OSFI Updates Address BCAR Reporting, Basel Reforms, and Cyber Risk
The Office of the Superintendent of Financial Institutions (OSFI) updated the 2023 Basel Capital Adequacy Reporting (BCAR) manual as well as the 2023 BCAR return. OSFI also published a series of frequently asked questions (FAQs) regarding the implementation of Basel III banking reforms. Additionally, OSFI released the final Guideline B-13, which sets out its expectations for how federally regulated financial institutions should manage technology and cyber risks such as data breaches, technology outages, and more.
BCAR reporting manual and return. The BCAR reporting manual provides guidance on how to complete the full BCAR return. The BCAR return collects data to calculate the risk-based capital ratio of reporting institutions as well as details of the calculation. For domestic systemically important banks (D-SIBs), this return also collects the data to calculate the risk-based Total Loss Absorbing Capacity (TLAC) ratio of the reporting D-SIB, along with the details of the calculation. The return must be completed on a quarterly fiscal basis and filed within 30 days of the quarter-end date.
FAQs on Basel III Reforms. The FAQs offer guidance on certain aspects of the Basel III-related changes to the Capital Adequacy Requirements Guideline, the Liquidity Adequacy Requirements Guideline, and the Leverage Requirements Guideline. With respect to the Capital Adequacy Requirements Guideline, OSFI has published FAQs on the risk-based capital targets, definition of capital, operational risk, standardized approach for credit risk, internal ratings-based approach to credit risk, settlement and counterparty risk, and credit valuation adjustment (CVA) risk. With respect to the Liquidity Adequacy Requirements Guideline, OSFI has published FAQs related to the liquidity coverage ratio and the net cumulative cash flow while, for the Leverage Requirements Guideline, OSFI has published FAQs related to the leverage ratio buffer.
Guideline on technology and cyber risk management. The guideline, which will be effective as of January 01, 2024, has been organized into three domains: governance and risk management, technology operations and resilience, and cyber-security. Each domain has a desired outcome for the federally regulated financial institutions to achieve through managing risks that contribute to developing their resilience to technology and cyber risks. The guideline sets out the following key principles under each domain:
- Senior Management should assign responsibility for managing technology and cyber risks to senior officers. It should also ensure an appropriate organizational structure and adequate resourcing are in place for managing technology and cyber risks across the federally regulated financial institution.
- Federally regulated financial institutions should define, document, approve, and implement a strategic technology and cyber plan(s). The plan(s) should align to business strategy and set goals and objectives that are measurable and evolve with changes in the federally regulated financial institution’s technology and cyber environment.
- Federally regulated financial institutions should establish a technology and cyber risk management framework. The framework should set out a risk appetite for technology and cyber risks and define federally regulated financial institution’s processes and requirements to identify, assess, manage, monitor, and report on technology and cyber risks.
- Federally regulated financial institutions should maintain an updated inventory of all technology assets supporting business processes or functions. Federally regulated financial institution’s asset management processes should address classification of assets to facilitate risk identification and assessment, record configurations to ensure asset integrity, provide for the safe disposal of assets at the end of their life cycle, and monitor and manage technology currency.
- Federally regulated financial institutions should establish and maintain an Enterprise Disaster Recovery Program (EDRP) to support its ability to deliver technology services through disruption and operate within its risk tolerance.
- Federally regulated financial institutions should maintain a range of practices, capabilities, processes and tools to identify and assess cyber security for weaknesses that could be exploited by external and insider threat actors.
- Federally regulated financial institutions should design, implement and maintain multi-layer, preventive cyber security controls and measures to safeguard its technology assets.
- BCAR Reporting Manual
- BCAR 2023 Return (XLSX)
- FAQs on Basel III Reforms
- News Release on Guideline on Technology and Cyber Risk Management
- Guidelines on Technology and Cyber Risk Management
Keywords: Americas, Canada, Banking, Basel, BCAR, Reporting, Capital Adequacy, Regulatory Capital, Credit Risk, Operational Risk, FAQ, Technology Risk, Cyber Risk, Regtech, CVA Risk, OSFI
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous ArticleCBIRC Issues Notice on Management of Online Lending for Banks
Next ArticleECB Announces Croatia to Join Euro Area Next Year
FINMA Approves Merger of Credit Suisse and UBS
The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
MFSA Sets Out Supervisory Priorities, Issues Reporting Updates
The Malta Financial Services Authority (MFSA) outlined its supervisory priorities for 2023
German Regulators Issue Multiple Reporting Updates for Banks
Deutsche Bundesbank published the nationally deactivated validation rules for the German Commercial Code (HGB) users on the taxonomy 3.2, which became valid from December 31, 2022
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.