Featured Product

    ESMA Publishes Guidelines on Outsourcing to Cloud Service Providers

    December 18, 2020

    ESMA published the final report on the guidelines for outsourcing to cloud service providers. The guidelines apply to competent authorities and various entities under the ESMA remit, including credit rating agencies, investment firms and credit institutions when they carry out investment services and activities, data reporting services providers, and market operators of trading venues. The guidelines apply from July 31, 2021 to all cloud outsourcing arrangements entered into, renewed, or amended on or after this date. In addition, ESMA announced recognition of Euroclear UK & Ireland Limited, a UK-established central securities depository (CSD) as a third-country CSD after Brexit transition on December 31, 2020. Yet another announcement involves registration of DTCC Data Repository (Ireland) PLC (by ESMA) as a trade repository under the European Market Infrastructure Regulation (EMIR) and the Securities Financing Transactions Regulation (SFTR), with effect from December 23, 2020.

    The guidelines are intended to help firms identify, address, and monitor the risks arising from cloud outsourcing arrangements. The guidelines are also intended to support a convergent approach to the supervision of cloud outsourcing arrangements across competent authorities in EU. The report incorporates feedback received during the consultation process for these draft guidelines (during June 03, 2020 to September 01, 2020) as well as the relevant outsourcing guidelines from EBA and EIOPA. While working on these guidelines, ESMA has been also mindful of the proposal for a Digital Operational Resilience regulation, which the EC published in September 2020. The guidelines in this report focus on:

    • Risk assessment and due diligence that firms should undertake with respect to the cloud service providers
    • Governance, organizational, and control frameworks that firms should put in place to monitor the performance of cloud service providers 
    • How to exit the cloud outsourcing arrangements without undue disruption to business
    • Contractual elements that a cloud outsourcing agreement should include
    • Information to be notified to competent authorities

    The guidelines apply from July 31, 2021 and firms should review and amend accordingly the existing cloud outsourcing arrangements with a view to ensuring that they take into account these guidelines by December 31, 2022. Where the review of cloud outsourcing arrangements of critical or important functions is not finalized December 31, 2022, firms should inform the respective competent authority about this, including the measures planned to complete the review or the possible exit strategy.

     

    Related Links

    Keywords: Europe, EU, Banking, Securities, Outsourcing, Cloud Computing, DTCC, Euroclear, ESMA

    Related Articles
    News

    EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation

    The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).

    May 23, 2022 WebPage Regulatory News
    News

    EBA Publishes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.

    May 23, 2022 WebPage Regulatory News
    News

    EIOPA Examines Physical Climate Risk Exposure, SII Non-Compliance

    The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks

    May 20, 2022 WebPage Regulatory News
    News

    EC Publishes Results on Review of Web Accessibility Directive

    The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.

    May 19, 2022 WebPage Regulatory News
    News

    NGFS Report Explores Quantification of Climate Risk Differentials

    The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations

    May 19, 2022 WebPage Regulatory News
    News

    MAS Consults on Adjustment Spreads for Conversion of SOR Contracts

    The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.

    May 18, 2022 WebPage Regulatory News
    News

    OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities

    The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.

    May 17, 2022 WebPage Regulatory News
    News

    EBA Proposes Standards to Support Secondary NPL Markets

    The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.

    May 17, 2022 WebPage Regulatory News
    News

    EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution

    The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).

    May 13, 2022 WebPage Regulatory News
    News

    EBA Issues Standards for Crowdfunding Service Providers Under ECSPR

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.

    May 13, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8206