1.The policy shall set out an appropriate and proportionate process for selecting and assessing the prospective ICT third-party service providers taking into account whether or not the ICT third party service provider is an intragroup ICT service provider, and shall require that the financial entity assesses, before entering into a contractual arrangement, whether the ICT third-party service provider:
a)has the business reputation, sufficient abilities, expertise and adequate financial, human and technical resources, information security standards, appropriate organisational structure, risk management and internal controls and, if applicable, the required authorisations or registrations to provide the ICT services supporting the critical or important function in a reliable and professional manner;
b)has the ability to monitor relevant technological developments and identify ICT security leading practices and implement them where appropriate to have an effective and sound digital operational resilience framework;
d)is located, or processes or stores the data in a third country and, if this is the case, whether this practice affects the level of operational or reputational risks or the risk of being affected by restrictive measures, including embargos and sanctions, that may impact the ability of the ICT third-party service provider to provide the ICT services or the financial entity to receive those ICT services;
e)consents to contractual arrangements that ensure that it is effectively possible to conduct audits at the ICT third-party service provider, including onsite, by the financial entity itself, appointed third parties, and competent authorities;
f)acts in an ethical and socially responsible manner, respects human rights and children’s rights, including the prohibition of child labour, respects applicable principles on environmental protection, and ensures appropriate working conditions.\
2.The policy shall specify the required level of assurance concerning the effectiveness of ICT third-party service providers’ risk management framework for the ICT services supporting critical or important functions to be provided by an ICT third-party service provider. The policy shall require that the due diligence process includes an assessment of the existence of risk mitigation and business continuity measures and of how their functioning within the ICT third-party service provider is ensured.
3.The policy shall determine the due diligence process for selecting and assessing the prospective ICT third-party service providers and shall indicate which of the following elements are to be used for the required level of assurance on the ICT third-party service provider’s performance:
4.Financial entities shall ensure an appropriate level of assurance on the ICT third-party service provider’s performance, taking into account the elements listed in paragraph 3, points (a) to (e). Where appropriate, more than one element listed in those points shall be used.