MAS Proposes Notices on Management of Services Outsourced by Banks
MAS is consulting on notices for management of "outsourced relevant services," which include certain cloud services, by banks and merchant banks in Singapore. Once the proposed notices take effect, MAS Notices 634 and 11082 will be repealed. Banks and merchant banks are expected to comply with the proposed notices when disclosing customer information to service providers under the exceptions permitted in the Third Schedule to the Banking Act. The comment period for the consultation ends on January 29, 2021. A bank or a merchant bank will need to comply with the requirements that relate to outsourcing agreements within 12 months of the date of issuance of the proposed notices, or from the date on which the bank or merchant bank enters into a new agreement or renews an existing agreement, whichever is later.
Services that are covered as outsourced relevant services include public cloud services such as software-as-a-service, platform-as-a-service, and infrastructure-as-a-service. Other services in this category are information technology helpdesks services, data center operations or data center facility management services, express letter and parcel delivery services, and card embossing services. MAS also proposed that relevant services that are not for the conduct of banking business and where the service provider does not have access to a bank or merchant bank's confidential or customer information be considered as exempted outsourced relevant services, and not be subject to the proposed Notices given the nature of such services. To help the industry determine which relevant services are outsourced relevant services, MAS is proposing to set out:
- A non-exhaustive list of relevant services that are commonly performed by banks or merchant banks (Annex A of the proposed notices)
- An exhaustive list of relevant services that are not commonly performed by banks or merchant banks and thus, are excluded from the definition of outsourced relevant service (Annex B of the proposed notices)
- An exhaustive list of relevant services, that are not commonly performed by banks or merchant banks, but are considered by MAS as outsourced relevant services and thus, are subject to relevant requirements in the proposed notices (Annex C of the proposed notices)
Comment Due Date: January 29, 2021
Keywords: Asia Pacific, Singapore, Banking, Merchant Banks, Outsourcing, Cloud Computing, SAAS, MAS
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