Christopher Leonard Participates in LexisNexis Q&A on the UK’s Prudential Regulatory Authority

Friday, January 15, 2016 - 16:23

Akin Gump litigation partner Christopher Leonard was interviewed by LexisNexis as part of a Q&A column pertaining to the Bank of England’s Prudential Regulation Authority (PRA) and its final proposals related to contractual stays in financial contracts governed by third-country law. The article notes that the rules are aimed at “reducing the risk of contagion from the failure of a relevant firm and supporting its orderly resolution.”

The column begins with Leonard providing some background on the rules, which he said originated with the financial crisis. In its aftermath, there has been a great deal of work, he said, “to provide governments, central banks and financial regulators with an enhanced ‘toolkit’ of powers which are intended to help them manage and mitigate the consequences of a significant financial institution suffering an insolvency event.”

Leonard proceeds to discuss what businesses should be aware of in the final rules, how the PRA has dealt with concerns within the industry, and offers some thoughts on the steps firms should take in light of the rules.

Finally, Leonard offered some thoughts on how lawyers should advise clients in relation to the new requirements. For PRA-authorized firms, he said, “the resolution stays will quickly become standard business practice.” Non-European Economic Area counterparties, however, “may need to have explained “the impact these provisions have on the risk profile of the relevant contracts and the fact that--if the client wants to transact with a UK financial institution--they are obligatory.”

To read the full Q&A, please click here.