On 29 March 2021, the Bank of England (BoE) published a number of documents designed to improve the operational resilience of financial market infrastructures (FMIs). Specifically, the BoE published:
- A covering document – Operational Resilience: Impact tolerances for important business service.
- Individual Policy Statements and Supervisory Statements on the BoE’s operational resilience expectations for central counterparties (CCPs) and central securities depositories (CSDs).
- A Policy Statement, Supervisory Statement and operational resilience chapter of the Code of Practice for Recognised Payment System Operators and Specified Service Providers.
In terms of the covering document the BoE states that whilst the final policy is not overly prescriptive in terms of defining lists of important business services and setting specific impact tolerances, it is expected that best practice will emerge over time. Firms and FMIs are encouraged to view the policy as a proportionate minimum standard and develop their approach based on this standard.
In terms of the Supervisory Statement for CCPs, the policy takes effect from 31 March 2022, where CCPs are expected to identify important business services; set impact tolerances; and regularly test their ability to meet tolerances with due regard to the mapping of dependencies. Within a reasonable time after 31 March 2022, and in any event no later than 31 March 2025, CCPs are expected to take all reasonable action to ensure they remain within their impact tolerances in the event of extreme but plausible disruption to operations. CCPs must not wait until 31 March 2025 to take action to ensure they remain within impact tolerance.
A similar statement is made in the Supervisory Statement for CSDs.