Prudential Regulation Authority Rulebook

3.1

Operational Continuity Chapter 2 requires firms to ensure their operational structure facilitates effective planning for, and taking action during, recovery, resolution, and related restructuring. The PRA expects firms, irrespective of their service provision model, to be able to demonstrate how their operational arrangements supporting critical services facilitate recovery and resolution. Firms should also have appropriate policies, processes, and procedures in place to be able to demonstrate how operational arrangements supporting critical services meet all other relevant expectations in this SS (see also paragraph 4.4) and the requirements in the Operational Continuity Part.

3.2

In the Bank RAF SoP, the Bank has provided a stylised timeline of how it anticipates a resolution may be conducted.^[12] Where relevant, the PRA expects firms to refer to this timeline when considering how their operational arrangements facilitate recovery and resolution.

3.3

If a firm cannot demonstrate how its operational arrangements facilitate recovery and resolution, the PRA expects the firm to make changes to achieve this outcome. Supervisory judgement will be required to assess this but, as a minimum, the PRA expects firms to be able to describe what would happen to critical services if recovery options were executed or if the Bank were to apply one or more of its stabilisation powers^[13]. This includes the examples listed below, where relevant:

• in cases where a firm has identified the disposal of business units or legal entities as part of its recovery strategy, how its operational arrangements support the execution of recovery options within a reasonable time;
• how their operational arrangements support operational continuity during a resolution. If the Bank (as resolution authority) has set a preferred resolution strategy of bail-in, operational arrangements should support operational continuity throughout resolution as described in the stylised timeline referred to in paragraph 3.2 above;
• how their operational arrangements facilitate related restructuring, within a reasonable time. For example, firms should be able to evidence how the arrangements facilitate separability and restructuring of group entities while ensuring continuity of critical services; and
• how their operational arrangements facilitate separability of a RFB and its sub-group from the other entities in the wider group.