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The International Swaps and Derivatives Association, Inc. (ISDA) has today announced the launch of a second protocol to help market participants to meet the requirements of Article 55 under the European Union (EU) Bank Recovery and Resolution Directive (BRRD).
The second Bail-in Article 55 BRRD Protocol will allow Austrian, Belgian, Danish and Swedish in-scope entities to meet the requirements of Article 55 of the BRRD. This extends coverage to 12 countries, following the launch of the first protocol for Dutch, French, German, Irish, Italian, Luxembourg, Spanish and UK entities in July 2016. The selection and order of the countries for each of these protocols were based on member prioritization.
Article 55 of the BRRD requires in-scope entities to include a contractual term in agreements creating any relevant liability governed by the law of a third country to ensure their creditors recognize that the liability may be subject to bail-in under the BRRD, and agree to be bound by it. The Protocol provides an efficient means for markets participants to amend the terms of certain ISDA Master Agreements and other documentation to reflect those requirements.
“The launch of the second ISDA Bail-in Article 55 BRRD Protocol means institutions in four more countries will have the ability to make the required changes to their documentation in a proficient and scalable way. ISDA will continue to look for ways to help the industry comply with regulations meant to prevent banks from becoming too big to fail,” said Katherine Darras, ISDA’s General Counsel.
The Protocol is available on ISDA’s website.
