Guide to Sound Practices for Outsourcing by Investment Managers

Technological improvements and ever-growing specialisation in services are facilitating greater use of outsourcing in the industry. Regulators in some jurisdictions have issued regulations, thematic studies or advisories on how financial firms, including investment managers, should approach outsourcing. However, there are few specific reviews of outsourcing in the alternative asset management world, either in how to use outsourcing or regarding the applicable regulations. Amid this backdrop, this guide identifies suggested areas to consider when outsourcing fund management operations. This guide also refers to regulations in key jurisdictions that are relevant to outsourcing by investment managers. The main text of this guide is written to be as jurisdiction neutral as possible for it to be of the most use to manager members around the world, but examples for when requirements apply specifically in certain jurisdictions are included throughout the guide in the footnotes. This revised version from May 2019 reflects the final EBA guidelines and the March 2019 IT and cloud guidance from the CSSF.