Prudential Regulation Authority Rulebook

1.1

This Prudential Regulation Authority (PRA) Supervisory Statement (SS) sets out the PRA’s expectations for firms to ensure the operational continuity of critical services to facilitate recovery actions, resolution, and related restructuring. It supersedes SS9/16 ‘Ensuring operational continuity in resolution’.

1.2

This SS is relevant to UK banks, building societies, and PRA-authorised investment firms (firms) to which the Operational Continuity Part of the PRA Rulebook applies.

1.3

Operational continuity of critical services during recovery, resolution, and related restructuring is supported by other parts of the microprudential regulatory framework. Alongside the Operational Continuity Part, the PRA expects that:

• firms will meet the PRA’s Fundamental Rules (in particular Rules 2–6 and 8) and the General Organisational Requirements Part of the PRA Rulebook (in particular Rule 2.5) when implementing arrangements to comply with the Operational Continuity Part and this SS;
• as set out in the Outsourcing Part of the PRA Rulebook and other regulatory requirements and expectations on outsourcing and third-party risk management, firms remain responsible when functions are outsourced to a third party. In addition, as set out in SS2/21 ‘Outsourcing and third party risk management’, firms should have appropriate governance and internal controls to identify, manage, and report risks resulting from all arrangements with third parties;^[1]
• the operational resilience of critical service provision should not be undermined by restructuring related to recovery or resolution. The PRA Fundamental Rules remain relevant to decision making during operational disruptions.² In addition, the PRA expects that, under the Operational Resilience Part of the PRA Rulebook and SS1/21 ‘Operational resilience: Impact tolerances for important business services’, firms should ensure they maintain operational resilience before, during, and after resolution.^[3] This expectation applies where critical services are also important business services under the PRA’s operational resiliency policy; and
• ring-fenced bodies (RFBs) should have regard to the Ring-fenced Bodies Part of the PRA Rulebook when implementing arrangements to comply with the Operational Continuity Part and this SS.^[4]

1.4

The PRA expects that when implementing the expectations in this SS, firms will have regard to the Bank of England’s (the Bank) policies on resolvability. In particular, these include:

• Statement of Policy: The Bank of England’s Approach to Assessing Resolvability (Bank RAF SoP);
• The Bank of England’s Statement of Policy on Continuity of Access to Financial Market Infrastructure (FMIs);
• The Bank of England’s Statement of Policy on Funding in Resolution;
• The Bank of England’s Statement of Policy on Management, Governance and Communication; and
• The Bank of England’s Statement of Policy on Restructuring Planning.^[5]