OSFI to Implement Operational Risk Capital Rules for Banks in Q1 2022
OSFI decided to move domestic implementation of the revised Basel III operational risk capital requirements from the first quarter of 2021 to the first quarter of 2022. This revised implementation date coincides with the implementation of the final Basel III credit risk and leverage ratio requirements. OSFI has made this announcement in a letter addressed to banks, bank holding companies, and federally regulated trust and loan companies.
The re-alignment provides several benefits including additional time to clarify reporting instructions, with the objective of ensuring a consistent interpretation of the revised requirements. It also aligns with the expected implementation date of the revised capital and liquidity requirements for small and medium-size institutions. Deposit-taking institutions that previously used the Advanced Measurement Approach, or AMA, for operational risk capital purposes should continue to use the standardized approach until the first quarter of 2022. Other institutions should also continue to use the approach they are currently using (either Standardized or Basic Indicator) until the first quarter of 2022.
Further consultation related to the 2022 domestic implementation of the final Basel III reforms, through the OSFI Capital Adequacy Requirements (CAR) for operational risk and credit risk and the leverage requirements guideline, will take place in late spring 2020. This consultation, in addition to the consultative document on small and medium-size institution capital and liquidity requirements, will provide more detail on the expected operational risk capital requirements that will apply to deposit-taking institutions starting in 2022.
Related Link: News Release
Keywords: Americas, Canada, Banking, Operational Risk, Basel III, Reporting, Capital Adequacy Requirements, OSFI
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
OSFI Consults on Instruction Guide for Termination of Pension PlanRelated Articles
EBA Finalizes Remuneration Standards for Investment Firms in EU
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
ECA Recommends Actions to Enhance Resolution Planning for Banks
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE Publishes Key Elements of the 2021 Stress Testing for Banks in UK
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA Proposes Rules on Identity Verification of Depositor Protection
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB Publishes Work Program for 2021
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA Issues Update on Move to New Data Collection Platform
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank Publishes Derivation Rules for Reporting by Banks
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED Revises Capital Planning and Stress Testing Requirements for Banks
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB Releases Results of Bank Lending Survey for Fourth Quarter of 2020
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs Publish Reporting Templates for Financial Conglomerates
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.