What do the European Banking Authority (EBA) guidelines say about termination rights?

The outsourcing arrangement should expressly allow the possibility for the institution or payment institution (<a href="/glossarycollection/payment-institution" style="color:#48277C;" target="_blank" title="Payment Institution">PI</a>) to terminate the arrangement, in accordance with applicable law, including in the following situations: 

- where the provider of the outsourced functions is in a breach of applicable law, regulations or contractual provisions; 

- where impediments capable of altering the performance of the outsourced function are identified; 

- where there are material changes affecting the outsourcing arrangement or the service provider (e.g. sub-outsourcing or changes of sub-contractors); 

- where there are weaknesses regarding the management and security of confidential, personal or otherwise sensitive data or information; and 

- where instructions are given by the institution’s or payment institution’s competent authority, e.g. in the case that the competent authority is, caused by the outsourcing arrangement, no longer in a position to effectively supervise the institution or payment institution.