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On 1 July 2022, the CSSF published a Communiqué on the notification model for the outsourcing of a critical or important business process (Business Process Outsourcing, “BPO“) (the “Communicated“).
The Press Release supplements points 59 and 60 of Circular CSSF 22/806 relating to outsourcing agreements (the “Circular“), which applies to a majority of regulated entities (for example credit institutions, payment institutions and electronic money institutions, investment firms, professionals of the financial sector, etc. (the “Entities in scope“) (please refer to our eAlert on CSSF circular 22/806).
According to the Circular, In-Scope Entities must notify the CSSF in advance of some of their outsourcing projects.
The press release provides a notification template as well as explanations for outsourcing a BPO. A BPO is an outsourcing whose result is mainly commercial in nature.
The notification template should be used when an in-scope entity intends to outsource a critical or important business process. These may include (i) planned critical or significant new outsourcing arrangements, (ii) material changes to existing critical or significant outsourcing arrangements, and (iii) changes to outsourcing arrangements that lead to an outsourced function becomes critical or important. This notification must be submitted to the CSSF at least three months before the entry into force of the planned outsourcing, or one month when the In-Scope Entity is a Luxembourg support professional of the financial sector.
Any outsourcing project that 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 should not be used to notify critical or significant outsourcing of operational administration tasks of UCIs (collective investment undertakings) and critical or significant outsourcing of ICT (information and communication) for which dedicated templates will be made available or updated soon. In the meantime, existing models should be used.
The template should be used from June 30, 2022 as the circular is applicable from June 30, 2022 to all outsourcing agreements entered into, revised or amended from that date.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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