Canada

Topic: Banking

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Basel Committee approves annual G-SIBs assessment, updates workplan to evaluate post-crisis reforms

On 25 September 2020, the Basel Committee on Banking Supervision (Basel Committee) issued a press statement following its meeting on 14, 18 and 25 September 2020 to take stock of COVID-19 risks to the global banking system and related vulnerabilities. Key points in the press statement include: The Basel Committee reiterates its previous guidance that … Continue Reading

Data Breaches and Anti-Money Laundering Consequences – An Overview

When an entity (Affected Entity) experiences a data breach incident (Breach Incident), it is instantly faced with a number of issues that it must address with urgency. Among such, an Affected Entity must manage crucial regulatory compliance obligations that may be triggered by the Breach Incident. The most obvious of these obligations arise under the … Continue Reading

OSFI rules on Limited Recourse Capital Notes

The Office of the Superintendent of Financial Institutions (OSFI) has recently issued a ruling regarding the regulatory treatment of Limited Recourse Capital Notes (LRCNs) which are currently being adopted as new financial instruments by Canadian banks.  An LRCN is a subordinated note issued by a federally regulated financial institution (FRFI) that is secured by preferred … Continue Reading

FSB and Basel Committee set out supervisory recommendations for benchmark transition

On 9 July 2020, the Financial Stability Board (FSB) and the Basel Committee on Banking Supervision (Basel Committee) issued a report on supervisory issues associated with benchmark transition. The report includes insights on remaining challenges to LIBOR transition based on surveys undertaken by the FSB, the Basel Committee and the International Association of Insurance Supervisors. … Continue Reading

Basel Committee publication: Targeted revisions to the CVA risk framework

On 8 July 2020, the Basel Committee on Banking Supervision (Basel Committee) published a paper setting out the final targeted revisions to the credit valuation adjustment (CVA) risk framework. In January 2019 the Basel Committee published the revised market risk framework. In November 2019 the Basel Committee consulted on a set of targeted final revisions … Continue Reading

OSFI sets expectations on the use of Pillar II capital buffers for banks during the pandemic

The Office of the Superintendent of Financial Institutions (OSFI) recently addressed a letter to deposit taking institutions (DTIs), including domestic systemically important banks (D-SIBs) and small and medium-sized banks (SMSBs), regarding the use of Pillar II capital buffers during the COVID-19 pandemic. The key takeaways are below: Capital expectations framework for DTIs. The current DTIs … Continue Reading

OSFI proposes further measures to help resilience amid pandemic

In our earlier post, we discussed the Office of the Superintendent of Financial Institutions’ (OSFI) newly proposed measures intended to support federally regulated financial institutions and improve the stability of the Canadian economy and financial system in the face of challenges posed by the COVID-19 pandemic. OSFI has recently published additional announcements for sector-specific measures … Continue Reading

FINTRAC revises expectations for reporting entities amid pandemic

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) recently provided guidance (the Guidance) to reporting entities in connection with their continuing obligations during the COVID-19 pandemic. In the Guidance, FINTRAC acknowledged that reporting entities may have to reassign and reprioritize their internal resources in response to the pandemic, which may in turn affect … Continue Reading

OSFI proposes measures to support resilience amid pandemic

The Office of the Superintendent of Financial Institutions (OSFI) has announced measures intended to support federally regulated financial institutions (FRFIs) and improve the stability of the Canadian economy and financial system in response to challenges posed by the COVID-19 pandemic and current market conditions: Domestic Stability Buffer set to 1.00% of risk weighted assets. Originally, … Continue Reading

Open Banking in Canada: part 2 – further regulatory insights

Further to our previous post which introduces the concept of open banking and how Canada is approaching it, the Department of Finance, through its Advisory Committee on Open Banking (the Committee), has completed its initial review (the First Phase Review) which focused on: (i) the ways in which open banking would provide meaningful benefits and … Continue Reading

OSFI delays implementation of Basel III operational risk capital requirements

The Office of Superintendent of Financial Institutions (OSFI) stated recently that it is in the process of revising its capital requirements for operational risk applicable to deposit-taking institutions (DTIs) to reflect the final Basel III revisions published by the Basel Committee on Banking Supervision in December 2017. OSFI confirmed that the implementation of the revised … Continue Reading

FINTRAC to publicly name violators of anti-money laundering rules

FINTRAC to publicly name violators of anti-money laundering rules Recently, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) published certain changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) requiring FINTRAC to make public all administrative monetary penalties (AMPs) imposed. These changes are reflected in FINTRAC’s AMP policy (AMP … Continue Reading

OSFI proposes changes to the Foreign Bank Branch Deposit Requirement

The Office of the Superintendent of Financial Institutions (OSFI) has proposed revisions to Guideline A-10, the “Foreign Bank Branch Deposit Requirement”, (the Guideline), formerly known as the Capital Equivalency Deposit.  The revisions to the Guidelines address regulatory standards for authorized foreign banks’ minimum deposit to be held in trust. The revisions include changes to the Guideline … Continue Reading

Open Banking around the world | A global comparative guide

The UK continues to be the global pioneer in open banking through the implementation of the EU PSD2 and the CMA open banking initiative. However, through regulatory reforms and/or market-led initiatives, many jurisdictions are now catching up. Working with our colleagues across the globe, we have produced a comparative guide to open banking as part … Continue Reading

New oversight framework proposed for Canada’s payments system

In the 2019 federal budget, the government has proposed new legislation to help implement a new retail payments oversight framework that will enable retail payment services providers (PSPs) to continue to offer innovation in services, while remaining reliable and safe. The global payments landscape is rapidly changing as innovative technologies are challenging traditional payments systems. … Continue Reading

Open Banking in Canada – current regulatory insights

Open banking is a safe and secure technology that allows consumers to enable banks to disseminate their information to third party services providers.  As a concept, open banking is more developed in other countries such as the United Kingdom (the UK) and Australia.  In Canada, the concept is steadily evolving and is still being deliberated … Continue Reading

Bill C-86 Strengthens Bank Act’s Consumer Protection Regime

In March 2018, the Financial Consumer Agency of Canada released findings of their review of domestic bank retail sales practices, concluding that banking culture focused on selling products and services increased the risk that consumer interests were not being given proper weight. Following release of these findings, Bill C-86 was introduced and received royal assent … Continue Reading

OSFI proposes changes to the Liquidity Adequacy Requirements

The Office of the Superintendent of Financial Institutions (OSFI) has issued proposed revisions (the Revisions) to certain chapters of the Liquidity Adequacy Requirements (LAR) guidelines. The LAR set out the framework that Canadian deposit-taking institutions (DTIs) must follow to mitigate the risk of a stressed environment leading to insufficient liquidity. The Revisions are a response … Continue Reading

Emerging Fintech innovation trends propelled by a global initiative

The Global Financial Innovation Network (GFIN), a network of 29 state financial sector regulators and supervisors committed to supporting financial innovation in the interests of consumers, including Quebec’s Autorité des Marchés Financiers (AMF) and the Ontario Securities Commission, has announced the launch of a pilot phase of cross-border testing and knowledge sharing initiative for Fintech … Continue Reading

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
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