The Bank of England, PRA and FCA have published a new shared policy summary and co-ordinated consultation papers (CPs) on new requirements to bolster operational resilience in the financial services sector.
The three supervisory authorities have indicated that building the operational resilience of firms and Financial Market Infrastructures (FMIs) is a shared priority – and the co-ordinated CPs will build on the concepts set out in the operational resilience Discussion Paper they published last year, which addressed several proposed policy changes based on responses received.
The new policy proposals have made it clear that firms and FMIs are expected to take ownership of their operational resilience, and that they will need to prioritise plans and investment choices based on their impacts on the public interest.
FCA chief executive, Andrew Bailey, commented: “It is in the public interest that a resilient financial system is able to supply the most important services with minimal interruption even during severe operational events. The proposed new requirements are aimed at achieving this outcome.
“Disruptive events can have a high impact on consumers and businesses so firms and FMIs need to know where the risks to their service delivery lie and to make sure that they are prepared for any service disruption by testing their planned response.”
If disruption occurs, the regulators have said firms are expected to communicate clearly, for example providing customers with advice about alternative means of accessing the service.
The three authorities have also revealed that the consultation period will close on 3 April 2020.
PRA CEO and deputy governor for prudential regulation, Sam Woods, added: “Operational resilience is a vital part of firms’ safety and soundness, and has become an important priority for the PRA.
“This consultation marks the next stage of integrating operational resilience into our regulatory framework. Alongside this, our proposals on outsourcing and the cloud will steer firms to be resilient in their adoption of new technologies.”
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