The FCA has published a document entitled “Outsourcing in the asset management industry: Thematic project findings report”. The report contains the FCA’s findings regarding its assessment as to whether asset managers are effectively mitigating the risks in connection with outsourcing. During the assessment the FCA looked in particular at whether asset managers: (i) had adequate contingency plans in place in order to deal with a failure of their service provider (resilience); and (ii) oversaw their service provider adequately (oversight).

The FCA found that whereas resilience is improving, the effectiveness of oversight arrangements varied. As a result, the FCA recommends that asset managers:

• review and improve their contingency plans for failure of a service provider, adopting industry-led guiding principles where appropriate; and
• review the effectiveness of their present arrangements and enhance them where possible, particularly to ensure that there is sufficient internal expertise in place.

Copies of

the report = http://www.fca.org.uk/static/documents/thematic-reviews/tr13-10.pdf
and

related webpage = http://www.fca.org.uk/news/thematic-reviews/tr13-10-outsourcing-in-the-asset-management-industry