(a) Covered QFCs not required to be conformed.
(1) Notwithstanding section 252.82, a covered
entity is not required to conform a covered QFC to the requirements
of this section if:
(i) The covered QFC designates, in the
manner described in paragraph (a)(2) of this section, the U.S. special
resolution regimes as part of the law governing the QFC; and
(ii) Each party to the
covered QFC, other than the covered entity, is:
(A) An individual
that is domiciled in the United States, including any State;
(B) A company that is incorporated
in or organized under the laws of the United States or any State;
(C) A company the principal
place of business of which is located in the United States, including
any State; or
(D) A U.S.
branch or U.S. agency.
(2) A covered QFC designates the U.S. special
resolution regimes as part of the law governing the QFC if the covered
QFC:
(i) Explicitly provides that the covered
QFC is governed by the laws of the United States or a state of the
United States; and
(ii) Does not explicitly provide that one or both of the U.S. special
resolution regimes, or a broader set of laws that includes a U.S.
special resolution regime, is excluded from the laws governing the
covered QFC.
(b) Provisions required. A covered QFC must
explicitly provide that:
(1) In the event the covered entity becomes
subject to a proceeding under a U.S. special resolution regime, the
transfer of the covered QFC (and any interest and obligation in or
under, and any property securing, the covered QFC) from the covered
entity will be effective to the same extent as the transfer would
be effective under the U.S. special resolution regime if the covered
QFC (and any interest and obligation in or under, and any property
securing, the covered QFC) were governed by the laws of the United
States or a state of the United States; and
(2) In the event the covered entity or
an affiliate of the covered entity becomes subject to a proceeding
under a U.S. special resolution regime, default rights with respect
to the covered QFC that may be exercised against the covered entity
are permitted to be exercised to no greater extent than the default
rights could be exercised under the U.S. special resolution regime
if the covered QFC were governed by the laws of the United States
or a state of the United States.
(c) Relevance of creditor protection provisions. The requirements of this section apply notwithstanding paragraphs
(d), (f), and (h) of section 252.84.
