Resolution planning produces a document. Operational continuity in resolution produces contractual obligations, and they land in places the planning team rarely looks: the core banking platform agreement, the payments processor contract, the market data licence, the facilities management deal that keeps the data centre cooled.
The supervisory logic is direct. A resolution authority can transfer a failing bank’s business to a bridge entity or a purchaser, but the transfer is worthless if the providers of the underlying services can terminate the moment resolution is triggered, or if the services are provided under an intragroup arrangement that has no documented terms at all.
This guide covers what supervisors expect to see in service agreements supporting critical functions, why the provisions are easy to draft and hard to evidence at population level, and how contract teams can move from sampling a handful of agreements to reporting coverage across the whole vendor base. The work is unglamorous and largely mechanical, which is precisely why it tends to be deferred until an assessment forces it.
The provisions supervisors look for
Expectations differ by jurisdiction, but the substance converges on a short list of contractual features in agreements supporting critical or important functions.
- No resolution-triggered termination, the provider cannot terminate, suspend or amend the agreement solely because the counterparty has entered resolution or a related proceeding.
- Transferability, the contract can be assigned or novated to a bridge institution, a purchaser or another successor entity without the provider’s consent being used as a veto.
- Continued performance obligations, the provider must keep performing during a stay or transfer period, provided it continues to be paid for the services delivered.
- Documented terms for intragroup services, services provided by affiliates are papered at arm’s length with defined scope, service levels and pricing, so they can survive the separation of group entities.
- Exit and transition assistance, a defined period of support, with scope and pricing agreed in advance, so that a wind-down or transfer does not depend on goodwill negotiated under pressure.
Individually these are unremarkable clauses, and most large providers accept them without much resistance. The difficulty is not negotiating them once. It is knowing, across several thousand supplier agreements, which ones support a critical function and which of those actually contain each provision. That is a data problem rather than a legal one, and it is why resolution teams and contract teams need to be working from the same record.
A supervisor asking about operational continuity is usually asking a population question: how many of your critical service contracts contain compliant continuity provisions, and how do you know. Answering with a well-drafted template and three examples is not the same as answering with a coverage figure and the field that produces it. That distinction determines how the conversation goes.
Why coverage is hard to evidence
The obstacles are structural rather than legal, and they are familiar to anyone who has tried to produce any portfolio-level answer from a contract estate.
- Criticality is mapped to services, not contracts. The resolution plan identifies critical functions and the services supporting them, but the link from service to the specific executed agreement is often missing.
- Provisions sit in different articles. Termination, assignment and transition assistance appear in separate parts of the agreement, so extraction has to target several places rather than one clause.
- Legacy agreements predate the expectation. Contracts signed before resolution planning matured frequently lack the provisions entirely, and they are precisely the long-running relationships supporting core infrastructure.
- Amendments and order forms override the master. A compliant master agreement can be undermined by a later order form with its own termination rights, and the master is what gets reviewed.
- Intragroup arrangements are undocumented. Services between affiliates are the most common gap, because internally nobody felt the need for a contract until separation became a scenario.
Five steps to evidenced continuity coverage
Step 1, Link critical services to their contracts
Take the critical function and service mapping from the resolution plan and attach each supporting service to the executed agreement that provides it. This is tedious and it is the step that cannot be skipped, because everything downstream is a filter on the resulting population. Expect the first pass to surface services with no identifiable contract at all.
Step 2, Extract the relevant provisions into fields
Pull termination triggers, assignment and change of control terms, continued performance obligations and transition assistance scope into structured fields on each agreement. Extraction should flag absence as clearly as presence, since a missing clause is the finding that matters.
Step 3, Grade the population against the standard
Score each critical contract as compliant, partially compliant or non-compliant against your defined clause standard, and record the rationale. A graded population gives you a coverage figure, a remediation backlog ordered by criticality and an auditable basis for both.
Step 4, Run remediation through the renewal cycle
Amending contracts out of cycle is expensive and slow. Attach the required provisions to each agreement’s renewal or next amendment, prioritize the highest criticality gaps for out-of-cycle action, and track each remediation as a dated obligation with an owner rather than a line on a project plan.
Step 5, Paper the intragroup arrangements
Document affiliate-provided services with real scope, service levels and pricing. This is often the largest single gap and the one supervisors probe hardest, because an undocumented intragroup dependency is the clearest evidence that separation has not been thought through.
See continuity provisions mapped across the portfolio
Watch how termination, assignment and service-level terms become reportable fields on every critical vendor agreement.
How this connects to third-party risk work
Continuity provisions overlap heavily with the clause set already required by third-party risk supervision, so the extraction work has more than one payoff. The audit rights, subcontracting controls and termination provisions catalogued in OCC and FFIEC vendor contract expectations, explained come from the same articles of the same agreements. Treating them as one extraction exercise, with one register and one coverage report, avoids running two parallel programs over the same contracts. Tracking the resulting commitments as dated obligations with owners is the model set out in Obligation Management for Financial Services. Running them separately produces two coverage figures that do not reconcile, which is worse than having one.
Provision, what it prevents and how to evidence it
Each provision addresses a specific failure in a resolution scenario, and each has a natural evidence artifact.
| Provision | Failure it prevents | Field on the record | Evidence |
|---|---|---|---|
| No resolution-triggered termination | Provider walks at the worst moment | Termination trigger present, yes or no | Clause extract and reference |
| Transferability | Transfer to bridge entity blocked | Assignment consent standard | Clause extract and reference |
| Continued performance | Service stops during a stay | Continuity obligation present | Clause extract and reference |
| Intragroup documentation | Affiliate service has no terms | Agreement exists, yes or no | Executed intragroup agreement |
| Transition assistance | Exit negotiated under duress | Assistance period and pricing | Clause extract and pricing schedule |
Operational continuity in resolution is one of those regulatory expectations that looks like a planning exercise and turns out to be a contract data exercise. The provisions themselves are short and rarely contentious. What takes the time is identifying which of several thousand agreements supports a critical function, determining which of those already carry the provisions, and producing a number you can defend. Institutions that build that population view once find it serves resolution planning, third-party risk and exit planning from the same underlying record. It also turns an annual scramble into a standing report, which is a material improvement in how the supervisory conversation goes.
For related guidance, see DORA and ICT contracts: what Article 30 requires, OCC and FFIEC expectations for vendor contract files and OCC and FFIEC vendor oversight, the contract controls.
