ESMA published a consultation paper on guidelines on outsourcing to cloud service providers. The consultation is open until September 01, 2020 and seeks feedback from both national competent authorities and financial market participants that use cloud services provided by third parties. The consultation is also important for cloud service providers, as the draft guidelines aim to ensure that potential risks firms may face from the use of cloud services are properly addressed. ESMA aims to publish the final report on the guidelines by the first quarter of 2021.
The proposed guidelines are consistent with the EBA recommendations on outsourcing to cloud service providers, which were subsequently incorporated into the revised EBA guidelines on outsourcing arrangements in February 2019, and the EIOPA guidelines on cloud outsourcing that were published in February 2020. The guidelines cover the outsourcing requirements applicable to financial market participants when they outsource to cloud service providers. They are intended to help firms and competent authorities identify, address, and monitor the risks and challenges that arise from cloud outsourcing arrangements—from making the decision to outsource, selecting a cloud service provider, and monitoring outsourced activities to providing for exit strategies. The proposed guidelines set out the:
- Governance, documentation, oversight, and monitoring mechanisms that firms should have in place
- Assessment and due diligence that should be undertaken prior to outsourcing
- Minimum elements that outsourcing and sub-outsourcing agreements should include
- Exit strategies and the access and audit rights that should to be catered for
- Notification to competent authorities
- Supervision by competent authorities
Comment Due Date: September 01, 2020
Keywords: Europe, EU, Banking, Insurance, Securities, PMI, Cloud Computing, Third Party Arrangements, Outsourcing Arrangements, ESMA
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.
The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.
The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),
The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances
The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.
The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.
The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.
The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.
The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.