Background
This supervisory statement (SS) sets out the expectations of the Prudential Regulation Authority (PRA) on PRA-authorised firms in respect of the PRA rules on contractual stays in financial contracts governed by third-country law.
This statement is intended to be read together with the Stay in Resolution Part of the CRR Firms and Non-Authorised Persons Sectors of the PRA Rulebook.
This statement is relevant to PRA-authorised banks, building societies, PRA-designated investment firms and their qualifying parent undertakings, which for this purpose comprise UK financial holding companies and UK mixed financial holding companies (together, ‘UK firms’).
This statement is also relevant to credit institutions, investment firms and financial institutions that are subsidiaries of those firms listed above, regardless of the jurisdiction of establishment or incorporation of the subsidiary, to the extent that the subsidiary enters into a financial arrangement governed by third-country law which contains termination rights or security interests the exercise of which could be suspended or prevented under the Special Resolution Regime (SRR) under Part 1 of the Banking Act 2009, if the contract were governed by UK law.
This statement is also relevant to counterparties of UK firms and in scope subsidiaries with third-country law financial arrangements.
Supervisory Statement 42/15