On 14 April 2022, the Bank of England (BofE) published three consultation papers regarding Financial Market Infrastructures (FMI) outsourcing and third party risk management. The BofE proposals are set out in three draft supervisory statements, addressing
- Central Counterparties (here)
- Central Securities Depositories (here)
- Recognised Payment System Operators and Specified Service Providers (here)
These consultation papers are similar in content to the outsourcing and third party risk management supervisory statement, which became effective at the end of March 2022 and set out the Prudential Regulation Authority’s (PRA) expectations of how PRA-regulated firms should comply with outsourcing and third party risk management. They also further develop the operational resilience requirements for FMIs.
Industry reactions will become more apparent over the coming months, with the consultation process closes on 14 July 2022. We will continue to monitor developments.