Third party oversight involves monitoring external service providers to ensure they meet agreed-upon standards and regulations. This refers to the processes and controls implemented by an organization to manage and supervise the risks associated with services provided by external vendors or partners. It ensures that third-party operations, particularly those critical to the organization’s functions, comply with regulatory requirements, security standards, and contractual obligations. In the digital asset sector, this is crucial for exchanges, custodians, and other firms relying on external technology or financial services.
Context
Third party oversight is a growing area of focus in crypto news, especially as regulatory bodies emphasize supply chain risk management and operational resilience for financial entities. Discussions often concern the due diligence required for selecting and monitoring vendors that handle sensitive digital asset operations or critical infrastructure. Increased regulatory scrutiny in this area aims to mitigate systemic risks arising from dependencies on external providers, thereby enhancing overall market stability.
The DORA compliance deadline of January 17, 2025, mandates a systemic upgrade of ICT risk and third-party oversight across all EU financial operations.
CASPs must integrate a comprehensive ICT risk management framework by January 2025, fundamentally altering operational and vendor due diligence standards.
CASPs must immediately integrate DORA's systemic ICT risk management and third-party oversight into their operational architecture by the Q1 2025 deadline.
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