On 1 July 2022, the CSSF released a Communiqué on the notification template for outsourcing a critical or important business process (Business Process Outsourcing, "BPO") (the "Communiqué").
The Communiqué supplements Points 59 and 60 of Circular CSSF 22/806 on outsourcing arrangements (the "Circular"), which applies to a majority of regulated entities (e.g. credit institutions, payment institutions and electronic money institutions, investment firms, professionals of the financial sector, etc. (the "In-Scope Entities") (please refer to our eAlert on Circular CSSF 22/806).
According to the Circular, In-Scope Entity must notify in advance certain of their planned outsourcing arrangements to the CSSF.
The Communiqué provides for a notification template together with explanations for outsourcing a BPO. A BPO is an outsourcing whose outcome is primarily of a business nature.
The notification template must be used when an In-Scope Entity intends to outsource a critical or important business process. It may pertain to (i) planned, new critical or important outsourcing arrangements, (ii) material changes to existing critical or important outsourcing arrangements and (iii) changes to outsourcing arrangements that lead to an outsourced function becoming critical or important. Such notification must be submitted to the CSSF at least three months before the planned outsourcing comes into effect, or one month where the In-Scope Entity is a Luxembourg support professional of the financial sector.
Any planned outsourcing arrangement which has not been notified within the above notification period and/or without using the instructions and, where applicable, the forms provided by the CSSF will be considered as not notified.
This template shall not be used for notifying critical or important outsourcing of operational tasks of UCI (undertakings for collective investment) administration and critical or important ICT (information and communications technology) outsourcing for which dedicated templates will be made available or updated soon. In the meantime, existing templates shall be used.
The template must be used as from 30 June 2022 as the Circular is applicable from 30 June 2022 to all outsourcing arrangements entered into, reviewed or amended on or after this date.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.