UK’s Financial Services Authority Business Continuity Policy “Proportionate And Non-Prescriptive”

The Financial Services Authority today published a policy statement on operational risk confirming that it will maintain its non-prescriptive approach to business continuity arrangements by financial firms. Clive Briault, Director of Prudential Standards at the FSA, said:

“Interest in our proposals on systems and controls for managing operational risks has been high and we are grateful for the responses we received to Consultation Paper 142 from firms, trade associations, consultants and other organisations. The majority of these have confirmed that our overall approach is appropriate with regard to operational risk which covers areas such as business continuity, management of employees, information security, outsourcing and the use of insurance to finance operational risk. And we will later this year issue the final Handbook draft of our operational risk systems and control policy – along with our new policies on systems and controls for other types of risk.”

“In particular, we are pleased that responses to Consultation Paper 142 showed strong agreement that our guidance on business continuity covers the right areas and to the correct level of detail. We will therefore keep to our existing approach and not offer further guidance which would prove too prescriptive for most firms. We will apply our guidance in a proportionate way. Our policy on business continuity is designed to be flexible and to be interpreted in accordance with the nature, scale and complexity of a firm’s activities.”