Critical Third Parties (CTPs)

FMI critical third party service providers

Domestic statutory framework

The UK’s domestic statutory framework for CTPs is agreed by Parliament. The framework was introduced through FSMA 2023, which contains statutory measures, including a framework for HMT to designate CTPs and powers for the regulators to make rules for, gather information from, and take enforcement action against designated CTPs in connection with the services they provide to FMIs and regulated firms.

FMIs and other regulated firms increasingly rely upon certain third party service providers to deliver their services, some of which are critical to UK financial stability. Failure in or disruption to these third-parties’ services could act as a single-point-of-failure impacting multiple firms and FMIs simultaneously and, in some cases, UK financial stability.

The Financial Services and Markets Act 2023 (FSMA 2023) contains statutory measures, including a framework for HMT to designate CTPs and powers for the regulators to make rules for, gather information from, and take enforcement action against designated CTPs in connection with the services they provide to FMIs and regulated firms. 		  

Bank of England rules 

CTP Regime

The Bank has made rules that set the outcomes that the Bank expects from all FMIs, including CSDs, building on the detailed regulatory requirements that they are subject to.

In November 2024, the UK regulators (Bank of England, Prudential Regulation Authority and Financial Conduct Authority) published rules and related documents concerning a new Critical Third Party Regime. Key CTP regime links are listed on the right-hand side. 

Guidance

The Bank may publish guidance on the interpretation of more detailed regulatory requirements for FMIs.

The Bank has published a supervisory statement that sets out how a critical third party (CTP) should comply with the duties and obligations placed on it by or under FSMA 2023 including the requirements in the Bank’s rules. 
The Bank has published a supervisory statement that sets out its expectations on the reports by and the appointment of skilled persons to collect and update information and reports.   

Statements of Policy

The Bank may publish statements of policy that set outs how it will exercise its statutory powers relating to CTPs.

The Bank has published a Statement of Policy on its approach to the oversight of CTPs. 
The Bank has published a Statement of Policy on its approach to enforcement. 

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This page was last updated 26 June 2025