UK monetary regulators to start overseeing Critical Third Parties introduced by HM Treasury

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The Bank of England (the Bank), the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) will begin overseeing the primary Critical Third Parties (CTPs) on Monday 13 July 2026, following designation by HM Treasury (HMT). 

Critical Third Parties (CTPs) are expertise and different service suppliers whose companies underpin the UK monetary system. Today HMT has introduced its first designations of 4 world cloud companies and expertise suppliers: Amazon Web Services EMEA SARL, Google Cloud EMEA Limited, Microsoft Ireland Operations Ltd, and Oracle Corporation UK Limited. As many companies depend on these companies, disruption or failure may have an effect on a number of companies or markets on the similar time, doubtlessly impacting UK monetary stability and companies utilized by thousands and thousands of shoppers and companies. 

For the primary time, the three regulators will collectively oversee these CTPs below a brand new, proportionate regime, targeted on the resilience of the important companies they supply to the UK monetary sector. The regulators will work along with the CTPs to deal with system‑degree dangers and scale back the chance of disruption to the companies they supply spreading throughout the UK monetary system. This will strengthen system-wide resilience and enhance coordination and knowledge sharing throughout the UK monetary sector. CTPs should determine and handle dangers to their important companies successfully, and preserve open, well timed communication with regulators and the companies that depend on them, significantly throughout main incidents. 

Together, these modifications help a extra resilient atmosphere for companies to function in, which can, in flip help monetary stability and confidence in UK monetary markets. 

This regime enhances, however doesn’t substitute, present outsourcing and operational resilience guidelines for regulated companies who stay liable for managing their very own third-party preparations together with due diligence, threat administration and contingency planning. 

Sarah Breeden, Deputy Governor for Financial Stability on the Bank of England, stated: 

“As critical third parties become increasingly embedded in the operations of financial institutions, they can introduce new forms of systemic risk. Our proportionate approach to overseeing these providers will ensure that these dependencies are managed in a way that safeguards financial stability.”  

Katharine Braddick, Deputy Governor for Prudential Regulation and CEO of the PRA, stated: 

“By bringing critical third parties into the scope of oversight, we are ensuring that the infrastructure underpinning UK financial services is robust enough to support UK financial stability and confidence. This directly supports the PRA’s objective to promote the safety and soundness of regulated firms.” 

Nikhil Rathi, Chief Executive on the FCA, stated:  

“Critical third parties provide essential services which support innovation and growth. At the same time, when the same providers serve thousands of firms, a single failure can reverberate across the financial system. Operationalising this regime strengthens our ability to tackle those risks and improve overall resilience, ensuring the UK remains a safe and attractive place to do business.” 

HMT is liable for deciding which third social gathering suppliers are designated as CTPs, and any future designations or de-designations. 

The regulators will periodically assessment whether or not CTPs proceed to satisfy the designation standards, making suggestions to HMT, and consider the effectiveness of the oversight method. The Bank, PRA and FCA will proceed to work carefully with HMT, the monetary companies trade and designated CTPs because the regime is carried out, whereas supporting innovation, and UK progress and competitiveness.  

Notes to editors