Canada

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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

FINTRAC introduces tools to assist reporting entities with AML obligations

Recently, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) announced the introduction of a set of tools (the Tools) aimed at supporting Canadian reporting entities (REs), including financial institutions, in meeting their obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act). The Tools include FINTRAC’s compliance framework, FINTRAC’s … 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

FINTRAC amplifies requirements for Suspicious Transaction Reporting

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has recently updated its industry guidance (Revised Guidance) in relation to the filing of suspicious transaction reports (STRs). The Revised Guidance reflects FINTRAC’s increased expectations as to certain key requirements for filing STRs. Reporting entities, including financial entities, are encouraged to revisit their current approach … Continue Reading

OSFI issues final guideline on asset securitization

The Office of the Superintendent of Financial Institutions (OSFI) has issued a final version of Guideline B-5: Asset Securitization (the Guideline), which sets out OSFI’s general expectations for asset securitization transactions undertaken by federally regulated insurance companies. The existing guideline on asset securitization was first published in November 2004, and does not adequately account for … 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

New client briefing note – Bill 141: the most significant changes for Quebec’s financial sector in decades

On October 5, 2017, Quebec Minister of Finance, Mr. Carlos Leitão, tabled in the National Assembly Bill 141 which will have significant effects on all institutions and intermediaries active in Quebec’s financial sector. To learn more please see our new online client briefing note.… 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

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

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

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

Ontario consults on rewards points expiry regulations

The Government of Ontario has released a public consultation regarding regulations related to the new prohibition on expiry of rewards points issued to consumers. The consultation document, which is available here, includes commentary from the Government and proposed regulatory text. Comments are due by April 28, 2017. Background On December 8, 2016, the Government passed … 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
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