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What are important business services?

In Policy Statements PS21/3 and PS6/21, the FCA and PRA outline what constitutes an “important business service”, with some nuances in their respective definitions.

Important business services are those services a firm provides which, if disrupted, could:

  • pose a risk to a firm’s safety and soundness or, the financial stability of the UK (PRA objectives)
  • potentially cause intolerable harm* to the consumers of the firm’s services or risk to market integrity – i.e. soundness, stability or resilience of the UK financial system (FCA objectives)

The nuances in the definitions are primarily driven by the regulators’ respective statutory objectives and regulatory frameworks. As part of the Bank of England, the PRA also contributes to the delivery of the Bank’s wider financial stability and monetary policy objectives.

*Intolerable harm has to be much more severe than harm or inconvenience.  The FCA views intolerable harm as an outcome which end users cannot easily recover from, for instance where, post disruption, a firm is unable to put a client back into a correct financial position, or where there have been serious non-financial impacts that cannot be effectively remedied.

Have you read our responses behind other key questions?  You can view them by clicking on the links to the pages below: