Under Directive 2014/59/EU of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms, as amended (BRRD II), as implemented into French law, the French banking authority (Autorité de contrôle prudentiel et de resolution, the ACPR) should take into account, for the purpose of establishing resolution plans, several items when assessing whether an entity may be wound up or be subject to one or more of the resolution measures.
These items, which are listed at article 1 of the French order (arrêté) dated 11 September 2015 on the criteria for assessing resolvability, where amended by an order (arrêté) dated 1 March 2021, which deleted the obligation for the ACPR to examine the extent to which certain measures or restrictions of rights (in particular its “stay powers”, which entitles the competent authority to suspend, for approximately 48 hours, certain rights of the parties such as early termination, close out netting, collateral enforcement, etc.) could effectively be applied to the relevant financial contracts governed by the law of a third country to which the regulated entity is a party (or an entity of the group to which this entity belongs and which is bound by a cross-default clause).
Indeed, these provisions were not relevant anymore, as the implementation into French law by an ordinance (ordonnance) of 21 December 2020 on the resolution regime in the banking sector, of BRRD II, introduced the obligation to insert recognition of resolution stay powers clauses in financial contracts that the regulated entities enter into when these agreements are governed by third-country law, such as English laws since the end of the Brexit transition period for instance. Under these clauses, the parties recognize that the financial contract may be subject to the exercise of powers by the relevant competent resolution authority to suspend or restrict rights.
and then 