FCA, 2025
27%
of incidents reported to the FCA in 2025 came from a third party
The FCA's operational resilience regime, in plain English.
What PS21/3 and SYSC 15A ask of firms, the four stages of the work, what you must keep doing now the transition period has ended, and what is changing next with incident and third-party reporting.
FCA operational resilience is what the Financial Conduct Authority expects of firms under its policy statement PS21/3, Building Operational Resilience, and the SYSC 15A rules in the FCA Handbook. It asks firms to identify their important business services, set an impact tolerance for each, map what those services depend on, test that they can stay within tolerance under severe but plausible disruption, and record it all in a self-assessment.
The rules came into force on 31 March 2022. The transitional period ended on 31 March 2025, so firms must now operate their important business services within impact tolerances and keep reviewing, testing and self-assessing on an ongoing basis.
Read the rules themselves: the FCA's operational resilience page, PS21/3 and SYSC 15A in the FCA Handbook. This page explains what they mean and how to meet them.
Because disruption to a financial firm's services can harm consumers and the integrity of the market, and the FCA expects firms to keep that harm within set limits. Data breaches, supplier failures, cyber incidents, extreme weather and system outages all interrupt the services firms provide. Operational resilience is the discipline of knowing which services matter most, how much disruption each can absorb, and being able to keep going when something breaks.
Third parties are a growing share of the problem. In 2025, 27% of incidents firms reported to the FCA were attributed to a third party issue (FCA and PRA, July 2026), and over 40% of cyber incidents reported to the FCA involved a third party (FCA, March 2026).
FCA, 2025
27%
of incidents reported to the FCA in 2025 came from a third party
FCA, 2025
40%+
of cyber incidents reported to the FCA in 2025 involved a third party
NCSC, 2025
204
nationally significant cyber incidents in the year to August 2025, up from 89
Disruption is increasingly driven by third parties and cyber, and the reporting bar is rising.
PS21/3 applies to a defined set of UK financial firms:
Dual-regulated firms follow the PRA too. Banks, building societies, PRA-designated investment firms and Solvency II insurers also meet the Prudential Regulation Authority's rules: the Operational Resilience Part of the PRA Rulebook and supervisory statement SS1/21, Operational resilience: impact tolerances for important business services. The FCA, the PRA and the Bank of England published their policies together in March 2021, and both sets of rules came into force on 31 March 2022, so the four stages below are the same.
Its objectives are to strengthen firms' ability to prevent, adapt to, respond to, recover and learn from disruption, and to minimise harm to consumers and risk to market integrity.
Start by identifying the important business services that, if disrupted, could harm consumers or market integrity, threaten the firm's viability, or cause instability in the financial system. For each one, break it into the critical processes behind it and map the people, processes, technology, facilities and information those processes depend on.
Review the list at least once a year, and sooner after a material change to the business or the market (SYSC 15A.2.2R).
For each important business service, set an impact tolerance: the maximum level of disruption you can accept before the harm becomes intolerable. This is the line between an inconvenience and intolerable harm.
Review each tolerance on the same cycle: at least once a year, or sooner after a material change (SYSC 15A.2.6R).
Test your ability to stay within impact tolerances using severe but plausible scenarios. Include failures within your control, such as an IT system outage, and outside it, such as a cyber attack or a loss of power. The question each test answers: how would this event hit your most important services, and what happens next?
After every test, and after any real disruption, run a lessons learned exercise to find the weaknesses and act on them (SYSC 15A.5.8R).
Develop and maintain the monitoring, analysis and reporting that shows how you manage operational risk, and the escalation process for incidents. SYSC 15A.6.1R asks for a written self-assessment that records:
Your governing body approves the self-assessment and reviews it regularly (SYSC 15A.7.1R). Keep an internal and external communication strategy ready to reduce harm when disruption happens (SYSC 15A.8.1R).
March 2021. The FCA publishes PS21/3, alongside the PRA's SS1/21 and the Bank of England's policy.
31 March 2022. The rules and guidance came into force. Firms had to have identified their important business services, set impact tolerances, and begun mapping and testing.
31 March 2025. The three-year transitional period ended. From this point firms must be able to remain within their impact tolerances for every important business service.
18 March 2026. The FCA publishes PS26/2 on operational incident and third party reporting.
Now. Operational resilience is business as usual: firms stay within their impact tolerances and keep the four stages current.
