This short briefing is relevant to audit leaders in the financial services sector and those wishing to broaden their knowledge of the sector.
The Operational Continuity Instrument 2016/27 came into force on 1 January 2019 as part of the UK Prudential Regulatory Authority (PRA) rulebook.
We look at who this applies to, explain what it means, outline what is required and consider the role of internal auditors.
Who does this apply to?
The following is an extract from the PRA rulebook.
a Capital Requirement Regulation (CRR) firm (UK bank, a building society or a UK designated investment firm) that receives critical services if it fulfils any of the following conditions on 1 January of any year:
(1) the average of the firm’s total assets it was required to report in the previous 36 months in accordance with Chapters 7 and 9 of the Regulatory Reporting Part of the PRA Rulebook exceeds £10bn;
(2) the average of the firm’s safe custody assets it was required to report in the previous 36 months in accordance with SUP 16.14 of the FCA Handbook as amended from time to time exceeds £10bn; or
(3) the average total amount of received sight deposits it was required to report in the previous 36 months in accordance with the ITS on supervisory reporting, or that it would have had to report if the ITS on supervisory reporting had been in force, exceeds £350m.
The PRA defines critical services as “activities, functions or services performed for one or more business units of the firm or for the firm and another member of its group, whether by the firm itself, any other group member or a person outside the firm’s group, the failure of which would lead to the collapse of or present a serious impediment to the…