Featured Product

    OSFI Addresses Regulation of Crypto-Assets, Issues FAQs on Basel Rules

    November 16, 2022

    The Office of the Superintendent of Financial Institutions (OSFI), together with the Financial Consumer Agency of Canada (FCAC) and the Canada Deposit Insurance Corporation (CDIC), issued a statement to regulate entities engaged in crypto-asset activities or crypto-related services. OSFI also published a Digital Innovation Roadmap that outlines its planned work to assess emerging risks and technologies in an evolving digital finance ecosystem and updated the frequently asked questions (FAQs) on the implementation of Basel III banking reforms.

    The Statement on crypto-asset activities reinforces the expectation that federally regulated entities should adhere to all applicable current regulatory requirements and guidance when carrying out any crypto-related services or engaging in crypto-asset activities. Regulated entities are expected to clearly understand the risks of any planned crypto-asset activities and ensure that these risks have been properly addressed. Regulated entities must also ensure that any crypto-asset activities comply with existing federal financial laws including the Bank Act, Insurance Companies Act, Trust and Loan Companies Act, and Proceeds of Crime (Money Laundering) and Terrorist Financing Act as well as any regulations or guidance issued by federal and provincial regulatory agencies. The statement highlights existing regulatory requirements related to prudential regulation, consumer protection, and deposit insurance.

    As part of Digital Innovation Roadmap, OSFI has planned multiple projects to provide additional clarity on the areas of risk management and governance pertaining to digital assets in the coming 24 months. Through OSFI’s Blueprint for Transformation 2022-2025, OSFI has created the Digital Innovation Impact Hub, focused on developing its approaches to the regulation of digital technologies in the financial space; the current workplan is focused on four key pillars—that is, advancing policy work in areas of risk management and governance (areas specific to stablecoin arrangements and crypto-asset custody), creating a regulatory sandbox, developing supervisory practices and tools, and engaging with stakeholders. OSFI also seeks feedback on this from regulated and non-regulated entities for the short and medium term, with the comment period ending on January 19, 2023.

    FAQs on Basel III Reforms. The updated set of FAQs offers 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, the published FAQs address aspects of 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.

     

    Related Links

     

     

    Keywords: Americas, Canada, Banking, Basel, Regulatory Capital, Credit Risk, Operational Risk, FAQ, CVA Risk, Counterparty Credit Risk, Regtech, Stablecoins, Regulatory Sandbox, Crypto Assets, OSFI

    Featured Experts
    Related Articles
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    News

    FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates

    The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.

    December 20, 2022 WebPage Regulatory News
    News

    FSB Reports Assess NBFI Sector and Progress on LIBOR Transition

    The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.

    December 20, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8697