On 12 July 2023 the Financial Markets Conduct Authority released a consultation paper on “Proposed standard condition on business continuity and technology systems”. The consultation paper can be accessed here.
The FMA’s proposal is to continue its rollout of an existing standard to market service businesses in the financial services sector, including peer-to-peer lending providers and crowdfunding service providers. The standard already applies to providers of a financial advice service and a similar standard condition will also apply to licensed financial institutions. Submissions are due by 1 September.
The standard condition will require these businesses to:
- have and maintain business continuity plans;
- ensure the operational resilience of its technology systems that are necessary to provide its market service; and
- notify the FMA within 72 hours of an event that material impacts the operational resilience of critical technology systems.
The proposed condition recognises the importance of market service providers in the financial services sector and that they should have in place systems and processes that ensure their services can be relied upon by their customers. The FMA anticipates the condition being in place within a short timeframe after it is finalized and published, as affected businesses should already have these things in place.
The FMA’s approach in this area recognizes the importance for all businesses to have resilience in their critical technology systems and a plan as to how they would respond to, and recover from, a disrupting event. Business continuity plans should also be reviewed and tested regularly, so now might be a good time to undertake that exercise if you have not done so this year.
Please get in touch with our corporate team if you would like us to review any key technology contracts for potential business continuity risk.
