The Central Bank of Ireland has recently published register templates and guidance notes, for several financial service sectors.
These flow from the CBI’s Cross-Industry Guidance on Outsourcing and the associated Feedback Statement, published on 17 December 2021. These set out the CBI’s requirement that all regulated financial service providers (RFSPs) maintain an outsourcing register.
This continued focus of the CBI on outsourcing stems from its increased use across the financial services sector and the consequential risks associated with outsourcing, which absent effective management, pose a threat to the Irish financial system.
Templates and guidance notes overview
The recently issued templates and guidance notes set out a blueprint for recording all relevant outsourcing arrangements for reporting purposes. The templates and guidance notes apply to the following sectors:
- Payments and electronic money firms
- Markets firms
The scope of the submission requirements are limited to RFSPs whose PRISM Impact Rating is Medium Low or above (or its equivalent). Those falling within this threshold are required to submit a completed reporting template to the CBI via the Online Reporting System (ONR), which can be accessed here. The CBI also advises that all other RFSPs use the relevant industry specific templates to guide the completion of their registers and be prepared to provide their registers to supervisors on request as part of a subsequent collection of registers by the CBI.
The outsourcing arrangements are to be reported on a contract-by-contract, or written agreement basis. The templates contain several distinct sections that RFSPs must address. These include:
- A cover note which ensures the CBI can correctly identify the firm which has submitted its register
- R01 worksheet - this worksheet involves the disclosure of key details of any outsourcing arrangement, as well as information surrounding the criticality or importance of the outsourcing arrangement in question
- Details on the entity signing the contract
- Details on the entity supervising the contract
- Details on the third-party service provider carrying out the outsourcing arrangement
- Additional general information – such as details on the firm’s business continuity plans, exit strategies, as well as details on any other outsourcing arrangements in place
The deadline for submission of completed registers of all qualifying RFSPs is 7 October 2022, with the reference date for the submission of data being 31 December 2021. RFSPs should therefore submit their register with all outsourcing arrangements in place as of 31 December 2021. RFSPs should only include contracts/written agreements with a start date before that date. The CBI has advised the submission deadline from 2023 onwards will likely be at the end of February each year, with the reference date of 31 December of the previous year.
The templates and accompanying guidance notes mark the latest instalment in the CBI’s increased scrutiny of outsourcing arrangements utilised by RFSPs and correspond with the increased use of third-party service providers to perform key business functions.
All RFSPs must pay heed to the cross industry guidance and ensure they are compliant with the requirements set out. RFSPs will benefit from the recently issued templates and guidance notes to ensure they meet 7 October deadline.
For further information, please contact a member of our Financial Regulation Team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.