The ISDA 2015 Universal Resolution Stay Protocol (Universal Stay Protocol), developed by ISDA in close coordination with the Financial Stability Board (FSB) and a number of national resolution authorities, addresses a major impediment to the resolvability of global financial institutions. By ensuring counterparties to an entity in resolution are on equal footing with respect to the exercise of default rights, regardless of the governing law of their agreements with that entity, the Universal Stay Protocol is a critical part of efforts to end ‘too big to fail’.
New moratoria powers under the Bank Recovery and Resolution Directive (BRRD) proposed by the European Commission (EC) could trigger opt-out rights for entities that have adhered to the Universal Stay Protocol, therefore jeopardizing its effectiveness for European Union (EU) financial institutions. This would contravene efforts of the FSB to develop effective cross-border resolution frameworks, and would be a step backwards in the implementation of resolution strategies for EU financial institutions with global operations. It would also likely result in an unlevel playing field, with counterparties to non-EU-law-governed agreements standing to benefit at the expense of counterparties to EU-law-governed agreements.
This paper elaborates on the issues that could arise if the proposed moratoria powers are enacted and opt-out rights are triggered under the Universal Stay Protocol.
Documents (1) for Proposed Moratoria Under the BRRD and the Impact on the Universal Stay Protocol
Latest
Response to JSCC on Clearing Fund Consolidation
On August 12, ISDA responded to the Japan Securities Clearing Corporation’s (JSCC) consultation on its proposal to consolidate clearing fund consumption, calculation and deposit segmentation across six clearing qualifications under the Financial Instruments and Exchange Act. ISDA members broadly support...
Response on CSDD Guidelines
On August 6, ISDA responded to the European Commission’s (EC) consultation on due diligence guidelines under the Corporate Sustainability Due Diligence Directive (CSDDD). While ISDA acknowledges that model contractual clauses can be a helpful resource for in-scope companies, there are...
Response to BoE on Extension of Settlement Hours
On August 6, ISDA responded to the Bank of England’s (BoE) consultation paper on the extension of settlement hours for RTGS and CHAPS, the UK’s high-value payment system. ISDA supports the BoE’s plan to extend RTGS and CHAPS settlement hours...
SwapsInfo H1 2026 & Q2 2026 Review
Trading activity in interest rate derivatives (IRD) and credit derivatives increased in the first half of 2026 compared with the same period in 2025. Growth in IRD was driven by overnight index swaps (OIS), while higher index credit derivatives activity...