Page 2 - Knowledge_Insights_Brochure_Matheson

Introduction

On 19 November 2018, the Central Bank of Ireland (“Central Bank”) released Discussion

Paper 8 – Outsourcing Findings and Issues for Discussion (“DP”). The DP had been
eagerly awaited by the financial services industry, in the hope, that it would provide some
clarity around the most up to date regulatory views on outsourcing in Ireland. It remains
the most up to date document issued by the Central Bank on outsourcing.

There are several references throughout the DP to the fact that it “is not intended to
represent the Central Bank’s definitive guidance on outsourcing”, however, it makes it clear
that what is outlined is its “minimum supervisory expectations”. In the of this, regulated
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firms (“RF”) are advised by the Central Bank to review the DP as against their current

governance, risk management and business continuity management practices to ensure
compliance with the Central Bank’s outlined expectations.

Importance Of Service Level Agreements

In The Context Of Outsourcing Arrangements

In this Matheson Insights we consider the impact the DP has on one of the areas which
we have found our clients seeking the most guidance on since the publication of the DP,
and that is the area of Service Level Agreements (“SLAs”). The importance of SLAs can
be seen in the Central Bank’s statement that “an absence of detailed SLAs against which

performance can be measured creates a risk that regulated firms do not have appropriate
oversight or mechanisms in place to measure performance”. 2

Central Bank’s Guidance On What

An SLA Should Include:

Throughout the various sections of the DP, the Central Bank makes references to what
it expects to be reflected in an SLA but it does not address this topic in one dedicated
section. We in Matheson have distilled from the DP what the Central Bank’s expectations

are in respect of same and detail them in a checklist form below. Clients would be well
advised to review their existing SLAs against these expectations.

1. The Central Bank states that “Regulated firms must at all times look to the relevant legislation, regulatory requirements, standards and guidance to ascertain
their statutory obligations”.
2. In respect of the process around the drafting of the SLAs themselves, the Central Bank states that it is important that RFs consider whether they have “appropriate governance
arrangements around the development, signoff and maintenance of SLAs”. It would be important therefore, for RFs to ensure they put such a procedural document in place or
incorporate such details into their Outsourcing Policy in order to be complaint with this requirement.
1 DISCUSSION PAPER 8 – OUTSOURCING FINDINGS AND ISSUES FOR DISCUSSIONS www.matheson.com

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