New outsourcing arrangements for PFS

The European Banking Authority (EBA) has issued revised Guidelines on outsourcing arrangements (EBA/GL/2019/02 or the Guidelines). While the Guidelines apply to credit institutions, investment firms and payment and electronic money institutions only, the CSSF has chosen to extend the scope of application of this circular in order to promote convergence on a national level.

This circular complements the framework on internal governance arrangements by specifying guiding principles and laying down additional detailed requirements described in Part I and III of the circular that supervised entities must observe when resorting to outsourcing arrangements. Therefore, this circular shall be read together with those relevant legal provisions(Outsourcing arrangements shall at all times comply with the organizational requirements for outsourcing in accordance with articles 36-2 or 37-1(5) LFS and articles 11(4) or 24-7(4) LPS, where applicable) and the circulars CSSF on central administration, internal governance and risk management(, Circular CSSF 12/552 for credit institutions and Circular CSSF 20/758 for investment firms) as applicable to supervised entities.

with the organizational requirements for outsourcing in accordance with articles 36-2 or 37-1(5) LFS and articles 11(4) or 24-7(4) LPS, where applicable) and the circulars CSSF on central administration, internal governance and risk management(, Circular CSSF 12/552 for credit institutions and Circular CSSF 20/758 for investment firms) as applicable to supervised entities.

This circular is divided in three parts: the first part sets out the requirements in relation to outsourcing arrangements and includes definitions, scope of application, general principles and applicable governance requirements; the second part is dedicated to specific requirements for ICT outsourcing arrangements relying or not on a cloud computing infrastructure and the third part provides for the entry into force of this circular. 

Opexia Advisory consultants can assist you in the set up of such arrangements to comply with the new circular. Do not hesitate to contact us.