AMF Guidelines on Liquidity, Solvency, and Disclosure Requirements
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
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Trevor Howes
IFRS 17 technical advisor; AXIS actuarial modeling system expert; extensive experience in life insurance and life reinsurance, with focus on modeling, valuation, and financial reporting
Previous Article
SRB Publishes Presentations from Ninth Industry DialogRelated Articles
EC Delegated Regulation on Specialized Lending Exposures Under CRR
EC finalized the Delegated Regulation 2021/598 that supplements the Capital Requirements Regulation (CRR or 575/2013) and lays out the regulatory technical standards for assigning risk-weights to specialized lending exposures.
OSFI Consults on Minimum Qualifying Rate for Uninsured Mortgages
OSFI is proposing new minimum qualifying rate for uninsured mortgages under the Guideline B-20.
OSFI Issues Letter on ICAAP Submission and Internal Audit of BCAR
OSFI issued a letter to confirm that a formal Internal Capital Adequacy Assessment Process (ICAAP) submission is not required in 2021.
ECB Updates List of Supervised Entities in EU in April 2021
ECB updated the list of supervised entities in EU, with the number of significant supervised entities amounting to 115 as of the March 01, 2021 cut-off date.
ESMA Issues Notification Templates for STS Synthetic Securitizations
ESMA published the interim simple, transparent, and standardized (STS) notification templates for synthetic securitizations, post the recent amendments to the Securitization Regulation.
EC Agrees to Prolong Scheme to Support NPL Reduction at Greek Banks
EC has approved the prolongation of an existing Greek scheme aiming to support the reduction of nonperforming loans, or NPLs, of Greek banks on the basis that it remains free of any State aid.
EIOPA Study Examines Internal Model Market and Credit Risks Under SII
EIOPA published a report presenting the results of its yearly study on the internal modeling of market and credit risks under the Solvency II Directive, also known as SII.
EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
EBA Updates Lists of Entities for Use in Capital Calculations under SA
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
FED Proposes to Automate Bank Stock Adjustment Using Call Report Data
FED published a proposal to automate non-merger-related adjustments to member banks' subscriptions to Federal Reserve Bank capital stock.
