UK Designates First Technology Providers Under The Critical Third Parties Regime

The Financial Services and Markets Act 2023 amended the Financial Services and Markets Act 2000 to create a new framework for overseeing third parties whose services are critical to the stability of the UK financial sector. The regime forms part of the UK government's wider programme to promote a resilient, stable and internationally competitive financial services sector.

Designation as a critical third party enables the financial regulators — the Bank of England, Prudential Regulation Authority and Financial Conduct Authority — to apply proportionate and targeted oversight to systemically important services, with a focus on managing risks to UK financial stability.

Regulations have now been made under section 312L of the Financial Services and Markets Act 2000 to designate specific third-party entities as critical third parties, where this is necessary to manage systemic risks arising from the services they provide to the UK financial sector.