APRA publishes outsourcing risk management proposals Taking a ‘principles-based approach’ the paper details APRA's minimum requirements for managing risks from outsourcing but leaves the way open for institutions to develop their outsourcing policy that meets the principles. The draft prudential standards are largely based on the requirements currently in place for ADIs but introduce greater flexibility in the approach to intra-group outsourcing and deal explicitly with outsourcing to an offshore party. APRA Chairman, Dr John Laker, said the risks arising from outsourcing arrangements are common across the industries regulated by APRA and are best addressed through a harmonised approach. "Well-run institutions already apply many of the proposed policies as part of their operational risk management systems. These proposals will ensure a consistent framework across our industries and bring APRA’s approach into conformity with international regulatory principles," Dr Laker said. The draft prudential standards and prudential practice guide will be finalised in the second quarter of 2006 and will take effect on 1st October 2006 . The Discussion Paper is available at:
•Date: 24th March 2006• Region: Australia • Type: Article •Topic: Financial sector |
