Art. 5 Degree of substitutability | Criteria for designating critical service providers |

1. When considering the criterion set out in Article 31(2), point (d), of Regulation (EU) 2022/2554, the ESAsEuropean Supervisory Authority shall assess whether the ICT third-party service provider means an undertaking providing ICT services; fulfils the following ‘step 1’ sub-criteria:
  1. sub-criterion 4.1: the share of the total number of financial entitiesas defined in Article 2, points (a) to (t), broken down by categories of financial entitiesas defined in Article 2, points (a) to (t) as set out in Article 2(1) of Regulation (EU) 2022/2554, for which no alternative ICT third-party service provider means an undertaking providing ICT services; is available which has the required capacity to provide the same ICT services means digital and data services provided through ICT systems to one or more internal or external users on an ongoing basis, including hardware as a service and hardware services which includes the provision of technical support via software or firmware updates by the hardware provider, excluding traditional analogue telephone services; that support critical or important functions means a function, the disruption of which would materially impair the financial performance of a financial entity, or the soundness or continuity of its services and activities, or the discontinued, defective or failed performance of that function would materially impair the continuing compliance of a financial entity with the conditions and obligations of its authorisation, or with its other obligations under applicable financial services law; of financial entitiesas defined in Article 2, points (a) to (t) as the one provided by the relevant ICT third-party service provider means an undertaking providing ICT services;;
  2. sub-criterion 4.2: the share of the total number of financial entitiesas defined in Article 2, points (a) to (t), broken down by categories of financial entitiesas defined in Article 2, points (a) to (t) as set out in Article 2(1) of Regulation (EU) 2022/2554, for which it is highly difficult to migrate an ICT service means an ICT service as defined in Article 2, point (13), of Regulation (EU) 2019/881; provided by the relevant ICT third-party service provider means an undertaking providing ICT services; that supports critical or important functions means a function, the disruption of which would materially impair the financial performance of a financial entity, or the soundness or continuity of its services and activities, or the discontinued, defective or failed performance of that function would materially impair the continuing compliance of a financial entity with the conditions and obligations of its authorisation, or with its other obligations under applicable financial services law; of financial entitiesas defined in Article 2, points (a) to (t) to another ICT third-party service provider means an undertaking providing ICT services;.

The sub-criterion 4.1 set out in paragraph 1, point (a), shall be calculated as follows:

number of financial entitiesas defined in Article 2, points (a) to (t) of a category of financial entitiesas defined in Article 2, points (a) to (t) as set out in

Article 2(1) of Regulation (EU) 2022/2554,

for which no alternative ICT third party service provider is available

which has the required capacity to provide the same ICT services means digital and data services provided through ICT systems to one or more internal or external users on an ongoing basis, including hardware as a service and hardware services which includes the provision of technical support via software or firmware updates by the hardware provider, excluding traditional analogue telephone services;

that support critical or important functions means a function, the disruption of which would materially impair the financial performance of a financial entity, or the soundness or continuity of its services and activities, or the discontinued, defective or failed performance of that function would materially impair the continuing compliance of a financial entity with the conditions and obligations of its authorisation, or with its other obligations under applicable financial services law; of financial entitiesas defined in Article 2, points (a) to (t)

as the one provided by the relevant ICT third party service provider

total number of financial entitiesas defined in Article 2, points (a) to (t) of that category of financial entitiesas defined in Article 2, points (a) to (t)

as set out in Article 2(1)of Regulation 2022/2554

The sub-criterion set out in paragraph 1, point (b), shall be calculated as follows:

number of financial entitiesas defined in Article 2, points (a) to (t) of a category of financial entitiesas defined in Article 2, points (a) to (t) as set out in

Article 2(1) of Regulation (EU) 2022/2554,

for which it is highly difficult to migrate or reintegrate an ICT service means an ICT service as defined in Article 2, point (13), of Regulation (EU) 2019/881; provided

by the ICT third party provider that support

critical or important functions means a function, the disruption of which would materially impair the financial performance of a financial entity, or the soundness or continuity of its services and activities, or the discontinued, defective or failed performance of that function would materially impair the continuing compliance of a financial entity with the conditions and obligations of its authorisation, or with its other obligations under applicable financial services law; to another ICT third party provider

total number of EU financial entitiesas defined in Article 2, points (a) to (t) of that category of financial entitiesas defined in Article 2, points (a) to (t)

as set out in Article 2(1) of Regulation (EU) 2022/2554

1. An ICT third-party service provider means an undertaking providing ICT services; shall be considered as having fulfilled both sub-criteria 4.1 and 4.2 where either of the following is met:
  1. the share of the total number of financial entitiesas defined in Article 2, points (a) to (t) referred to in paragraph 1, point (a), is of at least 10 % of the total number of financial entitiesas defined in Article 2, points (a) to (t) for a category of financial entitiesas defined in Article 2, points (a) to (t) as set out in Article 2(1) of Regulation (EU) 2022/2554;
  2. the share of the total number of financial entitiesas defined in Article 2, points (a) to (t) referred to in paragraph 1, point (b), is of at least 10 % of the total number of financial entitiesas defined in Article 2, points (a) to (t) or a category of financial entitiesas defined in Article 2, points (a) to (t) as set out in Article 2(1) of Regulation (EU) 2022/2554.
1. When considering the criterion set out in Article 31(2), point (d), of Regulation (EU) 2022/2554 and where the ICT third-party service provider means an undertaking providing ICT services; fulfils the ‘step 1’ sub-criteria referred to in paragraph 1 of this Article, the ESAsEuropean Supervisory Authority shall carry out their assessment in the light of the step two sub-criterion specified in Article 31(2), point (d)(i) of Regulation (EU) 2022/2554.