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

EBA Consults on Guidelines on Outsourcing in the EU

Many attendees at the Public Consultation noted that this scope was unduly onerous and would become administratively burdensome for firms to manage. The consultation runs until September 24, The additional requirements include provisions regarding: 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 outsourcimg the Draft Guidelines.

According to the draft Guidelines, they will apply to outsourcing arrangements entered into on or after 30 June this is an indicative date.

That said, the potential systemic risk implications of the use of cloud arrangements is an area of focus for banking regulators and should be monitored going forward. The guidelines also stipulate that institutions must ensure audit and access rights guidelimes written outsourcing agreements both for themselves and for competent authorities and institutions are required to maintain a register of all outsourcing arrangements.

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. Alexander Shepherd Partner Singapore. The revised guidelines deal with the responsibilities of the management body for the establishment of an appropriate framework for cesb, its implementation and application in a group, the due diligence process, and risk assessment before entering such arrangements.


Institutions and payment institutions should have sound internal governance arrangements which include a clear organisational structure.

If you continue to use our website you agree to our use of cookies. The aim of these Guidelines is to harmonise the framework for outsourcing arrangements of all financial institutions in the scope of the EBA’s action.

Looking for news over 5 years old? If a competent authority considers concentration risk to be too great, then it may order the cessation of such an arrangement. The Guidelines specify a.

Want to find more news articles? The EBA has said that it will issue a follow-up report or opinion on “the implementation” of its cloud outsourcing recommendations. Ouutsourcing and payment institutions should ensure that the service provider grants them and their competent authorities complete access to all relevant business premises.

European Banking Authority’s Draft Guidelines on Outsourcing: Discussion of Key Themes

In-scope Entities should therefore review the terms of their intra-group agreements and think about their current operational measures and controls to manage intra-group arrangements. It should cover at outsourcng.

Moody’s Analytics Product Training. The guidelines clarify aspects related to the contractual arrangements, the monitoring and documentation of outsourcing arrangements, and the supervision by competent authorities. The Guidelines will now apply to credit institutions and investment firms jointly “institutions”as well as payment institutions and electronic money institutions jointly “payment institutions”. Going forward, it will be interesting to see how the FCA responds to the introduction of the outsourcing guidelines and, as a result, repeal of the Cloud Recommendations which are scheduled to come into effect after the UK has left the EU.

The Cloud Recommendations were published ahead outaourcing the full revision of the CEBS Guidelines, due to demand for timely guidance in this area.

EBA Consults on Guidelines on Outsourcing in the EU

Discussion of Key Themes. They also provide a harmonised set of criteria for assessing criticality or importance. As well as having a broader scope of application, the draft Guidelines are considerably more prescriptive than the CEBS Guidelines meaning that inscope Financial Institutions will need to review and update their outsourcing arrangements once the draft Guidelines are adopted. We remain hopeful that the EBA will address these key issues when it comes to finalise the guidelines in the first quarter of ,” she said.


The draft Guidelines apply in fully to intra-group outsourcing arrangements. The Guidelines provide comprehensive and detailed requirements relating to outsourcing, covering both the internal governance duties for institutions and payment institutions using external providers, contractual arrangements with an insourcer outsourceeand supervision over the outsourced functions, not only by the institutions and payment institutions themselves, but also by relevant supervisory authorities.

In addition, the Guiselines Institution should ensure that the service provider appropriately oversees the sub service providers in line with the policy defined by the Financial Institution. Specific guidance is provided on the relationship between institutions, payment institutions and service providers, including on their rights and obligations.

EBA consults on Guidelines on outsourcing

The EBA is also due to publish reports on emerging technology risks and related guidance for prudential supervisors, such as big data and data analytics, distributed ledger technology and open banking, in the second and fourth quarters ofit said. 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.

In-Scope Entities, therefore, need to start thinking, ahead of the implementation date, about how best to reconcile the desire to engage with start-ups and innovation hubs within a reasonably rigid framework of rules and requirements for third-party contracting. 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 due diligence process and risk assessment before entering in such arrangements.

Outsourcing arrangements with third country service providers must be subject to additional safeguards that ensure that they do not unduly increase risks or impair the ability of competent authorities to effectively supervise Financial Institutions. Financial Institutions must identify, manage, monitor and report all risk they are or might be exposed to in relation to arrangements with third parties.