The FCA has recently clarified its expectations regarding the obligation on firms to review legacy outsourcing arrangements in accordance with EBA guidelines on outsourcing arrangements.
Post-Brexit, the EBA guidelines continue to apply to UK banks, building societies, IFPRU investment firms payment institutions and electronic money institutions. In-scope firms are required to conduct a review of existing ‘critical or important’ outsourcing arrangements entered into before 30 September 2019. The deadline for completing these reviews is 31 December 2021.
Firms must also bear in mind the need to comply with the FCA’s Finalised Guidance 16/5 on ‘outsourcing to the cloud’. This applies to all firms OTHER than those which are subject to the EBA guidelines. Among other things, the FCA guidance encourages firms to conduct an analysis of the risks associated with outsourcing arrangements, to implement adequate monitoring with respect to outsourcing partners and to maintain a register of contracts.
A number of firms will be out-of-scope with respect to the EBA guidance. In addition, the FCA guidance is not binding. Nevertheless, both are very useful guides and should be considered required reading for all Senior Managers who are serious about discharging their ‘duty of responsibility’ under the SM&CR.
Getting to grips with both sets of guidelines can be time-consuming and expensive. Fortunately, help is at hand. Corterum already incorporates the requirements of BOTH regulations within its data structure. In doing do, it already provides the framework Senior Managers need in order to be able to demonstrate compliance.
Corterum is a comprehensive and cost-effect SM&CR solution – designed to save you time and money as well as enhance levels of compliance. Book a demo today. Invest just 20 minutes in letting us show you how it can help.