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
Title and Brief
[Applicable to banks, trust and loan companies, cooperative
credit associations and insurance companies]
OSFI is issuing the final version of Guideline E-22, which requires
the exchange of margin to secure performance on non-centrally
cleared derivatives transactions between covered entities. These
margin requirements will mitigate systemic risk in the financial
sector as well as promote central clearing of derivatives where
practicable. The provisions of this Guideline are consistent with
margin requirements issued by the Basel Committee on Banking
Supervision (BCBS) and the Board of the International Organization
of Securities Commissions (IOSCO) and support the financial
stability objectives of the international framework.
OSFI recognizes the cross-border nature of the non-centrally
cleared derivatives market, and supports efforts to reduce the
application of duplicative or conflicting margin requirements. The
Guideline therefore permits deference to other jurisdictions and
regulators when justified by the quality and comparability of the
respective regulatory regime.
The Basel Committee deems it worthwhile to issue this guide as an
annex to the guidelines on the sound management of risks related to
money laundering and financing of terrorism, which was first
published in January 2014. These guidelines revised, updated and
merged two previous publications of the Basel Committee, issued in
2001 and 2004.
The revised version of the General guide to account opening and
customer identification takes into account the significant
enhancements to the Financial Action Task Force (FATF)
Recommendations and related guidance. In particular, it builds on
the FATF Recommendations, as well as on two supplementary FATF
publications specifically relevant for this guide: Guidance for a
risk-based approach: The banking sector and Transparency and
beneficial ownership, both issued in October 2014..
Prohibit the use of taxpayer-backed insured mortgages as
collateral in securitization vehicles that are not sponsored by
Restore lender use of government-backed portfolio insurance to
its original purpose — funding through CMHC securitization
Provide a transition for affected lenders to adjust to these
measures in a gradual and orderly way.
Change the eligibility rules for new government-backed insured
mortgages, affecting new purchases of insured properties priced
above $500,000. Effective February 15, 2016, the minimum down
payment for new insured mortgages will be increased from 5% to 10%
for the portion of the house price above $500,000.
The criteria and risk-management standards exercise the Bank of
Canada's new responsibility for identifying and overseeing
payments systems that have the potential to pose payments system
risk. The Bank is currently using the criteria to identify systems
that may pose payments system risk and will provide public notice
of any system that will be designated for oversight.
The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
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