General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
October 30, 2018

OSFI published the final version of the leverage requirements guideline and the capital adequacy Requirements (CAR) guideline for implementation in the first quarter of 2019. The main revisions relate to the domestic implementation of the standardized approach to counterparty credit risk (SA-CCR), capital requirements for bank exposures to central counterparties (CCPs), and the securitization framework. The changes become effective on November 01, 2018 for institutions with an October 31 year-end and on January 01, 2019 for institutions with a December 31 year-end.

CAR Guideline. In addition to the above changes, OSFI has clarified the capital treatment for right-of-use assets resulting from the adoption of IFRS 16, beginning January 01, 2019. This treatment will become effective for institutions on their adoption of IFRS 16. Moreover, the guideline includes the changes to the capital floor that were communicated to industry in January 2018. OSFI has also removed the Credit Valuation Adjustment (CVA) phase-in and other transitional arrangements that conclude at the end of 2018. The guideline now lists Kroll Bond Rating Agency Inc. as an eligible external credit assessment institution (ECAI) for capital purposes, which became effective on July 06, 2018. Finally, OSFI has provided clarifications throughout the Guideline in response to questions received from the industry as part of the regular annual updates. The attached table in Annex 1 summarizes comments received and provides an explanation of how the comments have been addressed in the guideline.

Leverage Requirements Guideline. The leverage requirements guideline now incorporates the standardized approach to counterparty credit risk (SA-CCR) for calculating derivatives exposures. This approach will replace the Current Exposure Method for computing counterparty credit risk exposure amounts for derivatives. The new method will align with the implementation of SA-CCR under Chapter 4 of the CAR guideline in the first quarter of  2019. The revised leverage requirements guideline also includes changes to the treatment of securitized assets that align with revisions to the operational requirements for recognition of significant risk transfer in Chapter 7 of the CAR guideline. OSFI has also aligned treatment of the credit conversion factors for off-balance sheet securitization exposures with those included under revisions to Chapter 7 of the CAR guideline. The attached table in Annex 1 summarizes comments received and provides an explanation of how the comments have been addressed in the guideline. 

The December 2017 Basel III reforms include revisions to the Basel III leverage ratio framework, including a buffer for global systemically important banks (G-SIBs) and other technical refinements to the leverage ratio exposure measure. OSFI will consider these revisions separately as part of the domestic implementation of the Basel III reforms and will consult stakeholders as part of the consultation process for any future changes to the leverage requirements guideline. 


Related Links

Effective Date: November 01, 2018/January 01, 2019 (depending on fiscal year-end)

Keywords: Americas, Canada, Banking, Basel III, CAR Guideline, Leverage Requirements Guideline, Securitization Framework, SA-CCR, Leverage Ratio, Capital Floor, OSFI

Related Articles

EBA Single Rulebook Q&A: Fourth Update for March 2019

EBA published answers to five questions under the Single Rulebook question and answer (Q&A) updates for this week.

March 22, 2019 WebPage Regulatory News

ECB Updates Validation Checks and List of Identifiers Under AnaCredit

ECB updated the AnaCredit validation checks (Version 1.4) and the list of national identifiers (version 2.4) for AnaCredit reporting.

March 21, 2019 WebPage Regulatory News

BCBS Publishes Results of the Basel III Monitoring Exercise

BCBS published results of the Basel III monitoring exercise based on data as of June 30, 2018.

March 20, 2019 WebPage Regulatory News

EBA, FCA, and PRA Agree on MoU Template for Supervisory Cooperation

EBA, FCA, and PRA announced that they have agreed on a template for the Memorandum of Understanding (MoU) that sets out the expectations for supervisory cooperation and information-sharing arrangements between UK and EU/European Economic Area national authorities.

March 20, 2019 WebPage Regulatory News

HKMA Publishes CoP on Loss-Absorbing Capacity Requirements of Banks

HKMA issued, in relation to the Financial Institutions Resolution (Loss-Absorbing Capacity Requirements—Banking Sector) Rules (LAC Rules) a chapter of a code of practice (LAC CoP) under section 196 of the Financial Institutions Resolution Ordinance (FIRO).

March 20, 2019 WebPage Regulatory News

EBA Publishes Reports Monitoring the Implementation of Basel III in EU

EBA published two reports measuring the impact of implementing the final Basel III reforms and monitoring the implementation of liquidity measures in EU.

March 20, 2019 WebPage Regulatory News

BCBS Publishes Results of Survey on Proportionality in Bank Regulation

BCBS published a report presenting the results of a survey conducted on proportionality practices in bank regulation and supervision.

March 19, 2019 WebPage Regulatory News

US Agencies Adopt Interim Rule to Facilitate Transfers of Legacy Swaps

US Agencies (FCA, FDIC, FED, FHFA, and OCC) are adopting and inviting comments on an interim final rule.

March 19, 2019 WebPage Regulatory News

EBA Updates List of Other Systemically Important Institutions in EU

EBA updated the 2018 list of other systemically important institutions (O-SIIs) in EU. The list also reflects the additional capital buffers that the relevant authorities have set for the identified O-SIIs.

March 19, 2019 WebPage Regulatory News

HKMA Expects Banks to Manage Risks Related to Crypto-Asset Exposures

HKMA issued a statement announcing that it expects authorized institutions to take note of the BCBS statement on crypto-assets and its prudential expectations.

March 18, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2780