UNITED KINGDOM · PRA SUPERVISORY STATEMENT SS2/21
SS2/21 sets supervisory expectations for outsourcing and third-party risk, with Chapter 10 covering business continuity and exit plans — including a credible stressed exit and the substitutability of material service providers. This guide explains the requirement, scope, timeline and evidence mapping for software escrow and Software Recoverability.
REGULATORY EVIDENCE MAP
UK PRA SS2/21
PERIMETER
United Kingdom
REQUIREMENT
Documented business continuity and exit plans for material outsourcing
CASTLER EVIDENCE
Castler proves a stressed exit works before you ever need it — the software is rebuilt without the vendor
OUTPUT
Signed Proof of Recovery
PRA SS2/21 — Chapter 10 business continuity and exit plans
In forceWho it applies to
The supervisory expectations have applied since the post-publication implementation period. Firms should keep material-provider exit plans current and test the assumptions on which they rely.
What the regulation requires
The Castler artefact that evidences it
Documented business continuity and exit plans for material outsourcing
Castler proves a stressed exit works before you ever need it — the software is rebuilt without the vendor
A credible 'stressed exit' from a failing or non-performing provider
Exit and continuity plans are backed by a signed, repeatable recovery procedure
Assessment of substitutability and concentration risk
Substitutability is demonstrated, not assumed
Evidence that important business services can be maintained through disruption
Each release ships with fresh evidence for your operational-resilience file
THE GLOBAL REGULATORY MANDATE
Across financial regulation, cyber-resilience rules and global assurance standards, the direction is converging: critical third-party software must remain current, testable and recoverable when its provider fails.
17
MANDATES
9
JURISDICTIONS
1 · WHAT THE REGULATION IS
PRA Supervisory Statement SS2/21 was published in March 2021 for outsourcing and third-party risk management. It operates alongside the UK operational-resilience framework and its impact-tolerance expectations.
SS2/21 sets supervisory expectations for outsourcing and third-party risk, with Chapter 10 covering business continuity and exit plans — including a credible stressed exit and the substitutability of material service providers. For a CIO, CISO or compliance officer, the practical issue is whether a critical third-party application can remain available when the provider fails, exits, is acquired or can no longer support the product.
Software escrow addresses custody: who holds the source code, build materials and documentation. Software Recoverability addresses the next question: whether those materials have been independently rebuilt, deployed and tested. The distinction matters because an agreement and a deposit do not prove that recovery can be completed within the institution’s operational tolerance.
Castler therefore treats the requirement as part of vendor onboarding. The agreement and first deposit are established when the relationship begins, every release is captured, and the verification evidence is renewed before an auditor, insurer or supervisor asks for it.
2 · EXACT REQUIREMENT
In summary
Firms should develop documented exit plans for material outsourcing arrangements, including stressed exit, and be able to demonstrate that disruption or provider failure will not prevent important services from remaining within approved tolerances.
Reference: PRA Supervisory Statement SS2/21 — Outsourcing and third-party risk management, Chapter 10. For legal interpretation and exact operative wording, use the current official text and advice applicable to your supervisory perimeter.
In practical terms, compliance requires more than a clause in the vendor contract. The institution must identify which applications are critical, establish custody or source-code access, ensure the deposited materials remain current, document release conditions and maintain evidence that continuity or exit can be executed.
Where the framework requires tested recovery, resilience or credible exit, a stored deposit is only the starting control. Independent build evidence, deployment instructions, architecture replication and a signed engineer review show that the recovery path has been exercised rather than assumed.
PRA-regulated banks and building societies
PRA-designated investment firms
Insurers and reinsurers within the PRA perimeter
UK branches of overseas banks and insurers within scope
The accountable group normally includes technology, information security, outsourcing, procurement, compliance, business continuity and the business owner of the supported service. Scope should be based on criticality, not only contract value.
In force
The supervisory expectations have applied since the post-publication implementation period. Firms should keep material-provider exit plans current and test the assumptions on which they rely.
