5.2 Eligibility requirements for unfunded credit protection

For the purposes of Article 183(1)(c) of Regulation (EU) No 575/2013, institutions should obtain a legal opinion confirming that the unfunded credit protection arrangement is legally effective and enforceable in all relevant jurisdictions. This legal opinion should be:

• (a) carried out at least for each type of unfunded credit protection; and
• (b) provided in a written form by a legal counsel. Where the legal counsel is an employee of the institution, the legal counsel should be independent from the credit decision process responsible for originating or renewing the exposures under consideration.

For the purposes of paragraph 24, institutions may rely on a single legal opinion to support multiple unfunded credit protection arrangements where it relates to the same applicable law. Institutions should obtain additional legal opinion relating to any substantive variation to the terms of the contract that could affect the legal effectiveness and enforceability of the arrangement of the specific unfunded credit protection. At a minimum, changes in the legal framework applicable to the unfunded credit protection arrangement and the application of such unfunded credit protection arrangement to other types of exposures, or the use of guarantors classified to other exposure classes or to other types of guarantors, meaning individual persons or legal entities, should always be considered cases of substantive variation to the terms of the contract.