The UK’s financial regulators* have signed a memorandum of understanding (MoU) with the European Supervisory Authorities to enhance cooperation and oversight of critical third parties that fall under the UK’s CTP regime and the EU DORA regulations.
The MoU establishes a framework to manage potential risks to financial stability and market confidence, as well as strengthen international cooperation. It will also help reduce duplication and regulatory burden on CTPs and CTPPs.
The MoU provides clear principles and procedures for cooperation, information sharing, and coordination of oversight activities between the relevant authorities.
The MoU aims to enhance third-party risk management and contribute to the overall operational resilience of the financial sector in the EU and UK through strong cross-border cooperation.
The MoU has been prepared in accordance with DORA Articles 36, 44, and 49, which cover the ESAs’ oversight powers, international cooperation, and financial cross-sector exercises, communication and cooperation.
The UK’s CTP regime complements similar international standards and is designed to be compatible with DORA.
* The Financial Conduct Authority, Bank of England, and Prudential Regulation Authority
Sources: ESMA and the Bank of England
