Laura WilesAt the House of Commons Treasury Committee meeting, Economic Secretary Lucy Rigby confirmed that critical third parties will be designated by this time next year – although this was couched with caveats that the financial regulators need to make recommendations before the Treasury process can start. This confirmation is the first time that the UK government has provided a date for when it anticipates publicly naming companies which will be subject to the regime.
During the meeting, MPs criticised the Treasury for delays in deciding which third parties – particularly cloud service providers – would require extra oversight by the financial regulators and therefore become designated.
The critical third parties regime has been in force since 1 January 2025. James Fairburn, deputy director of financial stability strategy at the Treasury indicated that it would likely take around 6 months to decide which companies to designate once the financial regulators have provided a list of critical third parties.
Much of the criticism concerned last month’s Amazon cloud business outage, which the company blamed on faults at its data centre hub in northern Virginia. The incident restricted access to some banking websites and apps, including Lloyds Banking Group’s online services, London Stock Exchange Group’s data services and the HMRC website. The Committee pressed the Treasury officials on why the process was taking so long, given that a number of providers had already said they expected to be designated.
The session also quizzed Lucy Rigby over:
- the Government’s plans to encourage consumers away from cash savings and into investments;
- safe use of AI in the financial sector;
- the financial inclusion strategy; and
- the FCA taking on AML supervision of professional firms.
She said there would be a Financial Services Bill, which would have “an awful lot” in it.