Refer to the exhibit.

 A centralized data policy is a policy that is applied to all devices in the overlay network, regardless of the site list. A localized data policy is a policy that is applied only to the devices that are listed in the site list. In this case, the network engineer wants to apply the policy to all devices in the overlay network, not just the specific devices in the site list. Therefore, a centralized data policy must be configured on the on-premises Cisco WAN edge router. References :=

Designing and Implementing Cloud Connectivity (ENCC) v1.0, Module 3: Implementing Cloud Connectivity, Lesson 3: Implementing Cisco SD-WAN Cloud OnRamp for Colocation, Topic: Centralized Data Policy

[Cisco SD-WAN Cloud OnRamp for Colocation Deployment Guide], Chapter: Configuring Centralized Data Policy