Canada

Topic: Banking

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OSFI issues final versions of the capital adequacy requirements and the leverage requirements guidelines

The Office of the Superintendent of Financial Institutions (OSFI) has issued its final version of the Capital Adequacy Requirements (CAR) guideline and Leverage Requirements (LR) guideline. OSFI updates its CAR guideline periodically to ensure capital requirements reflect the underlying risks and developments in the financial industry. The LR guideline supplements this by setting out the … Continue Reading

OSFI issues final corporate governance guidelines

The Office of the Superintendent of Financial Institutions (OSFI) has issued its final version of the Corporate Governance Guideline (CGG). The CGG sets out OSFI’s expectations for boards of directors of federally regulated financial institutions (FRFIs). The CGG applies to all FRFIs other than the Canadian branch operations of foreign banks and insurance companies. The … Continue Reading

CSA confirms position on bail-in implications

The Canadian Securities Administrators (CSA) recently released two notices on the implementation and regulation of the Canadian bail-in regime, namely: CSA Staff Notice 46-309, in connection with the regulation of Bail-in Debt (as defined below); and CSA Staff Notice 81-331, in connection with the implications of the bail-in regime on investment fund issuers, subject to … Continue Reading

OSFI proposes changes to the leverage requirements guideline

The Office of the Superintendent of Financial Institutions (OSFI) has released proposed revisions to the Leverage Requirements (LR) guideline in order to align with upcoming modifications to Chapter 4 (Settlement and Counterparty Risk) and Chapter 7 (Securitization) of the Capital Adequacy Requirements (CAR) guideline. The LR set out the framework for the leverage ratio, which … Continue Reading

Implementation of the final Basel III reforms in Canada – request for comments

The Office of the Superintendent of Financial Institutions (OSFI) has released a discussion paper on the proposed implementation of the final Basel III reforms in Canada. The reforms were published in December 2017 and, in summary, seek to: Enhance credibility in the calculation of risk-weighted assets. Improve the comparability and transparency of banks’ capital ratios. … Continue Reading

OSFI confirms higher capital for Domestic Systemically Important Banks

The Office of the Superintendent of Financial Institutions (OSFI) has provided greater transparency to the market surrounding the Domestic Stability Buffer (the DSB) currently held by Domestic Systemically Important Banks (D-SIBs) in a bid to guard against Pillar 2 risks associated with systemic vulnerabilities.  OSFI revealed last week that D-SIBs must hold an extra cushion, … Continue Reading

TLAC – OSFI issues final disclosure guidelines

Last week, the Office of the Superintendent of Financial Institutions (OSFI) issued its final guideline on total loss absorbing capacity (TLAC) disclosure requirements for Canadian domestic systemically-important banks (D-SIBs). The new guideline sets out the format, timing and location of the TLAC disclosure requirements, among other things. The new guideline further requires that D-SIBs begin … Continue Reading

Covered bonds in Canada – an increased regulatory stance

The Office of the Superintendent of Financial Institutions (OSFI), the federal financial institutions prudential regulator, recently addressed the issue of a cap on issuance of covered bonds which presently stands at 4% of a bank’s total assets. OSFI is now taking a hard look at this limit and is doing so in the context of … Continue Reading

OSFI revises transaction instructions for regulatory approvals

The Office of the Superintendent of Financial Institutions (OSFI), the federal financial institutions prudential regulator, has posed seven revised transactions instructions on its website. Transaction instructions set out OSFI’s requirements for information and documents in connection with applications for approval under federal financial institutions statutes, and may include guidance from OSFI related to the application. … Continue Reading

FCAC and IIROC to join forces

On September 12, 2017, the Financial Consumer Agency of Canada (FCAC) and the Investment Industry Regulatory Organization of Canada (IIROC), two otherwise independent regulators, announced that they signed a memorandum of understanding (MOU) to coordinate regulatory oversight and strengthen consumer/investor protection. We have made inquiries and have learned that the MOU is not publicly available; … Continue Reading

FCAC bulletin on investigations of unauthorized credit and debit transactions

The Financial Consumer Agency of Canada (FCAC) has released a new bulletin to remind federally regulated financial institutions (FIs) of its expectations regarding unauthorized credit and debit card transactions. Thorough investigations expected The FCAC expects FIs to thoroughly investigate the circumstances before finding a cardholder liable for an alleged unauthorized transaction.  The key question is whether circumstances … Continue Reading

Transition period for new AML ID verification methods extended

Transition period extended The Government of Canada has extended the transition period for the new methods for verification of identity under the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations until January 23, 2018.  The new ID verification methods came into effect as of June 30, 2016 but a transition period was established to give … Continue Reading

Does offshore banking confidentiality hold up in Canadian courts?

