Reporting material third party arrangements

New rules from 18 March 2027

In March 2026 we published final rules and guidance on third party reporting[2]. These rules will come into force on 18 March 2027.

What are material third party arrangements

Under our new rules, a third party arrangement will be material where it is so important that its disruption or failure could:

• Cause intolerable levels of harm to the firm’s clients
• Pose a risk to the soundness, stability, resilience, confidence or integrity of the UK financial system
• Cast serious doubt on the firm’s ability to satisfy the threshold conditions, or meet its obligations under the Principles, or under SYSC 15A (Operational resilience).

Our new rules cover a wider range of third party arrangements, whether they would be classed as 'outsourcing' or not. This reflects trends in the market as well as international best practice for regulators.

Who the new rules apply to

• Enhanced scope SMCR firms
• Banks
• Designated investment firms
• Building societies
• Solvency II firms
• CASS large firms
• UK Recognised Investment Exchanges (RIEs)
• Authorised electronic money institutions and authorised payment institutions
• Consolidated tape providers

Other firms should continue to meet their relevant existing obligations, for example, under Principle 11.

Overview of the rules

Firms increasingly rely on a range of third party services to deliver their services. Our new rules will expand the range of information that firms give us.

This will help us address risks at specific firms, identify shared risks in the sector, and provide thematic insight back to industry. It will also inform our joint work with the PRA and the Bank of England to identify potential critical third parties.

From 18 March 2027 firms must:

• Tell us when they are entering into a material third party arrangement, or significantly changing an existing one.
• Report annually to us by submitting a register of their material arrangements.

We have worked with the PRA and Bank of England to create a single regulatory regime. Firms will only be required to make a single submission to the FCA and the FCA will transfer the submission to the PRA and Bank of England where relevant.

Prepare for the rules

We are giving firms 12 months to prepare for the new requirements.

You should:

• Read Policy Statement PS26/2 and Finalised Guidance FG26/4[2].

If the new rules apply to your firm, you should: 

• Prepare now by starting to implement any changes you’ll need to make to your business.

If your firm is in scope to report your annual material third party arrangements register we will notify you when the submission window opens.

We expect this to be at the end of the 12-month implementation period. Firms will then have 90 calendar days to submit the register.

Alongside our Policy Statement, we have also published examples of reporting templates to help firms prepare:

• Material third party notifications template (xlsx)[3]
• Material third party register template (xlsx)[4]

Support for firms

As well as giving firms time to prepare, we will also offer firms the training they need to embed new frameworks confidently before March 2027.

Existing obligations to disclose outsourcing arrangements

Firms are required to provide us with information to enable us to monitor their compliance with regulatory obligations. 

Compliance with Principle 11[6] includes a firm disclosing to us anything relating to the firm which may have a serious regulatory impact (SUP 15.3.8[7]). This includes notification and reporting requirements on critical, important or material outsourcing (SYSC 8.1.12[8]) and (SYSC 13.9.2[9]).

You should notify us using our firm notification form (SUP 15)[10].

Firms should continue to meet their obligations under Principle 11 before the new rules go live on 18 March 2027. These obligations will continue to apply to firms outside the scope of our new regime after 18 March 2027.

Find out more about outsourcing[11].