On March 11, 2009, the Office of the Superintendent of Financial
Institutions Canada (OSFI) released the first revision to its
Guideline B-10, Outsourcing of Business Activities, Functions and
Processes, since December 2003. As summarized in the OSFI letter that accompanies it, the Guideline
- which sets out OSFI's expectations with respect to
outsourcing by federally-regulated entities (FREs) - is being
revised in 7 significant respects:
Section 2 of the Guideline now provides that outsourcing
arrangements obtained by the FRE "as the result of an
acquisition" are expected to comply with the Guideline at the
first opportunity, e.g. when the relevant contract, agreement or
statement of work is substantially amended, renewed or
Section 6 of the Guideline now clarifies the proper approach to
assessing the materiality of a series of related outsourcing
arrangements from a risk-management perspective. The FRE must
consider the potential influence of multiple outsourcing
arrangements with a single service provider, which although
possibly individually immaterial, could have an important aggregate
influence on the FRE.
In Section 7.2.1(g) of the Guideline, OSFI clarifies the
expectation that the FRE should contractually ensure that the
service provider "regularly tests its business recovery system
as it pertains to the outsourced activity, notifies the FRE of the
test results, and addresses any material deficiencies." The
FRE should be prepared to provide a summary of such test results to
OSFI on reasonable notice.
Pursuant to Section 7.2.1(h) of the Guideline, the FRE will now
receive reasonable advance notice in the event that OSFI chooses to
exercise its supervisory review/audit rights over the service
provider under Section 7. OSFI will now also share any findings
with the FRE, if appropriate.
The Guideline now incorporates a standardized template (Annex
4) for the "centralized list" of material outsourcing
arrangements that is required under Section 7.3.1. The FRE can use
the template to summarize its material outsourcing
At Section 7.3.3 of the Guideline, OSFI's expectations that
the FRE's annual review of the service provider's ability
to continue to deliver the service, in the manner expected, are
clarified to indicate that the review should be commensurate with
the level of risk involved, and should include an assessment of the
service provider's circumstances, including the use and
performance of significant subcontractors.
A number of additional changes have been made to ensure that
the wording of the Guideline reflects the recent repeal of the
requirement that OSFI's approval be obtained where the FRE
plans to maintain or process, outside Canada, information or data
relating to certain corporate, accounting and customer records.
Section 8 of the December 2003 B-10 revision has been deleted in
OSFI has expressed the opinion that the revised Guideline should
not necessitate changes to existing contracts and, accordingly, no
transition period is provided with respect to this revision.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
On February 1, 2017, the Ontario Human Rights Commission released a policy statement that seeks to clarify the type and scope of the medical information that employees need to provide to their employers to support disability-related requests for accommodation.
Throughout an employee's time with an employer, there are many occasions where the employer will be required to have the employee complete forms or other documents for third parties, or where the employer must complete forms themselves for third parties.
How do you know when an employee has quit her job? It may seem like a simple question, but the answer recently eluded an Ontario employer, who improperly took an employee's apparent resignation at face value.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).