Investment platforms receive Operational Resilience 'Dear CEO' letter

On 26 July, the Financial Conduct Authority (FCA) sent a Dear CEO letter to Investment Platforms, setting out reminders of their expectations for Operational Resilience.

The FCA has warned investment platforms over their operational resilience as it prepares to intensify supervision of the firms.

In the letter, the FCA said several firms had experienced IT outages and severe operational issues due to a surge in trading activity.

The regulator warned firms must have contingency plans in place to deal with operational disruptions and ensure the plans have been tested.

The regulator will soon be asking for specific data about service disruptions on an ongoing basis, which will better enable it to identify outliers and take appropriate action, it said.

The FCA said: “These were clear examples of severe but plausible operational disruptions causing harm to consumers and negatively affecting market confidence.

“We expect firms to invest in their systems to ensure that they keep pace with the growth of their business and remain fit for purpose.

"IT upgrades and migrations should undergo thorough analysis and testing to reduce incidents and outages that cause harm to customers.”

The regulator also warned that they will focus on the senior manager when conducting regulatory visits.

This comes on the back of a Dear CEO letter issued in February 2020 in which the FCA set out its concerns, expectations and strategy for supervising platforms.

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Topics: Featured, Risk Management, Insurance, Professional Services, Flexible, SMCR, Learning, operational resilience, Third Party Risk Management

August 6, 2021
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Jakes de Kock
Written by Jakes de Kock