The Investment Association is pleased to invite you to its second Operational Resilience Forum on 19 November, this year in a virtual format.
Please see here for more details and how to register.
The term ‘operational resilience’ encompasses what used to be called ‘business continuity’ or ‘operational risk management’. This initiative comes from the UK regulators, keen to bring various strands of similar work together. An initiative that has the end consumer of business services in mind, and assumes that disruption will happen.
The fall-out of the coronavirus pandemic has had resounding effects not just in human and medical terms but has proved a test of firms’ operational resilience. The IA are supporting members during this time by obtaining their views and experiences via bilateral conversations and weekly calls with Committee members, and using this to inform conversations with regulators and policymakers. For more information on how the IA can support members please see our COVID-19 expert page.
It should be noted that the Operational Resilience Consultation Paper (CP 19/32) deadline was extended until 1 October in light of current events and that the IA have now submitted the industry response.
In July 2018, each of the regulators of the wider financial services industry published a discussion paper, which aimed to
This was the first time that all three regulators (Bank of England (BoE), Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA)) had published a joint discussion paper. The paper highlighted how important they felt the issue was, both to the financial system and the UK economy as a whole.
The paper sets out the regulators' view that continuity of business services is essential to operational resilience. The paper also introduced the concept of 'impact tolerance statements' and asked for views on how best they could build on existing requirements to ensure statements continue to be effective, as the market and technology develops.
Naturally, firms will need to make large cost and time investments to take this work forward, but ultimately, there will be significant benefits. If firms embrace, rather than simply see it as a regulatory obligation, there should be many long-term advantages - for example, more stable and reliable operating platforms, clearly defined and tested workarounds when disruption occurs, and better consumer outcomes.
Firms operating in other jurisdictions as well as the UK, or globally, could replicate the principles outlined by the UK regulators, or apply them elsewhere. Therefore, there is an opportunity for UK firms to take the lead in developing internal frameworks.
Cyber resilience is an important, and currently more developed, aspect of operational resilience as a whole, and you can find out more on the IA's work on this subject in the member area.
LATEST DEVELOPMENTS (most recent first)
The IA submitted our response to the FCA's consultation. Due to COVID-19, a policy statement is now expected in Q1 2021 followed by at least a 12-month implementation period
The IA response to the Consultation Paper
We submitted a response to the consultation paper in September 2020. As well as responding to the specific questions raised in the paper, we emphasised:
We have compiled a series of blog posts:
Operational resilience through the COVID-19 lens - launching our updated Important Business Services guidance.
Remotely Busy - Operational Resilience During COVID-19 looking at some of the key resiliency themes experienced by members during this health emergency.
The joint regulators issued a discussion paper in July 2018. In summary, the regulators believe that firms can achieve better operational resilience by focusing more on setting, monitoring and testing specific impact tolerances for key business services. These define how much disruption can be tolerated. Important concepts in the paper include:
For full details of the IA's work plan on operational resilience and how the IA is supporting its members through the implementation of regulations in this important topic, click the 'go' button below to visit the members area.