The Committee of European Banking Supervisors (CEBS) today starts a second round of public consultation on the standards for outsourcing of credit institutions’ business activities. The consultation runs until 6 July 2006.
The aim of CEBS is to promote convergence in supervisory approaches to outsourcing. The proposed standards are based on current practices and also take into account international and European initiatives in the field of outsourcing. CEBS and the Committee of European Securities Regulators (CESR) will ensure that the proposed standards are consistent with the regulatory framework defined by the Markets in Financial Instruments Directive (MiFID) and its application to credit institutions. The technical implementation measures of the MiFID will be taken into account before finalisation of CEBS guidelines.
In the proposed standards outsourcing is defined as authorised entity’s use of a third party to perform activities on a continuing basis that would normally be undertaken by the authorised entity. One key element is that outsourcing arrangements can never result in the delegation of senior management’s responsibilities.
The proposed standards are principle based and are designed to ensure an appropriate level of convergence while leaving some room for flexibility in order to accommodate specific rules and market practices at the national level.