Regulatory notification and approval of outsourcing transactions

Jurisdiction

What industry sectors require regulatory notification or approval of outsourcing transactions?

What are the time limits for notification/applications for approval?

Australia

The Australian Prudential Regulatory Authority (APRA) regulates regulated institutions that is (in respect of financial services):

• Authorised deposit taking institutions.

• General insurers.

• Life companies.

Regulated Institutions must notify the APRA as soon as possible after entering the agreement to outsource a material business activity (and at least within 20 days).

Regulated institutions must consult with APRA before entering into an outsourcing agreement with an offshore service provider.

Austria

Financial services under the Banking Act (BWG) and the Securities Supervision Act (WAG).

No prior notification or approval requirement.

Telecommunications.

The Telecommunications Authority must approve of the transfer of licences previously granted.

Insurance services.

Approval by the Financial Services Agency.

Investment services.

Notification to the Financial Services Agency (without delay).

Services under the Austrian Act on Pension Funds.

Notification to the Financial Services Agency (without delay).

Brazil

None.

None.

Canada

Canada does not have any mandatory notification requirements.

Canada does not have any mandatory notification requirements.

China

Banks must notify CBRC of the outsourcing of certain types of activities.

• No statutory time limits.

• Generally, notification should be made before entering into a binding outsourcing agreement.

Insurance companies must notify CIRC of the outsourcing of certain types of activities.

• No statutory time limits.

• Generally, notification should be made before entering into a binding outsourcing agreement.

A 'seller of fund shares' must report to CSRC the commencement or change to any outsourcing services.

• No statutory time limits.

All industries. Any contract for the import or export of technology to/from the PRC must be registered with MOFCOM.

• 60 days from the effective date.

Finland

Financial services.

Notification to the Financial Supervisory Authority prior to the start of providing the services, the end of those services and any significant changes to those services.

Personal data processing.

Notification to the Data Protection Ombudsman 30 days prior to the start of data processing or the transfer of personal data.

France

Financial services.

Variable on a case by case basis.

Public procurement.

Variable on a case by case basis.

Germany

Investment Services Companies: no German Federal Supervisory Authority (BaFin)www.bafin.de) notification for general outsourcing but there is notification for outsourcing portfolio administration for private clients.

General outsourcing: no timelines, prior notification for outsourcing of portfolio administration for private clients.

Capital Investment Companies: BaFin notification of existing outsourcing arrangements.

Outsourcing agreements with other insurance companies: effective with notification.

(Direct) Insurance Companies: prior BaFin notification for outsourcing agreements of functions, termination.

Outsourcing agreements with other companies/suppliers: effective after three months. Termination: immediate notification required.

Address dealers, marketing and research companies: notification to data protection authority.

Notifications before commencement of automated data processing.

India

Generally, there is no specific notification required for conducting an outsourcing transaction.

Generally, there is no specific notification required for conducting an outsourcing transaction.

Ireland

The following must be notified in advance to, and clearance obtained from, the Central Bank of Ireland (CBI):

• Material outsourcing of financial services.

• Outsourcing of fund administration services.

No formal timelines are specified. However, any notification should be made in sufficient time to allow the CBI to consider the outsourcing in advance of its proposed effective date.

Italy

Concentrations: Italian Anti-trust Authority.

Notification in advance: within 30 days of filing the Anti-trust Authority may commence an investigation.

Trade unions must be notified of a transfer of business or of a relevant branch.

At least 25 days before a binding agreement is concluded.

Insurance companies: ISVAP.

Varies, for example, for essential and/or significant activities: at least 45 days before agreement is concluded.

Banks and financial services: Bank of Italy.

Notification in advance.

Telecommunications: Ministry of Economic Development.

Notification in advance: within 60 days of filing the Ministry of Economic Development can refuse the authorisation.

Japan

No notification or approval is required for outsourcing transactions in Japan (other than any required licence or approval to conduct the outsourced business).

Not applicable.

Luxembourg

Financial services.

Approval must be obtained before the date of the implementation of the concerned outsourcing.

Personal data processing.

When notification is made, an acknowledgement of receipt is sent by the CNPD generally within one month. Written authorisation must be received before implementing the processing. This generally takes between three and six months.

Russian Federation

General industry: no regulatory notifications or approval.

None.

Financial services: must comply with civil law and Bank of Russia (CBR) rules.

None.

South Africa

• Financial services (South African Reserve Bank (SARB)).

• Telecommunications (Independent Communications Authority of South Africa (ICASA)).

• Mining (Department of Minerals and Energy).

• Insurance (Financial Services Board/Registrar).

• Prior notification required.

• Licences and approvals required to provide electronic communications services or network services.

• The supplier must not violate the terms of the customer's mining licence.

• Registrar must be notified before entering into an outsourcing agreement. There is an ongoing duty to notify the Registrar of any changes to the outsourcing.

Sweden

Financial services.

Notification to the SFSA of an outsourcing in the financial sector must take place in advance (that is, before the signing of the outsourcing agreement).

Telecommunications.

An outsourcing of the provision of a public telecommunications network, or the provision of publicly available electronic communication services, must be notified to the SPTA before the service begins.

Switzerland

Financial services.

Courtesy notifications should be considered for material outsourcing transactions.

Insurance.

Notification must be made within 14 days after the signing date of the outsourcing agreement.

Turkey

Banking sector.

Notification is required to the Banking Regulation and Supervision Agency (BRSA) within three months of the commencement of the service.

UK (England & Wales)

Financial Services. FSA-regulated firms must give notice to the FSA before entering into, or significantly changing, a material outsourcing arrangement.

No notice period is specified (in practice, the FSA expects sufficient advance warning to permit reasonable discussion of the outsourcing arrangement).

United States

Generally, no regulatory approvals are necessary for outsourcing transactions in any industry sector. However, a public reporting company that files periodic reports under the Securities Exchange Act must disclose the terms of any 'material definitive agreement' not made in the ordinary course of a company's business.

A material agreement must be filed within four business days of that agreement being entered into.