meta_id 2979509

In March 2026, the Financial Conduct Authority (FCA) published finalised guidance (FG26/4) setting out expectations for how firms should comply with requirements for material third party arrangements. The guidance applies to enhanced scope Senior Managers and Certification Regime (SMCR) firms, banks, designated investment firms, building societies, Solvency II firms, CASS large firms, UK Recognised Investment Exchanges (RIEs), authorised electronic money institutions, authorised payment institutions, and consolidated tape providers. The FCA expanded the scope of third party notifications to cover both material outsourcing and material non-outsourcing arrangements, collectively referred to as "material third party arrangements." This reflects the increasing importance of non-outsourcing third party arrangements that help deliver and support firms' activities, services and processes. A material third party arrangement is defined as one where disruption or failure could cause intolerable harm to clients, pose risks to UK financial system soundness, stability, resilience, confidence or integrity, or cast serious doubt on a firm's ability to satisfy threshold conditions or meet regulatory obligations. The guidance provides factors firms should consider when assessing materiality, including direct connection to regulated activities, business complexity, impact on business continuity and operational resilience, ability to substitute providers, and data protection obligations. Examples of typically material arrangements include data centre services, cloud hosting, cybersecurity services, and payment settlement services. Firms must notify the FCA of new material third party arrangements or significant changes at an early stage, before becoming contractually committed. Additionally, firms must maintain and submit an annual register of material third party arrangements. The FCA, Prudential Regulation Authority (PRA), and Bank of England use a single standardised notification and register template, submitted through FCA Connect. Firms have 90 calendar days to submit annual registers when the submission window opens, with data reflecting positions as of 31 December of the previous year.