The International Organization of Securities Commissions has published an updated Principles on Outsourcing for regulated market participants in the securities markets. The updated Principles are based on IOSCO’s 2005 Outsourcing Principles for Market Intermediaries and 2009 Outsourcing Principles for Markets. However, the updated Principles will also apply to trading venues, market intermediaries, market participants acting on a proprietary basis, and credit rating agencies. Financial market infrastructures may also choose to consider their application, although the Principles are not addressed to those entities.
The updated Principles on Outsourcing comprise fundamental precepts and seven principles. The fundamental precepts cover scope, definition of outsourcing, responsibility for outsourcing, potential risks and challenges, assessments of materiality and criticality, the application of the Principles to affiliates, the treatment of sub-contracting, outsourcing on a cross-border basis and concentration of outsourcing tasks. The revised Principles are: