New rules on material IT outsourcing in the financial sector
Effective 15 October 2021, financial institutions must notify the CSSF of any planned outsourcing of material IT activities. This notification obligation replaces the prior authorisation requirement.
On 14 October 2021, the Luxembourg financial regulatory authority, the Commission de Surveillance du Secteur Financier ("CSSF"), issued a new circular (Circular 21/785) replacing the prior authorisation obligation for material IT outsourcing with a prior notification obligation (the "Circular"). The Circular also modifies certain contractual requirements applicable to cloud outsourcing, which should allow for more flexibility within corporate groups.
It is furthermore expected that the CSSF will issue in the near future a new, overarching circular on outsourcing to implement the 2019 EBA guidelines on outsourcing arrangements, which are applicable to all supervised entities falling within the scope of the Financial Sector Act of 5 April 1993 (FSA) and the Payment Services Act of 10 November 2009 (PSA) (the "new outsourcing circular"). The provisions of the new outsourcing circular on IT-related outsourcing will also apply to investment fund management companies.
Read the full newsflash summarising the main changes introduced by the Circular.