Document ID: chunk:federal_register_of_legislation:F2012L02223:body:0:p4
Version: federal_register_of_legislation:F2012L02223
Segment Type: other
Provision Reference: 
Character Range: 8620–12222

has:

       (a)          prepared a business case for outsourcing the material business activity;

       (b)          undertaken a tender or other selection process for selecting the service provider;

       (c)          undertaken a due diligence review of the chosen service provider, including the ability of the service provider to conduct the business activity on an ongoing basis;

       (d)          taken into account the changes to the risk profile of the business activity that arise from outsourcing the activity and how this changed risk profile is addressed within the RSE licensee's risk management framework;

       (e)          considered how and to what extent outsourcing of the material business activity will assist the RSE licensee in meeting the adequacy of resources requirements, and how these requirements will be monitored on an ongoing basis[11];

       (f)           involved the Board, Board committee or senior manager with delegated authority from the Board, in approving the agreement;

       (g)          considered all the matters outlined in paragraph 21, that must, at a minimum, be included in the outsourcing agreement itself;

       (h)          established procedures for monitoring performance under the outsourcing agreement on a continuing basis;

       (i)            addressed the renewal process for outsourcing agreements and how the renewal will be conducted;

       (j)            developed contingency plans that would enable the outsourced business activity to be provided by an alternative service provider or brought in-house if required[12]; and

       (k)          determined that its conduct in relation to the outsourcing agreement is in the best interests of beneficiaries.

The outsourcing agreement
    20.         Each outsourcing arrangement must be contained in a documented legally binding agreement. The agreement must be signed by all parties to it before the outsourcing arrangement commences.

    21.         At a minimum, the agreement must address the following matters:

       (a)          the scope of the arrangement and services to be supplied;

       (b)          commencement and end dates;

       (c)          review provisions;

       (d)          pricing and fee structure;

       (e)          service levels and performance requirements;

       (f)           the form in which the data is to be kept and clear provisions identifying ownership and control of the data;

       (g)          reporting requirements, including content and frequency of reporting;

       (h)          audit and monitoring procedures;

       (i)            business continuity management;

       (j)            confidentiality, privacy and security of information;

       (k)          default arrangements and termination provisions;

       (l)            dispute resolution arrangements;

       (m)        liability and indemnity;

       (n)          sub-contracting;

       (o)          insurance; and

       (p)          to the extent applicable, offshoring arrangements (including through sub-contracting).

    22.         An RSE licensee that outsources a material business activity must ensure that its outsourcing agreement includes an indemnity to the effect that any sub-contracting by a service 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