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PRA consultation – building operational resilience – CP 29-19 and others

PRA consultation – building operational resilience – CP 29/19 and others

Background

  • CP 29/19: Operational resilience: impact tolerances for important business services
  • CP30/19: Outsourcing and third party risk management
  • On 5 December 2019, the Bank of England (the Bank), Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) published a shared policy summary and co-ordinated consultation papers (CPs) on new requirements to strengthen operational resilience in the financial services sector.
  • These regulatory expectations include central counterparties, central securities depositories, payment system operators and specified service providers.
  • These Consultation Papers and related briefing papers are relevant to all financial services firms; impact and actions will vary by firm. Firms and Financial Market Infrastructures (FMIs) are expected to take full proactive ownership of their operational resilience.

Impacts

Under the proposals, firms and FMIs would be expected to:

  • identify their important business services that if disrupted could cause harm to consumers or market integrity, threaten the viability of firms or cause instability in the financial system;
  • set impact tolerances for each important business service, which quantify the maximum tolerable level of disruption they would tolerate;
  • identify and document the people, processes, technology, facilities and information that support their important business services; and
  • take actions to be able to remain within their impact tolerances through a range of severe but plausible disruption scenarios.

Timeline with relevant dates to be logged on regulatory calendar

  • PRA Consultation opens on 5 December 2019
  • PRA Consultation closes on 3 April 2020

Next steps

Any respondents need to send comments to the PRA.

Subject to the feedback received, the PRA will work to develop final Operational Resilience Parts for publication in the second half of 2020. The PRA will continue to collaborate with the FCA and the Bank to develop an approach for regulated firms and Financial Market Infrastructures (FMIs) that is aligned as far as practicable.

The proposed implementation date for the proposals in the CP is the second half of 2021.

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