We have published the findings from our review that assessed whether asset managers are effectively mitigating the risks relating to outsourcing.
We expect asset managers to act in the best interests of their customers by ensuring that the service they provide is not compromised by outsourcing activities.
Our review focused on two risks that could result in poor outcomes for customers. These were asset managers:
We have started to see improvements in planning for the failure of a service provider, such as industry-led work to set out guiding principles to help firms with their contingency planning.
We found that all asset managers who were part of our review had oversight arrangements in place to oversee their service providers, although their effectiveness varied. Where oversight of an activity was lacking, we found the main cause was insufficient internal expertise.
In light of our findings, asset managers should:
We may follow-up on this work to see whether asset managers have taken steps to make improvements.
Dear CEO letter (December 2012)
Outsourcing requirements (SYSC 8)
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