Guidance on Arrangements to Support Operational Continuity in Resolution: Revised version

The purpose of the guidance, rather, is to identify features and arrangements that are likely to reinforce the resilience of those models with a view to supporting continuity of the services provided in resolution. [...] Operational continuity refers to the means of ensuring or supporting continuity of the critical shared services that are necessary to maintain the provision or facilitate the orderly wind down of a firm’s critical functions in resolution. [...] For example, a statutory power of resolution authorities to enforce SLAs or the continued performance of services may be challenging if the service company is not prudentially regulated unless the resolution regime gives the resolution authority powers over unregulated entities (and the entity is subject to the jurisdiction of the authority). [...] For example, the resolution authority may not be able to prevent the service provider from modifying the terms of the contract or exercising contractual rights (including cross-default rights) to terminate the provision of services on entry into resolution of the firm. [...] In the event of disruption, substitutability of services may be a viable option to maintain the continuity of critical functions and core business lines during the stabilisation and restructuring phases of resolution.