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

    BIS Examines Use of Big Data and Machine Learning at Central Banks

    BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.

    March 04, 2021 WebPage Regulatory News
    News

    APRA Finalizes Reporting Standard for Operational Risk Requirements

    APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.

    March 03, 2021 WebPage Regulatory News
    News

    ECB Publishes Guide for Determining Penalties for Regulatory Breaches

    ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.

    March 02, 2021 WebPage Regulatory News
    News

    MAS Sets Out Good Practices to Manage Operational Risks Amid COVID

    MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.

    March 02, 2021 WebPage Regulatory News
    News

    ACPR Announces New Data Collection Application for Banks and Insurers

    ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.

    March 02, 2021 WebPage Regulatory News
    News

    BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox

    BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.

    March 02, 2021 WebPage Regulatory News
    News

    EIOPA Launches Study on Non-Life Underwriting Risk in Internal Models

    EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.

    March 01, 2021 WebPage Regulatory News
    News

    SRB Publishes Overview of Resolution Tools Available in Banking Union

    SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.

    March 01, 2021 WebPage Regulatory News
    News

    EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR

    EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).

    March 01, 2021 WebPage Regulatory News
    News

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    March 01, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6655