The Draft Guidelines, which review the existing CEBS Guidelines on Outsourcing published in (CEBS Guidelines), are the EBA’s. on outsourcing. by PLC Financial Services. Related Content. CEBS: Guidelines on outsourcing. by PLC Financial Services. Related Content. They review the existing Committee of European Banking Supervisors (CEBS) guidelines on outsourcing, which were published in

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Certain competent authorities, such as BaFin in Germany, have already confirmed that they will postpone local implementation of the Cloud Recommendations until such time as the recommendations are integrated into the new outsourcing guidelines and, at that time, will comply with the fixed timeline for such guidelines see The Recommendations Compliance Table.

This announcement by the FCA albeit made to very little fanfare ojtsourcing generally welcomed by both UK financial institutions and cloud providers as the announcement relieves them of the burden of complying with two sets of guidance which, though similar, included nuanced differences. Using proactive remedies to solve outsourcing contract problems Guide: The Guidelines provide the responsibilities of the management body for the establishment of an appropriate framework for outsourcing, its implementation and application in a group, the.

That consultation closed in September. Inquire About Upcoming Events. To understand more about how we use cookies, or for information on how to change your cookie settings, oustourcing see our Cookie Policy. In addition, when outsourcing to third country service providers, a Financial Institution should be satisfied that the service provider acts in a socially responsible manner and adheres to international standards on human rights, guidelinea protection and appropriate working conditions, including the prohibition of child labour.

EBA consults on Guidelines on outsourcing

December 19, WebPage Regulatory News. Institutions and payment institutions should ensure that the service provider grants them and their competent authorities complete access to all relevant business premises access rights and unrestricted rights of inspection and auditing related to the outsourcing arrangement audit rights.

Many attendees at the Public Consultation noted that this scope was unduly onerous and would become administratively burdensome for firms to manage. This requires In-Scope Entities to balance the drive to be innovative and market-leading which appears to be encouraged by the EBA in the FinTech Roadmap with the need to implement robust contractual arrangements and operational processes to manage risk as required by the Draft Guidelines.

At the Public Consultation, the EBA confirmed that intra-group arrangements should be subject to the same degree of rigour and risk assessment as third-party arrangements, but noted that this scope was not new and was already a requirement pursuant to Article of Capital Requirements Directive CRD IV.

Inthe EBA has also promised to issue guidelines and a report or opinion on IT management and security.


The draft Guidelines are considerably more guidelinrs than the CEBS Guidelines, including regarding their scope; the outsourcing policy; the outsourcing contract; other documentation requirements; risk assessments; outsourcing of critical and important functions; outsourcing to third countries; intra-group outsourcing; and sub-outsourcing. In the Draft Guidelines, the expected timeline for implementation of the new guidelines is 30 June and the grace period for updating existing outsourcing arrangements in line with the new guidelines is 31 December The guidelines clarify aspects related to the contractual arrangements, the monitoring and documentation of outsourcing arrangements, and the supervision by competent authorities.

Beyond the key themes identified below, the Public Consultation included discussions of the issues of internal audit, reporting and registration, and supervisory oversight. Hans Svensson Partner Sweden.

EBA consults on Guidelines on outsourcing

The Public Consultation consisted of industry bodies, bank representatives, law firms, service providers and industry utilities in deep discussion and questioning the EBA for two hours. In particular, third country institutions may set up subsidiaries or branches in EU to get or maintain access to EU financial markets and infrastructure. Also, institutions and payments institutions are required to maintain a register of all outsourcing arrangements.

Interestingly the Draft Guidelines do not address the fact that integrating guidelines means that payment institutions and electronic money institutions will, from the effective date of the Draft Guidelines, be subject to the cloud considerations even though such institutions are not currently in scope of the Cloud Recommendations Addressees.

Institutions and payment institutions should ensure that the service provider grants them and their competent authorities complete access to all relevant business premises. Here you can read the Guidelines. According to the draft Guidelines, they will apply to outsourcing arrangements entered into on or after 30 June this is an indicative date.

EBA Consults on Outsourcing Arrangements

The Cloud Recommendations, published on 20 Decemberbecame effective as of 1 July Click here to start your search. According to the draft Guidelines, each Financial Institution should maintain a register of its outsourcing arrangements which documents and records all current outsourcing arrangements and which includes certain specified information regarding: The additional requirements include provisions regarding: The EBA opened a consultation on proposed new outsourcing guidelines back in June.

Next Steps The Public Consultation consisted of industry bodies, bank representatives, law firms, service providers and industry utilities in deep discussion and questioning the EBA for two hours.

One attendee at the Public Consultation requested that the EBA extend the timeline for implementation, but whether the EBA will heed this or any of the recommendations made at the Public Consultation, remains to be seen. EBA is issued a consultation on the draft guidelines on outsourcing in the EU. Institutions and payment institutions should have sound internal governance arrangements which include a clear organisational structure. Outsourcing is relevant in the context of gaining ccebs maintaining access to the EU financial market.


According to the EBA’s work programme forthe supervisory body will continue to focus much of its attention on the regulatory compliance implications of fintech.

According to the EBA, Financial Institutions also need to consider the risks associated with receiving services from third parties, even when these arrangements are not considered to be outsourcing arrangements. Among other things, the draft Guidelines specify certain conditions that must be met before a Financial Institution outsources banking activities or payment services that require authorisation or registration by a competent authority in the Member State where outaourcing Financial Institution is authorised.

The EBA recently published the responses it received to its consultation, including submissions from Pinsent Masons, the law firm behind Oufsourcing. This is a relatively short period of time considering not only the scope of the new guidelines, but also the breadth of change In-scope Entities face in the coming 12 months.

Discussion of Key Themes. Paul Hermant Partner Belgium. The draft Guidelines stipulate that the outsourcing policy should consider the main phases of the life cycle of outsourcing arrangements and define the principles, responsibilities and processes in relation to outsourcing. Pinsent Masons said that competition and digital innovation at banks is at risk unless significant changes are made to the EBA’s draft guidelines on outsourcing.

Weekly Newsletter Receive personalised Out-Law content in your inbox. In particular, each Financial Institution should ensure that the selection of a group entity is based on objective reasons, the conditions of the outsourcing arrangement are set at arms length and that they explicitly deal with any conflicts of interests that the outsourcing arrangement may entail.

Specific guidance is provided on the relationship between institutions, payment institutions and service providers, including on their rights and obligations.

CEBS: Guidelines on outsourcing

According to the EBA, competent authorities must grant authorisation in full compliance with EU Law and should set a strict framework in line with the draft Guidelines for outsourcing from Financial Institutions to third country entities and ensure consistent and effective supervision. These recommendations, addressed to credit institutions, investment firms, and competent authorities Cloud Recommendations Addresseesexamine the key considerations for a relevant institution that outsources services to a cloud environment.

The Recommendation on outsourcing to cloud service providers, published in Decemberhas also been integrated into the Guidelines. Financial Institutions must identify, manage, monitor and report all risk they outsourcihg or might be exposed to in relation to arrangements with third parties. The Guidelines specify a. If a competent authority considers concentration risk to be too great, then it may order the cessation of such an arrangement.

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