Featured Product

    IOSCO Updates Outsourcing Principles for Operational Resilience

    October 27, 2021

    The Board of the International Organization of Securities Commissions (IOSCO) published a final report updating the outsourcing principles for regulated entities that outsource tasks to service providers, including the cloud service provider. The updated principles are based on the earlier outsourcing principles for market intermediaries and for markets, but their application has been expanded to include trading venues, intermediaries, market participants acting on a proprietary basis, and credit rating agencies.

    The revised outsourcing principles comprise a set of fundamental precepts and seven principles. The fundamental precepts cover issues such as the definition of outsourcing, the assessment of materiality and criticality, affiliates, sub-outsourcing, and outsourcing on a cross-border basis. The seven principles set out expectations for regulated entities that outsource tasks, along with the guidance for implementation. One key principles specifies that a regulated entity should take appropriate steps to ensure that service providers protect confidential information and data related to the regulated entity and its clients, from intentional or inadvertent unauthorized disclosure to third parties. In general, the principles address the following factors:

    • Due diligence in the selection and monitoring of a service provider and its performance
    • 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

    The report also briefly addresses the impact of COVID-19 on outsourcing and operational resilience and includes an Annex that describes how outsourcing integrates with cloud computing and how credit rating agencies use and incorporate outsourcing and cloud computing in their organizational strategies and structures. It covers, among others, the three cloud service models—namely, Infrastructure as a Service, Platform as a Service, and Software as a Service. The report notes that the basic approaches to outsourcing and cloud computing are not limited to the credit rating agency sector, rather they span the financial services industry. 


    Related Links

    Keywords: International, Banking, Securities, Outsourcing Principles, Cloud Service Providers, PAAS, SAAS, Operational Resilience, Cyber Risk, Operational Resilience, Cyber Risk, Operational Risk, Regtech, IOSCO

    Related Articles

    EBA Launches Stress Tests for Banks, Issues Other Updates

    The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.

    January 31, 2023 WebPage Regulatory News

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8700