OSFI Proposes Pillar 3 Disclosure Guideline for Small and Medium Banks
The Office of the Superintendent of Financial Institutions (OSFI) launched a consultation on the draft Pillar 3 Disclosure Guideline for Canadian small and medium-size banks or SMSBs. The draft guideline lists the disclosures required by small and medium-size banks and their respective implementation dates. OSFI proposes to implement these requirements proportionally and plans to include the detailed tables and templates in the final guideline. The mandatory effective date for most disclosure tables and templates is expected to be sometime in 2023. The feedback period on the draft guideline ends on September 29, 2021, with the effective date for the finalized guideline expected to be November 01, 2022.
The draft guideline contains updated disclosure expectations and is intended to serve as a comprehensive source for Pillar 3 disclosure requirements for small and medium-size banks. The guideline presents five guiding principles for Pillar 3 disclosures by small and medium-size banks and specifies Basel-related disclosure requirements. OSFI proposes to implement a proportional set of Pillar 3 disclosure requirements for small and medium-size banks:
- Category 1 (banks with >$10 billion in total assets): Internal ratings-based or IRB-approved small and medium-size banks will be required to disclose up to 30 tables/templates.
- Category 1: Non-IRB-approved small and medium-size banks will be required to disclose up to 22 tables/templates.
- Category 2 (banks with <$10 billion in total assets, if report >$100 million in loans): Small and medium-size banks will be required to disclose five tables/templates.
- Category 3 (banks with <$10 billion in total assets, if report <$100 million in loans): Small and medium-size banks will be required to disclose three tables/templates.
Annex 1 to the draft guideline presents minimum mandatory disclosure requirements for small and medium-size banks by format, reporting frequency, and implementation date for each category the small and medium-size banks fall into. The proposed guideline will apply to all small and medium-size banks, except for foreign bank branches, and subsidiaries of small and medium-size banks or domestic systemically important banks (D-SIBs) that report consolidated results to OSFI. Small and medium-size bank category covers banks (including federal credit unions), bank holding companies, federally regulated trust companies, and federally regulated loan companies that have not been designated by OSFI as D-SIBs. This includes subsidiaries of small and medium-size banks or D-SIBs that are banks (including federal credit unions), federally regulated trust companies, or federally regulated loan companies.
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Comment Due Date: September 29, 2021
Keywords: Americas, Canada, Banking, Pillar 3, Reporting, Basel, Disclosures, Proportionality, SMSBs, D-SIBs, Small and Medium Size Banks, OSFI
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