On May 28, the International Organization of Securities Commissions (IOSCO) published for comment revised Principles on Outsourcing (Revised Principles). Previously, IOSCO had issued outsourcing principles for market intermediaries (2005) and markets (2009). The proposed Revised Principles consolidate and build on this earlier work, expand the scope of coverage (e.g. to include credit rating agencies, market participants acting on a proprietary basis and financial market infrastructures), and update the content to reflect technological and market developments. We think that market participants may find the proposed, Revised Principles a helpful source of guidance on evolving standards for outsourcing in the securities industry.

The seven Revised Principles and related implementation guidance cover:

  • Due diligence in selecting and monitoring service providers;
  • Contracts with service providers;
  • Information security, business resilience, continuity and disaster recovery;
  • Confidentiality issues;
  • Concentration of outsourcing arrangements;
  • Access to data, premises, personnel and associated rights of inspection; and
  • Termination of outsourcing arrangements.

The consultation deadline is October 1. If you have any questions about the proposed, Revised Principles, please do not hesitate to contact us.

June 30, 2020