Featured Product

    IOSCO Consults on Outsourcing Principles for Operational Resilience

    May 28, 2020

    IOSCO proposed updates to its principles for regulated entities that outsource tasks to service providers. The proposed Principles on Outsourcing are based on IOSCO´s 2005 Outsourcing Principles for Market Intermediaries and the 2009 Outsourcing Principles for Markets but their application has been expanded to include trading venues, market participants acting on a proprietary basis, credit rating agencies, and financial market infrastructures. The consultation period ends on October 01 2020.

    The revised principles comprise a set of fundamental precepts and a set of seven principles. The consultation report contains sections on particular sectors and issues, with Annex A providing a report on outsourcing among credit rating agencies, including the use of cloud computing. The fundamental precepts cover issues such as the definition of outsourcing, the assessment of materiality and criticality, their application to affiliates, the treatment of sub-contracting, and outsourcing on a cross-border basis. The seven principles cover the following areas, with each of these principles being supplemented with guidance for implementation:

    • Due diligence in the selection and monitoring of a service provider
    • The contract with a service provider
    • Information security, business resilience, continuity and disaster recovery
    • Confidentiality Issues
    • Concentration of outsourcing arrangements
    • Access to data, premises, personnel, and associated rights of inspection
    • Termination of outsourcing arrangements 

    Since the publication of IOSCO´s earlier principles on outsourcing for market intermediaries and for markets, developments in markets and technology have increased regulatory attention on risks related to outsourcing and the need to ensure the operational resilience of regulated entities. IOSCO prepared this report before the COVID-19 outbreak. However, on April 08, 2020, the IOSCO Board agreed to delay publication of its reports to allow firms and financial institutions to redirect their resources to focus on the challenges arising from the pandemic. As the initial stages of this crisis pass, the IOSCO Board has decided to publish this report now because the outbreak of COVID-19 has highlighted the need to ensure resilience in operational activities and to maintain business continuity in situations where both external and often unforeseen shocks impact both firms and their service providers. To account for the ongoing resource constraints on financial institutions, however, the consultation period goes well beyond the typical 90-day comment period and will end on October 01, 2020. The consultation report includes a set of questions, including one of particular relevance during the current COVID-19 pandemic: What measures for business continuity would be effective in situations where all, or a significant portion, of both the outsourcers’ and third-party providers’ work force is working remotely? In particular, what steps should be taken so Cyber Security and Operational Resilience can be ensured?” 

     

    Related Links

    Comment Due Date: October 01, 2020

    Keywords: International, Banking, Securities, PMI, Credit Rating Agencies, Operational Risk, Outsourcing, Third-party Arrangements, Cloud Computing, COVID-19, IOSCO

    Related Articles
    News

    APRA Updates Validation and Derivation Rules in September 2020

    APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.

    September 24, 2020 WebPage Regulatory News
    News

    EC Proposes Frameworks for Crypto-Assets and Operational Resilience

    EC adopted a package that includes the digital finance and retail payments strategies and the legislative proposals for regulatory frameworks on crypto-assets and digital operational resilience.

    September 24, 2020 WebPage Regulatory News
    News

    ECB Publishes Opinion on Proposals to Amend Securitization Framework

    ECB published an opinion (CON/2020/22) on proposals for regulations amending the securitization framework of EU, in response to the COVID-19 pandemic.

    September 24, 2020 WebPage Regulatory News
    News

    FCA Consults on Regulation of International Firms in UK

    FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.

    September 23, 2020 WebPage Regulatory News
    News

    MAS Amends Notice on Capital Adequacy Requirements of Banks

    MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.

    September 23, 2020 WebPage Regulatory News
    News

    FCA to Begin to Move Firms to New Data Collection Platform RegData

    FCA announced that it will move firms to RegData from Gabriel in the coming months in stages, based on the reporting requirements of firms.

    September 23, 2020 WebPage Regulatory News
    News

    ISDA Expects IBOR Fallbacks to be Effective by End of January 2021

    ISDA issued a letter to regulators to flag that it now expects the supplement to the 2006 ISDA Definitions and the Interbank Offered Rate (IBOR) Fallbacks Protocol to be effective around mid- to late-January 2021.

    September 23, 2020 WebPage Regulatory News
    News

    APRA Reviews Repayment Deferral Plans, Identifies Best Practices

    APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.

    September 22, 2020 WebPage Regulatory News
    News

    ESAs Assess Risks to Financial Sector After COVID-19 Outbreak

    ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.

    September 22, 2020 WebPage Regulatory News
    News

    BoE Confirms Withdrawal of COVID Corporate Financing Facility

    BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.

    September 22, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5836