Featured Product

    BoM Revises Guideline on Outsourcing by Financial Institutions

    October 13, 2020

    BoM revised the guideline setting out a broad framework for financial institutions that have entered into outsourcing or are planning to outsource their business activities to service providers. The guideline covers risk management framework in outsourcing, evaluation of risks involved in outsourcing, classification of outsourcing activities, and the use of cloud-based services by financial institutions. This guideline is applicable to all financial institutions falling under the regulatory purview of BoM.

    The guideline is based on a three-tier classification of activities: material activities that require authorization, non-material activities that do not require authorization, and core activities that cannot be outsourced. BoM considers cloud-based services operated by service providers as a form of outsourcing and recognizes that financial institutions may have recourse to such services to enhance their operations and service efficiency. The usage of cloud-based services by financial institutions shall be restricted to non-core activities only. Financial institutions are required to take appropriate measures with respect to data access, confidentiality, integrity, sovereignty, recoverability, regulatory compliance, and auditing. They should ensure that the service providers have the capacity to identify and segregate customer data using strong physical or logical controls. As per the guideline, financial institutions are ultimately responsible and accountable for maintaining oversight of cloud-based services and managing the attendant risks of adopting cloud-based services, as in any other form of outsourcing arrangement.

    Financial institutions should conduct an assessment of all their existing outsourcing arrangements against this guideline. Where the outsourcing is considered material, financial institutions should inform BoM in writing about the level of compliance with the guideline and report weaknesses, if any. Institutions should also submit a plan and timeframe on how such weaknesses would be rectified. This should be done within four months from when the guideline becomes effective. Financial institutions should annually submit to BoM a Return on Outsourced Activities, containing a list of all material and non-material activities that have been outsourced, in such form and manner prescribed by BoM. This return should be submitted within the next twenty working days of the previous calendar year. The guideline follows the high-level principles on outsourcing in financial services, developed by the Joint Forum comprising BCBS, IOSCO, and IAIS.

     

    Related Links

    Keywords: Middle East and Africa, Mauritius, Banking, Outsourcing, Cloud Computing, Regtech, BoM

    Related Articles
    News

    EC Rule on Contractual Recognition of Write Down and Conversion Powers

    The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.

    September 17, 2021 WebPage Regulatory News
    News

    APRA Issues Further Guidance on Application of Securitization Standard

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.

    September 16, 2021 WebPage Regulatory News
    News

    SRB Provides Update on Approach to Prior Permissions Regime

    The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.

    September 16, 2021 WebPage Regulatory News
    News

    APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.

    September 15, 2021 WebPage Regulatory News
    News

    EBA Finalizes Guidance to Assess Breaches of Large Exposure Limits

    The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.

    September 15, 2021 WebPage Regulatory News
    News

    PRA Finalizes Changes to Consolidated Prudential Rules Under CRD5/CRR2

    The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.

    September 15, 2021 WebPage Regulatory News
    News

    EBA Revises Guidelines on Stress Tests of Deposit Guarantee Schemes

    The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).

    September 15, 2021 WebPage Regulatory News
    News

    Nordea Bank and EIB Sign Agreement to Fund Green Projects in Nordics

    The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.

    September 15, 2021 WebPage Regulatory News
    News

    HKMA Endorses Industry Guidance to Support LIBOR Transition

    The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).

    September 14, 2021 WebPage Regulatory News
    News

    OCC Issues Booklet on Supervision of Problem Banks

    The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.

    September 13, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7481