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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

Beneficial ownership requirements for federally incorporated entities soon to come into effect

Starting June 13, 2019, private companies that are incorporated under the Canada Business Corporations Act (the “CBCA”) will have to establish a securities register detailing all “individuals with significant control” over the corporation (the “ISC Register”) in accordance with Bill C 86, the Budget Implementation Act, 2018, No. 2.  The purpose of the ISC Register … 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

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

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 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

Government of Canada proposes new oversight of payment service providers

Overview On July 7, 2017, the Department of Finance of the Government of Canada (the Department) released a consultation paper (Paper) regarding a proposed new oversight framework for retail payments (New Framework).  The Paper states that retail payment service providers (PSPs) other than regulated financial services providers such as banks and payment card networks are … 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

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
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