The Financial Conduct Authority is increasing its scrutiny of relationships that payment institutions and electronic money institutions have with their suppliers. If these relationships amount to ‘outsourcing’, the relevant contract needs to comply with the FCA’s requirements on outsourcing. These requirements are onerous, especially if the outsourcing is of a ‘critical or important function’.
We can assist you:
- in identifying which relationships, that you have with third party suppliers, amount to outsourcing and which amount to “critical or important” outsourcing;
- in conducting a gap analysis of the contracts which amount to ‘outsourcing’ against the FCA’s requirements on outsourcing; and
- in plugging any gaps in your outsourcing contracts by:
- recommending updates to the contracts; and
- negotiating the amendment of these contracts with the relevant supplier.
In carrying out the above work, we can ensure that your contracts are compliant. This will hopefully reduce any nagging feeling you might have about work not yet done or the FCA potentially fining your organisation. It will also improve your contracts so that they are more in your favour, reduce your operational risk and save you time.
The best time to ensure that a contract with a supplier complies with the FCA’s requirements on outsourcing is before the contract is entered into. We can:
- conduct a gap analysis on contracts that suppliers send to you to advise on whether they meet the FCA’s requirements;
- recommend changes to a supplier’s contract so that it does comply with the FCA’s requirements;
- negotiate the recommended changes to the supplier’s contract;
- draft compliant supplier contracts.
A review and negotiation of new contracts will mean that your contracts with suppliers are compliant from day one, and that your contract will better protect you from operational risks than it otherwise would have done. We can take the hassle out of ensuring compliance by doing the heavy lifting for you.
The FCA’s requirements for outsourcing requirements apply, whether or not the supplier is a member of the same group of companies. We can help you put in place a compliant intra-group outsourcing contract so that you satisfy the FCA’s requirements.
You want to focus your time and energy on running your department, without the worry that you have a suite of contracts which do not comply with the FCA’s obligations. We will let you do that.
For more information or for a confidential discussion, please contact Richard Creed.
To get our help, book in for one of our free 30 minute video consultations