Review of the outsourcing policy for registered banks
Status: Closed
Timing: Changes in force from 1 October 2017.
Consultation period: 2015 - 2017
20 September 2017
The Reserve Bank has published the final revised outsourcing policy for locally incorporated registered banks as a new Banking Supervision Handbook document “Outsourcing Policy” (BS11) (PDF 252KB) dated September 2017. This follows two rounds of public consultation on the policy content and then a separate consultation on the wording of the exposure draft. The Reserve Bank has also published individual submissions to the exposure draft submission and a feedback statement which summarises submitters’ key points and the Reserve Bank’s responses.
The new policy will take effect from 1 October 2017. Affected banks will have two years before they must fully comply with the requirement to maintain a compendium of outsourcing arrangements and five years to fully comply with other aspects of the policy. The Reserve Bank expects to have a high level of engagement with banks in the interim as they work towards compliance. As of 1 October, the 2006 version of the Outsourcing Policy will be superseded. However, any bank that is subject to the Outsourcing Policy as at 30 September 2017 will continue having to meet any relevant requirements of the 2006 version of the policy for a transitional period of 5 years, as well as meet the requirements of the September 2017 version of the policy.
The revised BS11 is accompanied by other documents. These can be found in the links below.
- Final BS11 (PDF 252KB)
- Feedback statement (PDF 143KB)
- White list (PDF 63KB)
- List of Pre-Approved Functions and Services (PDF 55KB)
- Application Form A for BS11 - White list (DOCX 29KB)
- Application Form B for BS11 - List of Pre-approved Functions and Services (DOCX 27KB)
- Application Form C for BS11 - Relationship with subsidiary (DOCX 24KB)
- Application Form D for BS11 - Outsourcing arrangement made with, or through, an other related party (DOCX 40KB)
Submissions for publication (exposure draft consultation)
- AWS submission (PDF 580KB)
- Kiwibank submission (PDF 453KB)
- Joint banks submission:
- Cover letter (final) (PDF 577KB)
- Email - Joint Large Bank submission: Proposed conditions of registration exposure draft for BS11: The outsourcing policy for registered banks (PDF 831KB)
- Email - Joint Large Bank submission: The outsourcing policy for registered banks (PDF 672KB)
- Appendix A (PDF 588KB)
- Appendix B (clean) (PDF 384KB)
- Appendix B (marked-up) (PDF 559KB)
- Appendix C (PDF 210KB)
- Appendix D (PDF 226KB)
- NZBA Submission (PDF 343KB
- Minter Ellison Rudd Watts submission (PDF 81KB)
28 March 2017
The Reserve Bank has added a Word version of the exposure draft to assist submitters providing feedback.
21 March 2017
Following the release of final policy decisions on 2 February 2017, the Reserve Bank has today published an exposure draft for public consultation before the revised policy is finalised.
The Reserve Bank would like to hear of any instances where stakeholders believe the wording of the exposure draft is unclear, could be interpreted in more than one way, or differs in substance to what is set out in the final policy decisions document. The Reserve Bank will consider any concrete drafting suggestions made by submitters that are aimed at clarifying the wording of the policy. However, submitters should keep in mind that the substance of the revised policy has been finalised and that the Reserve Bank is not seeking feedback on the policy decisions that have been made.
- Consultation paper: Exposure draft for BS11: the Outsourcing Policy for Registered Banks (PDF 83KB)
- Exposure draft for consultation (PDF 164KB)
- Pre-approved functions and services for the purposes of BS11 (PDF 58KB)
- White list for the purposes of BS11: Outsourcing policy for registered banks (PDF 58KB)
2 February 2017
In 2015 and 2016, the Reserve Bank ran public consultations about proposed changes to the outsourcing policy in the Banking Supervision Handbook.
The Reserve Bank has made its final policy decisions, and today published documents outlining the final policy decisions, a summary of the submission feedback to the two consultations, and a regulatory impact statement.