18 March 2027. The PS26/2 incident and third-party reporting rules apply.
On 27 March 2026, a year after the transitional period ended, the FCA published what it found in firms' self-assessments (Operational resilience: insights and observations, one year on). It saw good practice, including clear methods and rationale for choosing important business services and setting impact tolerances. It also named five areas to improve:
If you are reviewing your own self-assessment this year, these five areas are the place to start.
Operational resilience keeps evolving. On 18 March 2026 the FCA published new requirements for operational incident reporting and third-party notification (Policy Statement PS26/2). They apply from 18 March 2027, so firms have until then to prepare. They form a single regime shared by the FCA, the PRA and the Bank of England.
PS26/2 sits alongside PS21/3, extending the picture from staying within impact tolerances to how firms report incidents when they happen and manage the third parties their important business services depend on. For what the FCA wants firms to show on third parties today, read third-party resilience under PS21/3. The mapping and service register you build for PS21/3 is the same foundation you will lean on for it.
PS21/3 is one regime, and operational resilience is wider than any single regime. It spans cyber threats, third-party resilience and climate resilience, and it connects to how a firm manages risk, controls and regulatory change.
RunReady, the operational resilience module of Drova's RunGood platform, maps important business services and their dependencies, runs scenario testing against impact tolerances and keeps the evidence ready for the board and the FCA. See how RunReady supports PS21/3.
To stay within your impact tolerances for every important business service, on an ongoing basis. Review your important business services and impact tolerances at least once a year, or sooner after a material change. Keep testing against severe but plausible scenarios, run a lessons learned exercise after every test and real disruption, and keep a written self-assessment that your governing body approves and reviews. The FCA's insights and observations from March 2026 show where firms most often fall short.
PS21/3, Building operational resilience, is the FCA policy statement published in March 2021 that introduced the operational resilience rules in SYSC 15A of the FCA Handbook. The rules came into force on 31 March 2022 and the transitional period ended on 31 March 2025.
No. The rules came into force on 31 March 2022 and the transitional period ended on 31 March 2025. Firms must now operate their important business services within impact tolerances on an ongoing basis. The next date to plan for is 18 March 2027, when the PS26/2 incident and third-party reporting rules apply.
SYSC 15A is the section of the FCA Handbook that sets the operational resilience rules introduced by PS21/3. Read SYSC 15A. Why plans fall short under scrutiny: SYSC 15A and the credibility gap.
A service a firm provides to an external client whose disruption could cause intolerable harm to consumers or threaten market integrity, the firm's viability, or financial stability. Identifying these is Stage 1. Important business services, explained.
The maximum level of disruption to an important business service a firm can tolerate, usually expressed as a maximum duration, before the harm becomes intolerable. Impact tolerance, explained.
The FCA's policy statement on operational incident and third party reporting, published 18 March 2026 and applying from 18 March 2027. It is a single regime shared with the PRA and the Bank of England: one standardised incident report whichever regulator it is for, and an annual register of material third party arrangements.
A separate regime for third parties whose services are systemic to the UK financial sector. HM Treasury designates critical third parties on the regulators' recommendation, and the FCA, PRA and Bank of England rules for them apply from 1 January 2025 (PS24/16). It does not change a firm's own responsibility for its operational resilience and its third-party suppliers.
Under SYSC 15A.6.1R: your important business services and why you chose them, each impact tolerance and why, how you mapped each service, your testing plan and scenario tests, the lessons learned and vulnerabilities found with the action you are taking, your communication strategy, and the methods you used. Your governing body approves it and reviews it regularly.
The PRA's supervisory statement on operational resilience: impact tolerances for important business services. It applies to UK banks, building societies, PRA-designated investment firms and Solvency II insurers, sits alongside the Operational Resilience Part of the PRA Rulebook, and was published with PS21/3 in March 2021. Read SS1/21.
No. SYSC 15A does not mention ISO 22301 or any certification. An ISO 22301 management system is a useful base for continuity, but PS21/3 asks for its own evidence: important business services, impact tolerances, mapping, testing and the self-assessment. ISO 22301, explained.
Both are operational resilience regimes built on critical or important services and tolerances. PS21/3 is the UK FCA regime; CPS 230 is the Australian APRA regime. CPS 230, explained.
Every stage of the work in one PDF, to share with your board or risk committee.
Operational resilience
Operational resilience explained
What operational resilience is, and how regulators define it.
Important business services
Decide which services the rules apply to, and map them.
Impact tolerance
Set the limit a service must not cross.
Scenario testing
Test against severe but plausible disruption.
Operational resilience in financial services
What regulators expect across financial services.
ISO 22301 explained
The international continuity standard.
APRA CPS 230
What CPS 230 asks of Australian entities.