There are a variety of reasons why financial firms choose to partner with external third-party service providers (“TPSPs”) for the performance of essential tasks, rather than performing such tasks internally. Such reasons often include, but are not limited to, the financial firm’s experience in performing certain tasks, cost/time restrictions and common industry practice. Regardless as to the impetus for these relationships, regulators require financial firms to conduct initial and ongoing due diligence on TPSPs. This article will discuss the legal requirements of financial institutions to perform due diligence on TPSPs, examine recent enforcement cases where financial firms failed to properly perform such diligence and offer guidance on what financial institutions should consider when performing due diligence on service providers.
Regulatory Requirements and Risks Associated with Conducting Due Diligence on Third-Party Service providers - July 2016
Posted by
Robert Boeche on Jul 30, 2016 5:00:00 AM
0 Comments Click here to read/write comments
Topics: Risk Management, Third Party Services