OSFI Publishes Final Guideline on Leverage Ratio Disclosures for Banks
OSFI published the final version of its Leverage Ratio Disclosure Requirements guideline for banks. The revisions, which reflect the recent changes to the Leverage Requirements guideline and the Capital Adequacy Requirements (CAR) guideline, incorporate a new line to capture the treatment of securitized assets that meet the operational requirements for recognition of significant risk transfer. The effective date is November 01, 2018 for institutions with an October 31 year-end and January 01, 2019 for institutions with a December 31 year-end.
The guideline is intended for banks, bank holding companies, federally regulated trust and loan companies, and cooperative retail associations. Both domestic systemically important banks (D-SIBs) and non-D-SIBs should implement the revised disclosures for reporting for the first quarter of 2019. This date aligns with the implementation date of the proposed changes to the Leverage Requirements and CAR guidelines. As a result of the public consultation, OSFI corrected a number of paragraph references and removed a conflicting publication requirement. D-SIBs are required to publicly disclose the following:
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Summary comparison table. D-SIBs are required to report the reconciliation of their balance sheet assets from their financial statements with the leverage ratio exposure measure, using the Reporting Table 1 in Annex I.
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Common disclosure template. D-SIBs are required to provide a breakdown of the main leverage ratio regulatory elements, using the Reporting Table 2 in Annex I.
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Reconciliation with public financial statements. D-SIBs are required to disclose the source of material differences between their total balance sheet assets (net of on-balance sheet derivative and securities financing transaction assets) as reported in their financial statements and their on-balance sheet exposures in line 1 of the common disclosure template.
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Other. D-SIBs are required to explain the key drivers of material changes in their Basel III leverage ratio observed from the end of the previous reporting period to the end of the current reporting period (whether the changes stem from changes in the numerator and/or from changes in the denominator).
The guideline provides clarification on the implementation of the BCBS leverage ratio framework disclosure requirements for all institutions and builds on the April 2017 Pillar 3 Disclosure Requirements guideline of OSFI.
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Effective Date: November 2018/January 2019
Keywords: Americas, Canada, Banking, Leverage Ratio, Disclosures, Basel III, Securitization, Significant Risk Transfer, OSFI
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