French Monetary and Financial Code
In forceI. - When it orders the transfer of part of the assets, rights and obligations of a person subject to resolution proceedings to another entity or when it implements a measure provided for in II of Article L. 613-56-3, the resolution board shall ensure, subject to the provisions of Articles L. 613-50-4, L. 613-56-2, L. 613-56-4 and L. 613-56-5, the protection of collateral agreements, netting agreements, covered bonds and structured finance mechanisms defined by decree, in which the person subject to resolution proceedings participates. 613-56-4 and L. 613-56-5, ensure the protection of collateral arrangements, netting agreements, covered bonds and structured finance mechanisms defined by decree, in which the person subject to resolution proceedings participates, as well as the protection of its counterparties, under the conditions provided for in this article.
The same applies where the resolution board has ordered the transfer of part of the assets, rights and obligations of a bridge institution or asset management structure to another person.
II. - The rights and obligations resulting from a financial collateral arrangement with transfer of ownership, a reciprocal netting agreement or a netting agreement involving a person referred to in I of Article L. 613-34 subject to a resolution procedure may not be partially transferred, modified or terminated when the resolution college implements the provisions of I of Article L. 613-56-2, II and III of Article L. 613-56-3 and Article L. 613-56-6. This concerns rights and obligations that may be offset or, after expiry of their term, offset or converted into a single balance.
III. - When the collège de résolution takes a resolution measure, it shall ensure, with regard to commitments covered by a guarantee contract, compliance with the following provisions:
1° The debts and claims of the guarantor and the beneficiary of the guarantee, as well as the guaranteed financial obligations, may not be transferred separately;
2° The amendment or termination of a guarantee contract may not have the effect of terminating the guarantee of the financial obligation.
IV. - The assets, rights and obligations that make up all or part of a structured finance facility in which a person subject to the resolution procedure participates may not be partially transferred or modified or terminated by the exercise of a resolution measure.
V. - By way of derogation from II to IV, in order to ensure the availability of funds benefiting from one of the guarantees mentioned in II of Article L. 312-4, the resolution board may:
1° Transfer funds covered by a financial collateral arrangement with transfer of ownership, a reciprocal netting agreement or a netting agreement, without transferring the other assets, rights or obligations of the same arrangement ;
2° Transfer, modify or terminate rights or obligations under a title transfer financial collateral arrangement, a cross-collateral netting agreement, a netting agreement, a collateral arrangement or a structured finance facility, without transferring the funds referred to in the first paragraph of this V.
