On 25 November 2021, the PRA published Consultation Paper 21/21: Operational Resilience and Operational Continuity in Resolution: CRR firms, Solvency II firms, and Financial Holding Companies (for Operational Resilience) (CP21/21).
In this consultation paper, the PRA outlines new proposals to apply to the group provisions in the Operational Resilience Part of the PRA Rulebook, which will be relevant to different types of firms as follows:
- Capital Requirements Regulation (CRR) firms
- Holding companies
- Mixed financial holding companies
- UK banks
- Building societies
For financial and mixed activity holding companies, the PRA proposed to apply new enforcements concerning Group Arrangements, as to take more action from ‘a group-level view’ of operational resilience.
This would ensure that the risks of the whole group, including those parts that are not subject to individual requirements, will be taken into account.
The PRA highlighted that applying new obligations directly on the holding companies, rather than on individual firms within their groups, would be more proportionate and would align the Operational Resilience Part with the PRA’s approach to consolidated prudential requirements.
This proposal would advance the PRA`s statutory objectives by addressing possible risks to safety and soundness, and to financial stability.
The deadline for responses to CP21/21 is 14 January 2022.
How FourthLine can help:
FourthLine is working with several clients to help them achieve compliance and react to the challenges of the new operational resilience regulation, through a mixture of consulting and resourcing services.
You can get in touch here to find out more about our tailored and proportionate responses to Operational Resilience compliance.
For further insights on Operational Resilience, go to our Operational Resilience micro-site.