Nicosia, Cyprus. The Cyprus Securities and Exchange Commission said it has adopted European guidelines on outsourcing to cloud service providers and issued a reminder on updated stress test rules for money market funds.
Two circulars outline cloud outsourcing and fund management requirements
CySEC said the developments were set out in two separate circulars addressing cloud outsourcing arrangements for certain depositaries and requirements for fund managers.
Guidelines apply to specific depositaries not covered by DORA
In its first circular, CySEC said it has adopted the latest European standards for outsourcing to cloud service providers for specific entities operating in Cyprus’ investment sector.
The guidelines are addressed to depositaries of alternative investment funds and depositaries of collective investment schemes (UCITS), in cases where these depositaries are not already covered by the Digital Operational Resilience Act (DORA).
Scope narrowed due to DORA framework
CySEC said the scope of the rules has been revised because DORA now governs digital operational resilience for most financial entities across the European Union.
It said previous cloud outsourcing standards no longer apply to financial entities that are already captured by DORA, and that the revised guidelines focus on certain depositaries that remain outside the scope of that legislation.
Requirements unchanged, application narrowed
CySEC said the revision does not change the requirements but narrows their application to ensure they remain relevant to the entities still covered.
ESMA framework aims for consistent EU supervision
CySEC said the standards were issued under the founding regulations of the European Securities and Markets Authority (ESMA) to support consistent and effective supervisory practices across the EU.
It said the guidelines are intended to support a uniform application of regulatory requirements when a financial firm moves its data or services to the cloud.
How will the revised cloud outsourcing guidelines affect depositaries in Cyprus that are not covered by DORA?