- Final policy decisions: The revised policy proposals for the review of the outsourcing policy for registered banks (PDF 134KB)
- Summary of submissions on the consultation document: Revised policy proposals for the review of the outsourcing policy for registered banks (PDF 405KB)
- Regulatory Impact Statement: Revised outsourcing policy (PDF 534KB)
23 May 2016
The Bank published a second consultation document on its review of the outsourcing policy for registered banks. The consultation closed on 12 August 2016. The consultation proposed to retain the objectives of the existing policy and supports banks’ continued use of outsourcing arrangements, but made changes to some of the policy proposals in the 2015 consultation paper, including:
- Requiring banks to have a robust back-up arrangement on key functions they want to outsource;
- Retaining the existing threshold for the outsourcing policy;
- A definition of basic banking services; and
- Extending the transitional path to compliance to 5 years.
Second consultation document: Review of the outsourcing policy for registered banks (PDF 214KB)
26 August 2015
The Bank published a consultation document on potential changes arising out of the review of the outsourcing policy for registered banks. The consultation closed on 4 December 2015. The consultation proposes to retain the objectives of the existing policy and supports banks’ continued use of outsourcing arrangements, but also proposes to update the objectives to better align with Open Bank Resolution and to provide more clarity on the policy. The main changes relate to:
- requiring an explicit requirement for a separation plan for subsidiaries of foreign-owned banking groups;
- setting out a list of functions that are not relevant for the outsourcing policy or cannot be outsourced;
- setting out a clear process for obtaining non-objection from the Reserve Bank for outsourcing proposals;
- requiring a compendium of outsourced functions; and
- possibly aligning the application of the outsourcing policy with OBR.
First consultation document: Review of the outsourcing policy for registered banks (PDF 217KB)
Submissions for publication (policy consultations)
The Reserve Bank is also publishing the individual submissions received. In the list below, responses to the 2015 consultation are marked as round 1, while responses to the 2016 consultation are marked round 2.
- ACCA submission for publication round 1.0 (PDF 580KB)
- ACCA submission for publication round 1.1 (PDF 1.1MB)
- ACCA submission for publication round 2.0 (PDF 394KB)
- ANZ submission for publication round 1.0 (PDF 703KB)
- ANZ submission for publication round 2.0 (PDF 1.9MB)
- ASB submission for publication round 1.0 (PDF 1.8MB)
- ASB submission for publication round 2.0 (PDF 253KB)
- ASB submission for publication round 2.1 (PDF 479KB)
- BNZ submission for publication round 1.0 (PDF 214KB)
- BNZ submission for publication round 1.1 (PDF 7.3MB)
- BNZ submission for publication round 2.0 (PDF 328KB)
- BNZ submission for publication round 2.1 (PDF 2.7MB)
- BNZ submission for publication round 2.2 (PDF 325KB)
- BNZ submission for publication round 2.3 (PDF 178KB)
- Co-op Bank submission for publication round 1.0 (PDF 187KB)
- First Union submission for publication round 1.0 (PDF 319KB)
- Heartland submission for publication round 1.0 (PDF 1.8MB)
- IBM submission for publication round 1.0 (PDF 121 KB)
- ICBC submission for publication round 1.0 (PDF 5MB)
- Kiwibank submission for publication round 2.0 (PDF 215KB)
- Large banks joint response submission for publication round 2.0 (PDF 911KB)
- Large banks joint response submission for publication round 2.1 (PDF 416KB)
- Large banks joint response submission for publication round 2.2 (PDF 225KB)
- Large banks joint response submission for publication round 2.3 (PDF 70KB)
- Large banks joint response submission for publication round 2.4 (PDF 86KB)
- Microsoft submission for publication round 1.0 (PDF 4.8MB)
- Microsoft submission for publication round 2.0 (PDF 938KB)
- Microsoft submission for publication round 2.1 (PDF 1.8MB)
- NZBA submission for publication round 1.0 (PDF 2.1MB)
- NZBA submission for publication round 2.0 (PDF 2.7MB)
- Rabobank submission for publication round 1.0 (PDF 406KB)
- Rabobank submission for publication round 2.0 (PDF 262KB)
- Salesforce submission for publication round 1.0 (PDF 586KB)
- Salesforce submission for publication round 2.0 (PDF 486KB)
- SBS Bank submission for publication round 1.0 (PDF 746KB)
- TSB Bank submission for publication round 1.0 (PDF 749KB)
- TSB Bank submission for publication round 1.1 (PDF 358KB)
- Westpac submission for publication round 1.0 (PDF 761KB)
- Westpac submission for publication round 2.0 (PDF 2.3MB)