The Reporter provides a monthly summary of Canadian federal legislative and regulatory developments of relevance to federally regulated financial institutions. It does not address Canadian provincial financial services legislative and regulatory developments, although this information is tracked by BLG and can be provided on request. In addition, purely technical and administrative changes (such as changes to reporting forms) are not covered.

June 2015

Institution

Published

Title and Brief Summary

Status

OSFI

[Applicable to banks and
trust and loan companies]

Issued June 30, 2015

Guide for Incorporating Banks and Federally RegulatedTrust and Loan Companies
This Guide also sets out the various prudential, regulatory and legislative criteria and information requirements relative to applications for the incorporation, and commencement of business, of a FRFI.
This Guide does not apply to:

  1. the establishment of a foreign bank branch in Canada;
  2. the incorporation of, or continuance as, a bank holding company; and
  3. the incorporation of, or continuance as, a federal credit union.

Effective

OSFI

[Applicable to banks, cooperative credit associations, trust and loan companies
and insurance companies]

Issued June 30, 2015

Related  Party Transaction Instructions

The Office of the Superintendent of Financial Institutions (OSFI) has revised the Transaction Instructions for related-party asset transactions to ensure they remain current and accurately reflect how OSFI processes such requests for approvals.

  1. Related-party asset transactions as part of  a restructuring
  2. Related-party asset transactions with a  financial institution

Effective

OSFI

[Applicable to Banks, cooperative credit associations, trust and loan companies
and insurance companies]

Issued June 29, 2015

Advisory 2015-01: Substantial Investments

This Advisory provides an overview of how OSFI administers and interprets the substantial investment regimes set out in the FRFI statutes as well as related regulations.

Effective

OSFI
[Applicable to Banks]

Issued June 29, 2015

Advisory 2006-01-R1: Legislative Framework for  Foreign Banks
This Advisory provides an overview of how OSFI administers and interprets Parts XII and XII.01 of the Bank Act (the Act), which set out the framework for the branches, activities and investments in Canada of certain foreign banks and entities associated with a foreign bank.

Effective

BIS/Basel
[Applicable to Banks]

Published June 22, 2015

Net Stable Funding Ratio disclosure standards

Disclosure requirements for the Net Stable FundingRatio (NSFR) have been developed to improve the transparency of regulatory funding requirements, reinforce the Principles for sound liquidity riskmanagement and supervision, strengthen market discipline, and reduce uncertainty in
the markets as the NSFR standard is implemented.

Banks will be required to comply with the disclosure requirements
from the date of the first reporting period after January 1, 2018

Finance
[Applicable to Banks,
cooperative credit associations, trust and loan companies
and insurance companies]

Published (Gazette) – June 17, 2015

Order Fixing the Day on which this Order is made as the Day on which Certain Sections of the Act Come into Force Economic Action Plan 2014 Act, No. 2
The amendments to the Canadian Payments Act make changes to its governance structure and add new accountability framework obligations.

In Force June 4, 2015

Finance
[Applicable to Banks,
cooperative credit associations, trust and loan companies
and insurance companies]

Published (Gazette) – June 17, 2015

Canadian Payments Association Reporting Requirements Regulations Canadian Payments  Act
The Regulations aim to support the new accountability framework for the CPA by providing direction on preparing and submitting the corporate plan and annual report.

In Force June 4, 2015

Bank of Canada

Issued
June 15, 2015

Changes to Margin Requirements for the Bank of Canada’s Standing Liquidity Facility  (SLF)
As part of the ongoing review of the collateral policy related to the Bank of Canada’s Standing Liquidity Facility (SLF), the Bank has revised the margin requirements applied to certain securities accepted as SLF collateral.

Effective
June 16, 2015

Bank of Canada

Issued June 12, 2015

Proposed Criteria and Risk-Management Standards for Prominent Payment System - a Consultation Paper
The Bank of Canada has been given responsibility for identifying and overseeing payments systems that have the potential to pose payments system risk. To exercise this new responsibility, the Bank is proposing criteria that will serve as the basis for identifying such systems. In addition, the Bank is proposing risk-management standards that would guide operators of these systems in the mitigation of payments system risk.

Comments should be provided by August 14, 2015

BIS/Basel
[Applicable to Banks]

Issued June 8, 2015

Interest rate risk in the banking book – Consultative  document
The consultative document on the risk management, capital treatment and supervision of interest rate risk in the banking book (IRRBB) expands upon and is intended to ultimately replace the Basel Committee’s 2004 Principles for the management and supervision of interest rate risk.

Comments should be provided no later than September 11, 2015

Finance

Published (Gazette) – June 6, 2015

Regulations Amending the Insurable Housing Loan Regulations
Regulations Amending the Eligible Mortgage Loan Regulations
The objectives of the proposed Regulations are as follow:

  1. Prohibit the use of taxpayer-backed insured mortgages as collateral in securitization vehicles that are not sponsored by CMHC.
  2. Restore lender use of government-backed portfolio insurance to its original purpose, funding through CMHC securitization programs.
  3. Provide a transitional period for affected lenders to adjust to these measures.

Interested persons may make
representations concerning
the proposed Regulations within 30 days after the date of publication of these notices.

BIS/Basel
[Applicable to Banks]

Issued June 2, 2015

Developments in credit risk management across sectors: current practices and recommendations
The report provides insight into the current supervisory framework around credit risk, the state of credit
risk management at firms and implications for the supervisory and regulatory treatments of credit risk.

 


Author

Jeffrey S. Graham 
JGraham@blg.com
416.367.6174

Expertise

Financial Services Sectors
Banking and Financial Services
Regulatory