2014/59/EU (BRRD) only refers to the enforcement of third-country resolution proceedings. In addition, Article 94(4)(d) of Directive 2014/59/EU (BRRD) applies during the resolution procedure, whereas Art 68(3) refers also to measures which can be used before resolution

Disclaimer:

This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.

Status
Final Q&A
Answer prepared by
Answer prepared by the European Commission because it is a matter of interpretation of Union law.
Note to Q&A

Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Directive 2014/59/EU (BRRD) and continues to be relevant.

Disclaimer

The Q&A refers to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.