Featured Product

    MFSA Clarifies Whether SaaS Cloud Model is an Outsourcing Arrangement

    March 08, 2021

    MFSA published a circular clarifying whether the Software-as-a-Service (SaaS) cloud model is an outsourcing arrangement. The circular also provides brief guidance on how license holders shall manage the relevant outsourcing risks associated with SaaS arrangements, including but not limited to risks associated with the data being processed by the SaaS third-party providers. MFSA states that license holders need to, for instance, give due consideration to business continuity in case of disruptions on the part of the SaaS third-party providers, including migration and exit strategies. The circular also states that SaaS third-party providers should be subject to adequate due diligence both at the initial stage and on an ongoing basis.

    The MFSA circular presents the definition of (verbatim) SaaS as stated in the EC cloud strategy from May 2019 and the differing definition of ICT third-party provider as stated under the proposed Regulation on Digital Operational Resilience. Within the context of the vendor-user relationship, the SaaS model allows the vendor to manage the business application(s) that would otherwise have to be managed in-house. With respect to establishing whether SaaS is an outsourcing arrangement, the circular states that, under normal circumstances, the management element of the service rendered by SaaS third-party providers to license holders qualifies as an outsourcing arrangement. SaaS qualifies as an outsourcing arrangement if the service is performed on a recurrent or an ongoing basis and if the service would normally fall within the scope of functions that would or could realistically be performed by the license holder, even if the license holder has not performed this function in the past. License holders are to assess and determine whether SaaS currently being consumed or planned to be acquired, qualifies as an outsourcing arrangement. License holders are to further assess and determine whether the outsourcing arrangement entails the outsourcing of a critical or important function.  

    Additional guidance on outsourcing risk and on whether certain arrangements quality as outsourcing can be found within the MFSA Guidance on Technology Arrangements ICT and Security Risk Management and Outsourcing Arrangements and on the guidelines of ESAs on outsourcing arrangements and/or outsourcing to cloud service providers. License holders are reminded of their obligation to comply with any applicable Acts, Regulations, rules, and sector-specific guidelines pertaining to outsourcing arrangements.

     

    Related Links

    Keywords: Europe, Malta, Banking, SAAS, Cloud Computing, Outsourcing Risk, Operational Resilience, Third-Party Arrangements, MFSA

    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