French Monetary and Financial Code
In forceI.-The collège de résolution may suspend any obligation to pay or deliver financial instruments resulting from a contract to which a person referred to in I of Article L. 613-34 is bound if all of the following conditions are met:
1° It has been established that the person's default is actual or foreseeable within the meaning of II of Article L. 613-48 ;
2° There is no reasonable prospect that another measure of a private or prudential nature referred to in 2° of I of Article L. 613-48 will be able to prevent the person's default within a reasonable period of time; 3° The exercise of the power of suspension is deemed necessary to avoid a further deterioration in the person's financial conditions 613-48 is likely to prevent the person from defaulting within a reasonable timeframe;
3° The exercise of the power of suspension is deemed necessary to avoid a further deterioration in the person's financial situation;
4° The exercise of the power of suspension is necessary:
a) Either to verify the condition set out in 3° of II of Article L. 613-49 ;
b) Or to select the appropriate resolution measures or to ensure the effective application of one or more of these measures.
II - The suspension referred to in I shall take effect from the publication of the notice referred to in III of Article L. 613-58. The collège de résolution shall set the duration of this suspension, which must be as short as possible, and which it deems necessary to avoid any further deterioration in the person's financial situation, to make the determination provided for in 3° of II of Article L. 613-49 and to choose the appropriate resolution measures or to ensure the effective application of one or more of these measures. The suspension ends no later than midnight on the business day following publication of the notice.
On expiry of the period set by the College, the suspension ceases to have effect.
III - The College of Resolution shall determine the scope of the decision referred to in I having regard to the circumstances of each case.
The suspension shall not apply to the systems mentioned in I of Article L. 330-1 or their managers, to central counterparties within the meaning of Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 and to central banks.
Where the resolution college exercises its power of suspension in respect of deposits other than those excluded from the deposit guarantee pursuant to II or III of Article L. 312-4-1, it shall ensure that an appropriate amount of such deposits is available to depositors on a daily basis.
Where payment or delivery obligations under a contract are suspended pursuant to I, the payment or delivery obligations of any counterparty to that contract are suspended for the same period.
Where an obligation to pay or deliver financial instruments becomes due during the period of suspension, such payment or delivery shall be due immediately upon expiry of the period of suspension.
IV -When the resolution board exercises the power provided for in I, it may also exercise the powers provided for in II of Article L. 613-56-2 and in Article L. 613-56-5 for a period identical to the suspension period.
The resolution board shall not exercise the powers provided for in II of Article L. 613-56-2, in Article L. 613-56-4 and in Article L. 613-56-5 if it has already exercised the power of suspension provided for in I and has subsequently adopted a resolution measure with regard to a person mentioned in I of Article L. 613-34.
