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Eversheds Sutherland advises on regulatory and supervisory issues relating to outsourcing and third party relationships

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    Eversheds Sutherland has completed the final stage of a submission to FSB on a proposal to introduce new regulations governing outsourcing in global capital markets.

    On Friday 8 January 2021, Eversheds Sutherland concluded a two month consultation process regarding the Financial Stability Board’s (FSB) recent discussion paper on “Regulatory and Supervisory Issues Relating to Outsourcing and Third-Party Relationships” (Discussion Paper). 

    In November 2020, Eversheds Sutherland was appointed by the Global Financial Markets Association (GFMA) to work alongside its three trade associations – AFME, ASIFMA and SIFMA – to advise on and help prepare a consolidated response to the Discussion Paper, including advising its membership of approximately 80 global banks, securities dealers and market makers. This appointment follows Eversheds Sutherland’s previous engagement with the GFMA in relation to the outsourcing consultation paper recently issued by the International Organisation of Securities Commissions (IOSCO).

    The Discussion Paper identifies a number of issues and challenges. For instance, financial institutions are required to ensure that their contractual agreements with third parties grant to them, as well as to supervisory and resolution authorities, appropriate rights to access, audit and obtain information from third parties. These rights can be challenging to negotiate and exercise, particularly in a multi-jurisdictional context. The management of sub-contractors and supply chains is another challenge that was highlighted in the context of financial institutions’ response to COVID-19.

    The global Eversheds Sutherland team is led by Simon Gamlin, Partner and head of the firm’s technology group and Rhys McWhirter, Of Counsel (Hong Kong). The team comprises Partners Craig Rogers (UK), Michael Steinig (US), Vincent Denoyelle (France), Dr. Lutz Schreiber (Germany) and Associate Philip Chow (Hong Kong).

    Rhys McWhirter, said:

    “This is another exciting opportunity to work alongside ASIFMA and draw upon our collective knowledge, experience and technical capability across Eversheds Sutherland’s global technology and outsourcing team to help shape the global standards applying to financial firms undertaking outsourcing transactions.”

    For further information on the FSB consultation paper and proposals, please see here.

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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