Document ID: chunk:federal_register_of_legislation:F2012L02223:body:0:p5
Version: federal_register_of_legislation:F2012L02223
Segment Type: other
Provision Reference: 
Character Range: 11940–14908

provider of the outsourced function will be the responsibility of the service provider, including liability for any failure on the part of the sub-contractor.

    23.         Where:

       (a)          an RSE licensee invokes its Business Continuity Plan[13] as the result of an unexpected event; or

       (b)          there is a sudden financial or operational failure of an existing service provider,

    and, as a result, enters into a new outsourcing agreement, the RSE licensee must comply with paragraphs 21 to 22 inclusive and 26 to 28 inclusive only to the extent that is reasonably possible having regard to the nature of the extreme event or sudden failure. The RSE licensee must notify APRA as soon as practicable of any such outsourcing arrangement.

APRA access to service providers
    24.         An outsourcing agreement must include a clause that allows APRA access to documentation and information related to the outsourcing arrangement. In the normal course, APRA will seek to obtain whatever information it requires from the RSE licensee; however, the outsourcing agreement must include the right for APRA to conduct on-site visits to the service provider if APRA considers this necessary in its role as prudential supervisor. APRA expects service providers to cooperate with APRA's requests for information and assistance. If APRA intends to undertake an on-site visit to a service provider, it will normally inform the RSE licensee of its intention to do so.

    25.         An RSE licensee must take all reasonable steps to ensure that a service provider will not disclose or advertise that APRA has conducted an on-site visit, except as necessary to coordinate with other entities regulated by APRA that are existing clients of the service provider.

Notification requirement
    26.         An RSE licensee must notify APRA as soon as possible after entering into an outsourcing agreement, and in any event no later than 20 business days after execution of the outsourcing agreement. This notification requirement applies to all outsourcing of material business activities.

    27.         When an RSE licensee notifies APRA of a new outsourcing agreement, it must also provide a summary to APRA of the key risks involved in the outsourcing arrangement and the risk mitigation strategies put in place to address these risks. APRA may request additional material where it considers it necessary in order to assess the impact of the outsourcing arrangement on the RSE licensee's risk profile.

Offshoring – requirement for consultation
    28.         An RSE licensee must consult with APRA prior to entering into any offshoring agreement involving a material business activity so that APRA may satisfy itself that the impact of the offshoring arrangement has been adequately addressed as part of the RSE licensee's risk management framework.

    29.         If, in APRA's view, the offshoring agreement involves risks that the