Emma RadmoreThe BoE has written to the CEOs of central counterparties, recognised payment system operators, specified service providers and central securities depositories and on its supervisory expectations in relation to material outsourcing to the public cloud.
The letters note that financial institutions have accelerated their plans to rely on cloud service providers (CSPs) and that, although the regulators have carried out significant work on operational resilience of regulated firms, there is still concern over the risks of increasing reliance on a small number of CSPs and other critical third parties for the provision of vital services.
The letters look at the risks and regulatory requirements around FMI providers reliance on third parties and reminds firms of their compliance and notification obligations – including an expectation that the BoE should be consulted, and would provide a non-objection notice, where there is a material risk change caused by outsourcings to the public cloud. BoE intends to consult in due course on its expectations and policies, with specific reference to the cloud.
