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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This raises the obvious question about the need for such an agreement between EU regulators and the FCA post-Brexit; unfortunately, the EBA advised that the status of any work regarding cooperation agreements fell outside of the remit of the Public Consultation. The Draft Guidelines aim to integrate the Cloud Recommendations, and the Cloud Recommendations will be repealed when the final outsourcing guidelines take oursourcing.

Financial Institutions should pay particular attention to conflicts of interest in the context of intra-group outsourcing arrangements.

The Guidelines provide criteria to ensure a more harmonised assessment of the criticality or importance of functions. The EBA confirmed they had not yet considered this point and advised that they would reflect and clarify the position in the final guidelines.

Inthe EBA has also promised to issue guidelines and a report or opinion on IT management and security. They are divided into five titles, as follows:. 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. The European Council presidency and the European Parliament agreed on a new framework for dealing with the non-performing loans NPLs of banks.

The Recommendation on outsourcing to cloud service providers, published in Decemberhas also been integrated into the Guidelines.

EBA Consults on Guidelines on Outsourcing in the EU

September 24, Keywords: Shane Barber Managing Partner Australia. This announcement by the FCA albeit made to very little fanfare was 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.


The EBA has said that it will issue a follow-up report or opinion on “the implementation” of its cloud outsourcing recommendations. 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. The EBA also emphasised the need for a cooperation agreement between relevant competent authorities if the outsourcing service provider is located in a third country see paragraph 26 of the Draft Guidelines.

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 To understand more about how we use cookies, or for information on how to change your cookie settings, please see our Cookie Policy.

The guidelines clarify aspects related to the contractual guldelines, the monitoring and documentation of outsourcing arrangements, and the supervision by competent authorities. Certain competent authorities, such as BaFin in Germany, outsurcing 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 Guiidelines.

Below we summarise the key points of the Guidelines. The Guidelines provide comprehensive and detailed requirements relating to outsourcing, oufsourcing both the internal governance duties for institutions and payment institutions using external kutsourcing, 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. Share this post Select how you would like to share using the options below.

EBA to issue final outsourcing guidelines in early

This approach was challenged at the Public Consultation on the grounds it could lead to operational risk, in particular in connection with cloud outsourcing arrangements. The Guidelines include requirements which aim at ensuring that: Pauline Kuipers Partner Netherlands.


The draft Guidelines require a Financial Institution to identify the outsourcing of critical or important functions and impose stricter requirements on such outsourcing as compared to other outsourcing arrangements. 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.

If a competent authority considers concentration risk to be too great, then it may order the cessation of such an arrangement. Stefano Febbi Partner Italy. Interestingly the Draft Guidelines do not outwourcing 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.

As a result, both cloud and FinTech featured heavily on the agenda at the Public Consultation.

CEBS: Guidelines on outsourcing | Practical Law

It also plans to develop a “coherent cyber resilient testing framework” next year. 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. According to the draft Guidelines, they will apply to outsourcing outsourcng entered into on or after 30 June this is an indicative date.

Institutions and payment institutions should have sound internal governance arrangements outsouurcing include a clear organisational structure. EBA is issued a consultation on the draft guidelines on outsourcing in the EU. Inquire About Upcoming Events.

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