HM Treasury has published its intentions to oversee Critical Third Parties.
Under this proposal, HM Treasury will, in consultation with the financial regulators and other bodies, be able to designate certain third parties which provide services to firms as ‘critical’. The financial regulators will then be able to make rules, gather information, and take enforcement action, in respect of certain services that critical third parties provide to firms of particular relevance to the regulators’ objectives"
Firms are required to ensure their contractual arrangements with third parties allow them to comply with the regulators' operational resilience framework, which includes requirements in areas such as data security, business continuity and exit planning.
The proposed regime will fill this gap in the regulators’ powers, by allowing them to directly oversee services that critical third parties provide to firms. This will enable the regulators to ensure that services critical third parties provide to firms in the finance sector are resilient, thereby reducing the risk of systemic disruption.
The government intends to legislate for this regime "when parliamentary time allows".
Read more about the Critical Third-Party Regime here>
FourthLine is working with a number of financial service firms to help them with Operational Resilience enablement and Outsourcing and 3rd-Party Risk Management (OTPRM), through a mixture of end-to-end consulting and resourcing options.
Download our new OTPRM Technical Paper here now>
To read our new Operational Resilience Technical paper, click here>