The April 2016 “Panama Papers” leak highlighted the attraction for transnational actors of the confidentiality available in certain offshore financial centres. Some of these jurisdictions have laws that make it a criminal offence for banks to disclose information about their clients, providing powerful protection for individuals and corporations who wish to keep their financial affairs … Continue Reading

Federal budget 2017 financial services highlights

The Government tabled Budget 2017 on March 22.  The financial services proposals are aimed at the following: Greater resiliency for the Canadian financial sector; A modernized deposit insurance framework that continues to protect the deposits of Canadians and promote financial stability; and Strengthened ability for Canada to combat money laundering and terrorist financing. Financial Sector … Continue Reading

FCAC bulletin reinforces expectations regarding express consent

The Financial Consumer Agency of Canada (FCAC) issued a statement and a new compliance bulletin in response to recent news reports related to allegations that certain employees of banks were pressured to upsell to consumers to meet unrealistic sales targets and keep their jobs. FCAC compliance bulletin B-5 – consent for new products or services (the Bulletin) states … Continue Reading

The saga of the unnamed bank: FinTRAC issues a statement

In April 2016, Canadian news media reported that the Financial Transactions Reports Analysis Centre (FinTRAC) had levied a penalty of over $1 million against an unnamed Canadian bank for certain violations of its anti-money laundering requirements.  Since then, FinTRAC has continued to face criticism from the public and the media for its decision to withhold … Continue Reading

Financial services regulatory: 7 developments to watch in 2017

Happy 2017! Financial services regulation continued to be busy in Canada in 2016. We have prepared this shortlist of pending changes, developments and consultations to watch as we start 2017. 1.  New draft OSFI guideline: enterprise-wide model risk management OSFI released a new draft Guideline E-23 – Enterprise-Wide Model Risk Management on December 21, 2016. … Continue Reading

Bank Act financial consumer protection amendments delayed

The proposed amendments to the Bank Act (Canada) (the Amendments) which would add a Financial Consumer Protection Framework (the Framework) (described in our recent post) will be withdrawn from Bill C-29. Bill C-29 passed third reading in the House of Commons and is currently before the Senate of Canada. News reports indicate that the Finance Minister, Bill Morneau, agreed to remove … Continue Reading

Bank Act Financial Consumer Protection Framework passes third reading in House of Commons

Bill C-29, Budget Implementation Act, 2016, No. 2, (Bill C-29) passed third reading in the House of Commons on December 6, 2016. Once passed by the Senate and brought into force, Bill C-29 will amend the Bank Act (Canada) (the Bank Act) to enact the long awaited Financial Consumer Protection Framework that was promised by … Continue Reading

Government announces further mortgage restrictions

The federal government has announced further restrictions that will make it more difficult for some borrowers to get mortgage loans and make it more costly for foreigners to speculate in the real estate market. Under current rules, a federally regulated mortgage lender may not make a loan on the security of a residential property if … Continue Reading

FATF Mutual Evaluation of Canada report released

On September 15th, the Financial Action Task Force (FATF) released its Mutual Evaluation Report (Report) of Canada’s measures for combatting anti-money laundering (AML) and the financing of terrorism (CFT).  FATF is an international organization originally formed by the G-7 countries in 1989.  FATF has developed 40 Recommendations for measures that countries should take to combat … Continue Reading

Targeted Review of Deposit Insurance Launched

On September 16th, the Department of Finance announced the launch of a public consultation on the deposit insurance regime for banks, federally regulated trust and loan companies and certain provincially regulated institutions.  There is no indication when the Government proposes to complete its review but comments are requested by November 30th. The Consultation Paper states … Continue Reading

Government to Conduct Further Assessment on Interchange Fees

The Minister of Finance issued a statement on September 14th on the status of each of Visa and MasterCard’s commitments to reduce the fees merchants are charged to accept credit cards (Interchange Fees).  The statement acknowledges the independent audit findings of both Visa and MasterCard indicating that they have each met their commitments to reduce … Continue Reading
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