Regulatory Alerts2020-11-02
Guidelines on Minimum Standards for the Outsourcing of Material Functions
The Central Bank of The Bahamas requires supervised financial institutions to implement comprehensive governance and risk management frameworks when outsourcing material functions, transitioning from a prior approval model to a formal notification system. Institutions must conduct periodic materiality assessments based on financial and operational impact, maintain board accountability for outsourced activities, and ensure contractual agreements guarantee the regulator’s direct access to records. The guidelines further mandate timely reporting of performance failures, strict adherence to data confidentiality and anti-money laundering obligations, and robust business continuity plans for all material outsourcing arrangements.
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