Institutions should work backwards from the operative date. Vendor identification, agreement execution, repository integration, initial deposit, reconciliation and first verification all require lead time. Onboarding-first implementation avoids a deadline-driven retrofit.
5 · CONSEQUENCES
Weak exit evidence can result in supervisory findings, remediation programmes, restrictions on material outsourcing, and direct board challenge over whether important business services can remain within tolerance.
The operational consequence can be more severe than the supervisory consequence. If a critical provider fails and the deposited software cannot be built or deployed, the institution may breach customer commitments, impact tolerances, market obligations and board-approved continuity objectives while the technical team reconstructs undocumented knowledge under incident conditions.
A current custody record and signed Proof of Recovery reduce that uncertainty. They do not replace legal analysis, incident planning or the institution’s own controls; they create tested technical evidence that those controls rely on.
6 · CASTLER EVIDENCE MAPPING
The mapping is specific: each obligation is paired with the Castler artefact or operating control that provides relevant evidence. It is not a claim that software alone guarantees compliance.
| Regulatory requirement | Castler evidence |
|---|---|
| Documented business continuity and exit plans for material outsourcing | Castler proves a stressed exit works before you ever need it — the software is rebuilt without the vendor |
| A credible 'stressed exit' from a failing or non-performing provider | Exit and continuity plans are backed by a signed, repeatable recovery procedure |
| Assessment of substitutability and concentration risk | Substitutability is demonstrated, not assumed |
| Evidence that important business services can be maintained through disruption | Each release ships with fresh evidence for your operational-resilience file |
Cloud Custody
Establish the software escrow agreement, current deposit, release history and audit trail required as the custody foundation.
Explore custody →Software Recoverability
Add independent rebuild, deployment, replication, confidence scoring and an engineer-sealed Proof of Recovery.
Explore Proof of Recovery →7 · FREQUENTLY ASKED QUESTIONS
An agreement can satisfy the contractual custody element, but UK PRA SS2/21 also expects the institution to manage continuity, third-party risk or recovery evidence. The exact answer depends on the clause and supervisory perimeter.
The deposit should track the production release. Automated repository capture, version history and release identifiers make it possible to show that updates and fixes are included rather than relying on the original filing.
The vendor participates in onboarding, deposit setup and structured reconciliation where documentation is missing. Verification is then designed to run independently so the vendor does not need to be present every time.
Present the executed escrow arrangement, deposit and release history, build report, deployment runbook, replication report, SBOM, confidence score, exception record and signed Proof of Recovery for the release in scope.
Yes. Cloud Custody establishes the current deposit and agreement. The same record can be upgraded to Standard or Premium Software Recoverability without creating a new custody foundation.
Re-test when the vendor releases a material version and according to the institution’s criticality, regulatory and board-approved assurance cycle. Per-release verification avoids stale annual evidence.
8 · RELATED REGULATIONS
European Union
EU DORA
DORA requires financial entities to keep ICT third-party risk under control across the full lifecycle of a contract — including a documented exit strategy and assurance that a critical or important function can continue if a provider fails (Article 28).
Read the mappingUnited Kingdom
PRA OR
The UK operational-resilience framework requires firms to identify important business services, set impact tolerances, and remain within them through severe-but-plausible disruption — including disruption to third-party technology.
Read the mappingIndia
RBI §12(f)
RBI's directions on outsourcing of IT services require regulated entities to maintain robust exit strategies and business-continuity arrangements so critical operations survive a service provider's exit or failure.
Read the mappingThis guide is for regulatory orientation and does not constitute legal advice. Verify obligations against current official texts and professional advice for your entity.
CASTLER SRP EVIDENCE
PRA SS2/21 requires firms to document and test business continuity for material outsourcing arrangements. Castler SRP's signed Proof of Recovery is the independent test evidence that demonstrates a documented recovery path exists and has been successfully executed.
UK PRA SS2/21
Bring your UK PRA SS2/21 perimeter. We’ll map the critical systems, current custody and Proof of Recovery evidence required for a defensible procedure.
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