MAS seeks feedback on proposed Notices to Banks and ...

The consultation closes on 29 January 2021. The proposed Notices to Banks and Merchant Banks on Management of Outsourced Relevant Services ( ... Skiptonavigation Skiptomaincontent(accesskeys) Skiptofooter(accesskeyx) 28January2021 On18December2020,theMonetaryAuthorityofSingapore(“MAS”)releasedaConsultationPaperonNoticestoBanksandMerchantBanksonManagementofOutsourcedRelevantServicestoseekfeedbackonproposedrequirementsinrelationtothemanagementofoutsourcedrelevantservicesbybanksandmerchantbanks(“MBs”)inSingapore.Theconsultationcloseson29January2021. TheproposedNoticestoBanksandMerchantBanksonManagementofOutsourcedRelevantServices(collectivelyreferredtoas“Notices”)setoutrequirementson: OngoingoutsourcedrelevantservicesofbanksandMBsinSingapore,withafocusonserviceswhicharematerial;and Outsourcedrelevantservices,includingthosewhicharenotmaterialornotongoing,whichinvolvethedisclosureofcustomerinformationbybanksorMBstoserviceproviders.Forsuchservices,asubsetofrequirementsaimedatprotectingcustomerinformationwillapply. MASisseekingcommentsontheproposedannexesoftheproposedNoticesrelatingto(a)thelistofrelevantservicescommonlyperformedbybanksorMBsinSingapore,(b)thelistofrelevantservicesthatarenotcommonlyperformedbybanksorMBs,andthus,areexcludedfromthedefinitionofoutsourcedrelevantservice,(c)thelistofrelevantservicesthatarenotcommonlyperformedbybanksorMBs,butareconsideredbyMASasoutsourcedrelevantservices,and(d)thelistofexemptedoutsourcedrelevantservices. MASalsoinvitesfeedbackonrequirementsrelatingtothefollowing: SubmissiontoMASofaregisterofoutsourcedrelevantservicessemi-annuallyoruponrequest. Managementofmaterialongoingoutsourcedrelevantservicesandevaluationofserviceproviders. Outsourcingagreementsformaterialongoingoutsourcedrelevantservicesandtermsrequiredtobeincludedintheoutsourcingagreements. Protectionofcustomerinformation. Useofsub-contractorsformaterialongoingoutsourcedrelevantservices. Auditrequirementsformaterialongoingoutsourcedrelevantservices. Terminationofmaterialongoingoutsourcedrelevantservices. Provisionofmaterialongoingoutsourcedrelevantservicesbyoverseasregulatedfinancialinstitution(“ORFI”). ProvidingMASwithaconfirmationfromtheoverseassupervisoroftheORFIandthescopeofsuchaconfirmation. Outsourcedrelevantservicesthatinvolvethedisclosureofcustomerinformation. ImplementationofagrouppolicyonoutsourcedrelevantservicesbyabankoranMBincorporatedinSingapore. Effectivedate MASintendstoprovidebanksandMBswitha12-monthperiodfromthedateofissuanceoftheproposedNotices,tocomplywiththerequirementsintheproposedNotices,otherthanthoserelatingtooutsourcingagreements.Forrequirementsthatrelatetooutsourcingagreements,abankoranMBwillneedtocomplywiththem12monthsfromthedateofissuanceoftheproposedNotices,orfromthedateonwhichthebankorMBentersintoanewagreementorrenewsanexistingagreement,whicheverislater.ThiswillallowthebankorMBtomakeuseoftheopportunityduringthenegotiationoftheagreementtoincludethetermsrequiredbytheproposedNotices.MASisalsoseekingcommentsontheeffectivedatesoftheproposedNotices. TheexistingMASNotices634and1108willberepealedwhentheproposedNoticestakeeffect.BanksandMBsaretocomplywiththeproposedNoticeswhendisclosingcustomerinformationtoserviceprovidersundertheexceptionspermittedintheThirdScheduletotheBankingAct(“BA”). PendingtheissuanceoftheproposedNotices,MASexpectsbanksandMBstocontinuetoobservetheGuidelinesonOutsourcing(“Guidelines”)andadheretoexistingrequirementsinMASNotices634and1108.MASwillsubsequentlyreviewandamendtheGuidelinestoalignwiththeproposedNotices. Background Bywayofbackground,on6January2020,ParliamentpassedtheBanking(Amendment)Act2020(“BAA”).TheBAAintroducesseveralamendmentstotheBAtoupdateandenhanceMAS’bankingregulatoryframework.TheseincludetheconsolidationoftheregulationofMBsundertheBAandtheintroductionofanewsection47A,whichapplieswhereabankinSingaporeobtainsorreceivesanyrelevantservicefromanybranchorofficeofthebanklocatedoutsideSingapore(includingtheheadofficeofthebank)oranyperson. Referencematerials ThefollowingmaterialsareavailableontheMASwebsitewww.mas.gov.sg: ConsultationPaperonNoticestoBanksandMerchantBanksonManagementofOutsourcedRelevantServices AnnexB-ProposedNoticetoBanksonManagementofOutsourcedRelevantServices AnnexC-ApplicabilityofNoticeandGuidelinesonOutsourcing TemplateforResponsetoConsultationPaperonNoticestoBanksandMBsonRelevantServices   Allen&GledhillRegulatory&Compliance Toassistourclientswithcompliancematters,ourconsultancyarm,Allen&GledhillRegulatory&Compliance,providesarangeofservicesandsolutions.Shouldyouhaveanyqueriesrelatingtocomplianceissuesarisingoutofthesedevelopments,pleasecontact: [email protected] Shareviaemail ShareviaLinkedin Joinourmailinglist Publications BacktoPublications Contacts: AdrianAng Singapore +6568907710 [email protected] FrancisMok Singapore +6568907786 [email protected] CatherineNeo Singapore +6568907195 [email protected] KarenTiah Singapore +6568907741 [email protected] Close Thissiteusescookiesandbyusingthesiteyouareconsentingtothis.Findoutwhyweusecookiesandhowtomanageyoursettings.Moreaboutcookies