ASIC flags risks in offshore outsourcing
ASIC has flagged significant risks associated with offshore outsourcing, urging AFSLs and responsible entities of managed investment schemes to address governance gaps. A review found that risk management practices varied widely, with some entities failing to adequately supervise critical functions outsourced to offshore providers.
The regulator emphasised that licensees are ultimately responsible for their obligations, even when they are outsourced. This includes managing key risks such as cyber security, data breaches, and operational disruption. The review highlights that a failure to properly oversee these offshore arrangements can expose consumers and investors to harm, a concern supported by recent enforcement actions against companies for cybersecurity and governance failures. Read more here.
Policies affected: Outsourcing/Offshoring policies, procedures or checklists
Organisations affected: AFSL holders
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