- Question ID
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2021_6240
- Legal act
- Directive 2013/36/EU (CRD)
- Topic
- Internal governance
- Article
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Paragraph 75(o) of EBA guidelines on outsourcing
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Not applicable
- Article/Paragraph
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Paragraph 75(o) of EBA guidelines on outsourcing
- Type of submitter
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Credit institution
- Subject matter
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EBA Guidelines - critical outsourcing - references to BRRD
- Question
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Pursuant to paragraph 75(o) of the EBA Guidelines on outsourcing arrangements, the outsourcing agreement for critical or important functions should set out a clear reference to Articles 68 and 71 of Directive 2014/59/EU (BRRD). On the other hand, the BRRD, as amended through the Directive (EU) 2019/879 (BRRD 2), imposes an obligation to include such articles only in financial contracts (these will essentially include derivative contracts, repurchase agreements etc.), governed by third country law. Clarification is sought as to whether contracts for critical outsourcing arrangements should incorporate references to Articles 68 and 71 of BRRD, as amended, irrespective of such contracts not being financial contracts pursuant to BRRD.
- Background on the question
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EBA guidelines on outsourcing:
75. The outsourcing agreement for critical or important functions should set out at least:
....
(o) for institutions, a clear reference to the national resolution authority’s powers, especially to Articles 68 and 71 of Directive 2014/59/EU (BRRD), and in particular a description of the ‘substantive obligations’ of the contract in the sense of Article 68 of that Directive.
Article 71a of BRRD, as amended - Contractual recognition of resolution stay powers
1. Member States shall require institutions and entities referred to in points (b), (c) and (d) of Article 1(1) to include in any financial contract which they enter into and which is governed by third-country law, terms by which the parties recognise that the financial contract may be subject to the exercise of powers by the resolution authority to suspend or restrict rights and obligations under Articles 33a, 69, 70, and 71 and recognise that they are bound by the requirements of Article 68.
- Submission date
- Rejected publishing date
-
- Rationale for rejection
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This question has been rejected because it is considered that EBA guidance or clarification is not needed with regard to the issue that it raises. For example, this can be the case where it is considered that the existing regulatory framework is sufficiently clear and unambiguous, or where different practices may be possible but it is not currently necessary to harmonise these further through the Q&A process. In particular, please see Articles 68 and 71 BRRD.
The Single Rule Book Q&A tool has been established to provide explanations and non-binding interpretations on questions relating to the practical application or implementation of the provisions of legislative acts referred to in Article 1(2) of the EBA’s founding Regulation, as well as associated delegated and implementing acts, and guidelines and recommendations, adopted under these legislative acts.
For further information on the purpose of this tool and on how to submit questions, please see “Additional background and guidance for asking questions”.
- Status
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Rejected question