OM-3.1 OM-3.1 Introduction
OM-3.1.1
This Chapter sets out the CBB's approach to outsourcing by licensees. It also sets out various requirements that licensees must address when considering outsourcing an activity or function.
Amended: January 2011
October 07OM-3.1.2
In the context of this Chapter, 'outsourcing' means an arrangement whereby a third party performs on behalf of a licensee an activity which was previously undertaken by the licensee itself (or in the case of a new activity, one which commonly would have been performed internally by the licensee). Examples of services that are typically outsourced include data processing, cloud services, customer call centres and back-office related activities.
Amended: October 2017
October 07OM-3.1.3
Most of the Directives in this Chapter are concerned with situations where the third party provider is outside the licensee's group. Section OM-2.8, however, sets out the CBB's requirements when a service is outsourced to a company within the licensee's group.
Amended: January 2011
October 07OM-3.1.4
The requirements in this Chapter only apply to 'material' outsourcing arrangements. These are arrangements that, if they failed in any way, would pose significant risks to the on-going operations of a licensee, its reputation and/or quality of service provided to its customers. For instance, the outsourcing of all or a substantial part of functions such as customer sales and relationship management, settlements and processing, IT and data processing and financial control, would normally be considered 'material'.
October 07OM-3.1.5
Management should carefully consider whether a proposed outsourcing arrangement falls under this Chapter's definition of 'material'. If in doubt, management should consult with the CBB.
Amended: January 2011
October 07OM-3.1.5A
For outsourcing services that are not considered material outsourcing arrangements, licensees must submit a written notification to the CBB before committing to the new outsourcing arrangement.
Added: October 2017OM-3.1.6
The requirements in this Chapter only apply to outsourcing arrangements entered into after May 2003. In the case of pre-existing outsourcing agreements, the CBB requires licensees to apply the requirements of this Chapter to the fullest extent possible when these arrangements are subsequently renewed.
Amended: January 2011
October 07[deleted]
Deleted: July 2011OM-3.1.7
[This Paragraph was deleted in July 2011].
