The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021. The report covers activities of the regulator from April 01, 2020 to March 31, 2021, outlining actions taken to support stakeholders through the COVID-19 crisis, along with the progress in delivering on the 2019-2022 Strategic Plan of OSFI. The report also mentions some of the key upcoming deliverables of policy work for the coming year.
A notable deliverable during the year, was the March 2021 public consultation on revisions to the Capital Adequacy Requirements (CAR) Guideline, the Leverage Requirements (LR) Guideline, and the Liquidity Adequacy Requirements (LAR) Guideline, with a view to implementing these changes in early 2023. The proposed revisions to the CAR and LR guidelines reflect the domestic implementation of the final Basel III reforms. All three guidelines also include proposed revisions to reflect specific capital and liquidity requirements for small and medium-sized institutions (SMSBs). In March 2021, OSFI also released a draft SMSB Capital and Liquidity Guideline to help stakeholders understand how the CAR, LR and LAR guidelines apply to SMSBs including deposit-taking subsidiaries of D-SIBs. Over the coming year, OSFI plans to:
- advance its understanding of climate-related risks and will release a summary of comments received during the climate-related risk consultations, along with the next steps in this area for the 2021-22 fiscal year.
- continue to focus on assessing how institutions use and manage artificial intelligence/machine learning as well as developing additional principles to address emerging risks resulting from their use; this will be used to inform an industry letter on advanced analytics and model risk and a revised model risk guideline, which are to be published in the first quarter of 2022 and 2022-23, respectively.
- launch a comprehensive review of Guideline E-13 (Compliance Management) in 2022. Earlier, in October 2020, OSFI had launched a consultation on the supervisory activities related to anti-money laundering/anti-terrorist financing (AML/ATF), consequent to which, on May 17, 2021—slightly after the period covered by this annual report—OSFI announced that it will rescind Guideline B-8 (Deterring & Detecting Money Laundering and Terrorist Financing), effective July 26, 2021.
Keywords: Americas, Canada, Banking, Mortgage Insurance, Basel, Regulatory Capital, Liquidity Risk, SMSBs, D-SIBs, Compliance Risk, Climate Change Risk, ESG, AML/CFT, Regtech, Modeling Risk, Credit Risk, Predictive Analytics, OSFI
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.
The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.