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Right to temporarily suspend termination right for contracts because of resolution measure

Monetary Authority of Singapore Act 1970

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—(1) This section applies to a contract one of the parties to which is —(a)a pertinent financial institution that is the subject or proposed subject of a resolution measure;(b)a pertinent financial institution in respect of which a foreign resolution authority of a foreign country or territory has carried out, or has informed the Authority that it has grounds to carry out, a foreign resolution; or(c)an entity that is part of the same group of companies as that of a pertinent financial institution where —(i)the pertinent financial institution is the subject or proposed subject of a resolution measure;(ii)the contract has a termination right that is exercisable if the pertinent financial institution becomes insolvent or is in a certain financial condition; and(iii)the obligations of the entity under the contract are guaranteed or otherwise supported by the pertinent financial institution.(2) The Authority may, by written notice to the parties to the contract, suspend the exercise of any termination right in the contract for a specified period.(3) The notice under subsection (2) does not apply to —(a)a termination right under the contract which becomes exercisable for a breach of a basic substantive obligation only;(b)a termination right under a contract between the pertinent financial institution and a person prescribed for the purposes of this paragraph by regulations made under section 126; or(c)a termination right under a contract, or a contract within a class of contracts, prescribed for the purposes of this paragraph by regulations made under section 126.(4) When exercising a power under subsection (2), the Authority must have regard to its impact on the safe and orderly functioning of the financial market and financial market infrastructures operating in Singapore.(5) The notice under subsection (2) —(a)may relate to all or any class or description of parties to a contract;(b)may make different provisions for different classes or descriptions of parties to a contract; and(c)may be of general or specific application.(6) A copy of the notice under subsection (2) must be published —(a)by the Authority in the Gazette and on its website; and(b)by the pertinent financial institution on its website.(7) In this section, a pertinent financial institution is a proposed subject of a resolution measure if the Authority is satisfied that there is a basis for that action under section 50 in relation to that pertinent financial institution.

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