Featured Product

    Central Bank of Ireland Proposes Guidance on Management of Outsourcing

    February 25, 2021

    Central Bank of Ireland proposed the cross-industry guidance on management of outsourcing risks. The guidance is intended to assist regulated firms in developing their outsourcing risk management frameworks to effectively, identify, monitor, and manage the outsourcing risks. The guidance reminds regulated firms about their statutory obligations on compliance with the existing and future legislation, regulations and about the guidelines relevant to their sector, in respect of the management of outsourcing risk. The consultation period ends on July 26, 2021, post which the Central Bank plans to publish the final guidance in 2021.

    The guidance reaffirms the adoption of the EBA guidelines on outsourcing arrangements and the EIOPA and ESMA guidelines for outsourcing to cloud service providers, for regulated firms that are within the scope of those guidelines.  The central bank deems this guidance relevant to any regulated firm that utilizes outsourcing as part of its business model. The guidance applies equally to intragroup outsourcing arrangements as it does to arrangements with third-party outsourced service providers. Instead of superseding the existing sectoral legislation, regulations, and guidance on outsourcing, the proposed guidance supports and complements these supervisory tools by setting out aspects of good practice for the effective management of outsourcing risk in all its forms. The proposed guidance:

    • Sets out expectations on the governance and management of outsourcing risk, along with the details of the relevant responsibilities of boards and senior management; it also outlines the expectation for regulated firms to consider their strategy and risk appetite in relation to outsourcing and details the elements that should be incorporated in the outsourcing policy of a regulated firm.
    • Highlights the importance of a comprehensive assessment of outsourcing risks and details factors to be considered when assessing and designing controls to manage and/or mitigate a number of key outsourcing risks.
    • Outlines expectations on the management of outsourcing risks in the area of Information and Communications Technology (ICT), including risks arising when outsourcing to the cloud, in addition to presenting the broader measures to be adopted for all critical outsourcing arrangements.
    • Conveys the expectation that regulated firms should undertake appropriate due diligence of outsourced service providers before entering into an outsourcing arrangement and at appropriate intervals during the lifecycle of the arrangement.
    • Emphasizes the importance of regular, comprehensive monitoring of the delivery of the service or function that has been outsourced and the appropriateness of the framework governing and supporting the arrangements.
    • Presents factors that regulated firms should consider when determining whether an outsourced function should be deemed critical or important
    • Specifies the requirements for regulated firms to establish and maintain a register (database) of all outsourcing arrangements and the information (data elements) that such registers should contain; this includes proposal to establish an online regulatory return of the outsourcing registers for submission by regulated firms on a cyclical basis, commencing in January 2022.

     

    Related Links

    Comment Due Date: July 26, 2021

    Keywords: Europe, Ireland, Banking, Insurance, Securities, Outsourcing Risk, Governance, Outsourcing Arrangements, Cloud Service Providers, ESAs, Central Bank of Ireland

    Related Articles
    News

    PRA and FPC Finalize Changes to Leverage Ratio Framework in UK

    The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA

    October 08, 2021 WebPage Regulatory News
    News

    CFPB Proposes Rule on Small Business Lending Data Collection

    The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.

    October 08, 2021 WebPage Regulatory News
    News

    PRA Decides to Maintain O-SII Buffers for Another Year

    The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.

    October 08, 2021 WebPage Regulatory News
    News

    FSB Report Assesses Implementation of Recommendations on Stablecoins

    The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.

    October 07, 2021 WebPage Regulatory News
    News

    APRA Updates Loan Serviceability Expectations for Home Lending

    In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.

    October 06, 2021 WebPage Regulatory News
    News

    CPMI and IOSCO Consult on Guidance on Stablecoin Arrangements

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.

    October 06, 2021 WebPage Regulatory News
    News

    EBA and EIOPA Set Out Work Priorities for 2022

    The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.

    October 05, 2021 WebPage Regulatory News
    News

    MFSA Issues Reporting Updates and Guidance for Banks

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.

    October 05, 2021 WebPage Regulatory News
    News

    EC Publishes Decision on List of Equivalent Third Countries Under CRR

    The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).

    October 04, 2021 WebPage Regulatory News
    News

    EC Rule on Contractual Recognition of Write-Down and Conversion Powers

    EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.

    October 04, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7552