The Bank of England, as Prudential Regulation Authority (PRA), has published a consultation paper on the subject of contractual stays in certain financial contracts. It proposes a new rule for the PRA Rulebook requiring the contractual adoption of UK resolution stays in certain financial contracts governed by the law of a jurisdiction outside of the EEA. The focus on contracts governed by such “third country law” is driven by a technical concern that the PRA’s power to impose temporary and general stays may not be recognised or enforced by a court outside of the EU. The proposed rule is broadly directed at PRA-regulated or designated firms (typically the sell-side of the market), and various entities in those groups. It would prohibit those firms from creating new obligations or materially amending an existing obligation under such a financial contract without the required counterparty agreement. The prohibition applies unless the counterparty (for which, read, buy-side) has agreed in writing to be subject to similar restrictions on early termination, acceleration, close-out, set-off and netting to those that would apply as a result of the firm’s entry into resolution if the financial contract were governed by the laws of the UK. In this respect the proposed rule is seeking to harmonise the position between counterparties to UK firms trading under contracts governed by UK law (or the law of another EU Member State) and contracts governed by third-country law. In terms of scope, the rule would capture a broad definition of “financial contract” including repos, swaps and derivatives and currency trades. In terms of timing, there is an aggressive timeframe with the rule scheduled to come into effect on a staggered basis with the first key date being 1 January 2016 (and for this purpose the rollover or renewal of a transaction entered into prior to the applicable date of the rule would constitute a new obligation that must contain the appropriate contractual terms). The concept of a stay is controversial as the desire for regulators to act for the greater good is potentially at the expense of contractual freedom to manage risk.