AMF updated the guidelines on liquidity and solvency requirements. Under liquidity requirements, AMF updated liquidity adequacy guideline for financial services cooperatives and credit unions that are not members of a federation, trust companies, and savings companies. Under solvency requirements, AMF updated the capital adequacy guideline for credit unions that are not members of a federation, trust companies, and savings companies. AMF also published the Pillar 3 disclosure requirements guideline for financial service cooperatives, credit unions that are not members of a federation, trust companies, and saving companies. In Pillar 3 disclosure requirements guideline, AMF has reproduced and adapted paragraphs from the Revised Pillar 3 disclosure requirements published by BCBS. The guidelines became effective from January 01, 2020.
Liquidity Adequacy Guideline—To provide financial institutions with consistent oversight standards that are comparable with international standards established in respect of liquidity requirements, AMF incorporates the provisions of BCBS in this guideline. These provisions contain the methodologies underlying a series of liquidity measures that will be used by AMF to assess the adequacy of liquidity of a financial institution. Thus, the use of these indicators will allow AMF to appreciate the adequacy of an institution's liquidity position. This guideline covers multiple quantitative liquidity measures including the liquidity coverage ratio (LCR), the net stable funding ratio (NSFR), a set of intraday liquidity monitoring tools, and other liquidity monitoring tools.
Capital Adequacy Guideline—This guideline sets out the capital standards on which AMF relies to assess whether a credit union or company maintains sufficient capital to ensure sound and prudent management under applicable laws. It contains the requirements pertaining to the simpler approaches under the Basel II framework, that is, the standardized approach to credit risk and the basic indicator approach and standardized approach to operational risk. It does not include specific requirements for market risk. However, if AMF considers that trading has become a more significant part of the activities of the target financial institutions, AMF may revisit the capital adequacy requirements to take into consideration the effect of market risk on the risk profile of these establishments.
Effective Date: January 01, 2020
Keywords: Americas, Canada, Quebec, Banking, Liquidity Requirements, Solvency Requirements, Liquidity Adequacy, Capital Adequacy, Pillar 3, Disclosures, AMF
Previous ArticleSRB Publishes Presentations from Ninth Industry Dialog
The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA
The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.
The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.
The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.
In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.
The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.
The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).
EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.