The International Organization of Securities Commissions (IOSCO) published its “Principles on Outsourcing of Financial Services for Market Intermediaries”. The Outsourcing Principles cover seven areas, which include the due diligence process in selecting a service provider, the contract with a service provider, business continuity issues, client confidentiality, concentration of outsourcing services, termination procedures and access to books and records.
Central to the Outsourcing Principles are a set of performance standards that provide that the outsourcing firm, its management and governing authority must retain full legal liability and accountability to the regulator for all outsourced functions. Moreover, the outsourcing firm must retain the competence and ability to ensure that the firm complies with regulatory requirements.
A related document, the Notice of Final Report, Survey and Summary of Contents, describes the comments that were received during the consultation process and how IOSCO addressed these comments in its final version of the Outsourcing Principles. In addition, IOSCO’s Technical Committee surveyed industry participants and distributed a questionnaire to obtain more information concerning existing outsourcing practices in the securities industry. The results of this survey are being published in the paper titled Survey Results on Outsourcing of Financial Services.
Press release
Outsourcing principles
Notice of final report
Survey results
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