Outsourcing Policy (OSP)

Summary

This is the Jersey Financial Services Commission's Outsourcing Policy (OSP), which sets out seven Core Principles and detailed guidance governing how regulated Businesses outsource activity to Service Providers, including sub-outsourcing and group outsourcing arrangements. Compliance with the OSP is a requirement under the JFSC Codes of Practice, meaning it is not merely advisory but binding on Businesses conducting Regulated Activity in Jersey.

• Accountability: A Business remains responsible and accountable to the JFSC for any activity it outsources, regardless of who performs it.
• Fit and proper Service Providers: A Business must ensure any Service Provider performing outsourced activity is fit and proper, and maintain adequate capacity to keep monitoring this.
• Written agreement: A written Outsourcing Agreement reflecting the risk, size and complexity of the activity must be in place before the outsourced activity begins.
• Contingency planning: Suitable contingency plans must be maintained for material disruption or unexpected termination of a Service Provider's performance.
• Prior notification and No Objection: Except where the OSP provides otherwise, a Business must submit an Outsourcing Notification via myJFSC before appointing a Service Provider, and the Service Provider must not start work until the JFSC issues a No Objection.
• Notifying material changes: Any subsequent material change to an outsourcing arrangement (including termination or a new Service Provider) must be notified to the JFSC as soon as the Business becomes aware, using a Material Change to Outsourcing Notification.
• Regulatory access: Businesses must ensure nothing in a Service Provider's performance of the outsourced activity restricts the JFSC's regulatory powers over the Business or the activity.

The policy also covers specific scenarios such as sub-outsourcing to third-party sub-contractors, group outsourcing to Group Service Providers, and outsourcing of Cloud Services, and it sets out the detailed content of the Outsourcing Notification and Material Change forms in an appendix. It took effect for revised text from 1 January 2024, having last been revised on 1 December 2023.

Key obligations

• A Business must complete and upload an Outsourcing Notification and obtain a JFSC No Objection before a Service Provider starts performing Outsourced Activity, unless the OSP specifically provides otherwise.
• A Business must notify the JFSC of any subsequent material change to the Outsourced Activity as soon as it becomes aware of the change, using the Material Change to Outsourcing Notification process.
• A Business must put in place a written Outsourcing Agreement with the Service Provider before the outsourced activity starts, reflecting the risk, size and complexity of that activity.
• A Business must ensure that any Service Provider performing Outsourced Activity is and continues to be fit and proper, and maintain adequate capacity and resources to verify this on an ongoing basis.
• A Business must maintain suitable contingency plans in case a Service Provider's performance suffers material disruption or ends unexpectedly.
• A Business must ensure nothing in the Service Provider's performance of the Outsourced Activity prevents or restricts the JFSC's regulatory powers over the Business or the activity.
• A Business remains responsible and accountable to the JFSC for any Outsourced Activity, including activity performed by Sub-Contractors or Group Service Providers.

Applies to

Businesses performing Regulated Activity, Supervised Persons, Deposit-taking Business, Certified Funds business, Fund Services Business, General Insurance Mediation Business, Investment Business, Insurance Business, Money Service Business, Trust Company Business, Managed Trust Company Business, Manager of a Managed Entity, Anti-Money Laundering Services Providers

Deadlines

• 1 January 2024: Effective date from which the 1 December 2023 revision of the Outsourcing Policy applies.
• before the start of the Outsourced Activity: An Outsourcing Agreement must be in place with the Service Provider before outsourced activity begins.
• before appointment of Service Provider: Outsourcing Notification must be completed and uploaded, and a No Objection received, before a Service Provider is appointed and before it starts performing the Outsourced Activity.
• as soon as the Business becomes aware: Notification of any subsequent material change to the Outsourced Activity must be made to the JFSC.