UK Regulators Launch Oversight Regime for Critical Third Parties in Financial Services

The Bank of England, PRA, and FCA have launched a new oversight regime for designated Critical Third Parties (CTPs) that provide services to UK financial firms. This initiative aims to enhance the resilience of the financial system by addressing system-level risks arising from the increasing reliance on a small number of common service providers. The regime will ensure CTPs identify and manage risks, improve resilience arrangements, and engage openly with regulators and firms, particularly during incidents.

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• Firms should continue to consider how they identify, test and manage dependencies on critical services.
• Designated CTPs should engage openly with regulators and firms, including through testing and information-sharing.