UK – The supervisory authorities have set out measures to increase financial sector resilience
On 21 July 2022, the Bank of England, Prudential Regulation Authority and FCA have set out potential measures to oversee and strengthen the resilience of services provided by critical third parties (CTPs) to the UK financial sector.
The discussion paper sets out potential measures for how the supervisory authorities could use their proposed powers, which include:
A framework for identifying potential CTPs, which would inform the supervisory authorities’ recommendations for formal designation by HM Treasury.
Minimum resilience standards, which would apply to the services that designated CTPs provide to firms and FMIs.
A framework for testing the resilience of material services that CTPs provide to firms and FMIs using a range of tools, including but not limited to scenario testing, participation in sector-wide exercises, cyber resilience testing, and skilled persons reviews of CTPs.
These measures would complement, not replace, firms and FMIs’ existing responsibilities to manage risks from contracts with third parties. The supervisory authorities would only oversee the systemic risks arising from the services CTPs provide to firms and FMIs.