Operational Resilience Act (ORA): Also referred to as PS21/3
Operational Resilience Act (ORA), introduced by the United Kingdom, focuses on enhancing the financial services sector’s operational resilience. Effective from 31 March 2022 but no later than 31 March 2025, this policy outlines several key operational resilience requirements for banks, building societies, and designated investment firms within the UK.
Here are the main components of the Operational Resilience Act PS21/3:
Important business services identification:
Firms must identify critical services that, if disrupted, could significantly harm consumers or the market’s integrity. By understanding their impact tolerance against service disruptions and ensuring the continuity of critical services.
Impact tolerance setting:
Establishing clear thresholds for the maximum tolerable disruption ensures firms can assess their resilience capabilities effectively. It will help firms understand their risk tolerance, thereby enhancing their preparedness for potential service disruptions.
Mapping and testing:
By 31st March 2025, firms are expected to have completed comprehensive mapping and scenario testing to stay within their defined impact tolerances for each critical business service. This reinforces their commitment to operational resilience.
Learning scenarios utilisation:
Organisations must employ learning scenarios to test their resilience against the set impact tolerances, ensuring a proactive approach to operational disruptions. This enhances operational resilience through practical, scenario-based learning.
The Financial Conduct Authority (FCA) plays a critical role in overseeing the implementation of operational resilience in the financial services sector. Through authorisations, enforcement actions, and supervision, the FCA aims to enhance market integrity, foster competition, and protect consumers. Its guidelines for operational resilience, developed in collaboration with the Bank of England and the Prudential Regulation Authority, highlight the importance of firms being able to prevent, adapt, respond to, recover from, and learn from operational disruptions, laying out principles for operational resilience.
Read more on the FCA website