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

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News
    News

    EP Reaches Agreement on Corporate Sustainability Reporting Directive

    The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).

    June 21, 2022 WebPage Regulatory News
    News

    PRA Consults on Model Risk Management Principles for Banks

    The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.

    June 21, 2022 WebPage Regulatory News
    News

    EC Regulation Amends Standards for Calculating Credit Risk Adjustments

    The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.

    June 21, 2022 WebPage Regulatory News
    News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News
    News

    EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance

    The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.

    June 17, 2022 WebPage Regulatory News
    News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News
    News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News
    News

    BIS Bulletins Discuss DeFi Lending and Aspects of Crypto-Assets

    The Bank for International Settlements (BIS) published bulletins on lending in decentralized finance (DeFi) system, on blockchain scalability and fragmentation of crypto, and on extractable value and market manipulation in crypto and decentralized finance.

    June 16, 2022 WebPage Regulatory News
    News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8292