REFLECTIONS FROM APRA Sandra Telman OUTSOURCING ROAD MAP REFLECTIONS FROM APRA Sandra Telman

OVERVIEW Prudential Standard SPS 231 Outsourcing - More than one year on – APRA’s observations regarding implementation of SPS 231. Approaches to assessing a ‘material business activity’. Outsourced agreements. Notifications and offshoring consultations with APRA. Messages from APRA.

One year on … observations regarding implementation of SPS 231 Approaches to drafting of the Outsourcing Policy. APRA’s process for assessment. Examples of better practices. We are now one year on since the introduction of the Prudential Standards. Where a Fund is part of a group, the Trustee will adopt the Group Policy. Whilst this might not apply to this audience, I thought I would nevertheless highlight that a Trustee might be relying on a Group Policy which may be generated against the requirements of Prudential Standard CPS 231 Outsourcing. The requirements of CPS 231

Approaches to materiality Definition of a ‘material business activity’. Observations regarding how a ‘material business activity’ is being assessed by trustees. Conservative approach - preferred option. Materiality of a business activity may change as service changes/expands. Risk Management - processes to review a ‘material business activity’.

Outsourced Agreements SPS 231 – opportunities to review agreements and SLAs. APRA access to service providers. Sub-contracting – APRA’s expectations.

Notifications and Offshoring Consultations Industry practices regarding notifications and offshoring consultations. APRA’s approach to notifications and offshoring consultations. Reliance on GS 007.

Messages from APRA Communication. Better practice – refer to APRA Guidance material. FAQs. APRA speeches.