1. Member States shall ensure that there is appropriate protection for title transfer financial collateral arrangements, set-off and netting arrangements, and reinsurance agreements so as to prevent the transfer of some, but not all, of the rights and liabilities that are protected under a title transfer financial collateral arrangement, a set-off arrangement, a netting arrangement or a reinsurance agreement between the undertaking under resolution and another person and the modification or termination of rights and liabilities that are protected under such a title transfer financial collateral arrangement, a set-off arrangement, a netting arrangement or a reinsurance agreement through the use of ancillary powers.
For the purposes of the first subparagraph, rights and liabilities are to be treated as protected under a title transfer financial collateral arrangement, a set-off arrangement, a netting arrangement or a reinsurance agreement where the parties to the arrangement or agreement are entitled to set-off or net those rights and liabilities.