In mid-November, the Financial Conduct Authority (“FCA”) usefully published proposed guidance for firms outsourcing to the cloud. The report is available here.
At this stage, the FCA has requested comments. The consultation period ends in February. The final report and proposals after the consultation period ends.
For some time, customers have been grappling with whether regulations cut across their ability to adopt cloud solutions. This has also hampered suppliers – clearly it is difficult to design a clear offering which seeks to be compliant while there is a lack of clarity. Though, nevertheless, a number of suppliers have been developing and licensing cloud services which seek to address regulatory concerns for firms subject to financial services regulation. The main problems being around ability to ensure the firms still have some control, clarity over location of relevant data and how the cloud solution is made up of potential subcontractors.
The FCA has stated that they “see no fundamental reason why cloud services (including public cloud services) cannot be implemented, with appropriate consideration” while also complying with their rules and regulations.
Usefully, the proposed guidance there is a check list of the issues that need to be considered for customers which is helpful to suppliers in considering key issues which they will need to address when facing this market and when drawing up their contracts.
Clearly, if this is a market you are in or wish to move into, it will be sensible to consider whether to input into the consultation and influence the results. It is useful to consider the draft guidance now including whether this might lead you to tailor your services and/or contract and, of course, to do the same when the final guidance is published.