Prudential Regulation Authority Rulebook

5.1

In implementing Operational Continuity 3.1(2), firms should have the capability to ensure continuity of critical services during possible changes to service provision resulting from restructuring related to recovery or resolution.^[16] Firms should have the capability to ensure continuity irrespective of the scenarios that they may encounter during such a restructuring and should take different scenarios into account in planning for continuity.

5.2

The PRA expects firms to consider how their capabilities would be effective in practice. The ways firms could meet this expectation include, but are not limited to, maintaining a playbook or documented and tested procedures.

5.3

At a minimum, the PRA expects firms to be able to develop and implement transitional service agreements (TSAs), in a timely and prudent manner, during recovery, resolution, and related restructuring. TSAs support the continuity of a particular critical function or core business line by facilitating, without interruption, the transfer of the provision of relevant critical services to another provider, or the separation of a firm’s activities that are supported by critical services.

5.4

The exact design of a TSA cannot be determined in advance of resolution, as it will depend on the circumstances of the firm in resolution. Firms should have appropriate operational arrangements, and availability of relevant information, to support them in designing and implementing the TSAs as they become necessary in resolution. In order to do so, the PRA expects that, at a minimum, firms should maintain:

• information about interdependencies among firms and service providers (Chapter 4 of this SS);
• objective service level agreements (Chapter 8 of this SS);
• predictable and transparent charging structures (Chapter 9 of this SS); and
• management and governance arrangements (Chapter 12 of this SS).

5.5

The list in paragraph 5.4 is a minimum expectation. The PRA expects firms to consider whether further arrangements, in addition to the expectations listed in paragraph 5.4, may be necessary to maintain their ability to design and implement TSAs. The PRA expects that if a firm identifies any further arrangements necessary to meet the expectation in paragraph 5.4, it will put them in place in a timely manner.

5.6

Where one or more of a firm’s critical services involves services provided via a direct relationship with a Financial Market Infrastructure (FMI) and is in scope of the Bank’s SoP ‘Continuity of Access to Financial Market Infrastructures (FMIs)’, the PRA considers that firms may be able to leverage their contingency planning under that SoP to meet the expectations in this chapter with regard to those services.