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
The purpose of this 2016 ICS Public Consultation Document is to
solicit stakeholder feedback on three key components of ICS Version
1.0 for confidential reporting purposes: valuation methodologies,
qualifying capital resources and the implementation of risk based
approaches to determine regulatory capital requirements. The focus
of ICS Version 1.0 is on a standard method, with consideration of
other methods of calculation of the ICS capital requirement to be
addressed in Version 2.0.
The Basel Committee on Banking Supervision published an updated
standard for the regulatory capital treatment of securitisation
exposures. By including the regulatory capital treatment for
"simple, transparent and comparable" (STC)
securitisations, this standard amends the Committee's 2014
capital standards for securitisations.
[Applicable to Banks, Trust and Loans companies, Cooperative
Credit and Retail Associations, Life Insurance Companies, Fraternal
Benefit Societies and Property & Casualty Insurance
The OSFI released a letter to advise federally regulated
financial institutions (FRFIs) that it is tightening its
supervisory expectations for mortgage underwriting in light of the
evolving housing market. The letter identifies a number of areas
that warrant close attention by mortgage lenders and insurers.
OSFI's supervisory scrutiny for residential mortgage
underwriting will place an even greater emphasis on confirming that
the internal controls and risk management practices of mortgage
lenders and insurers are sound and take into account market
developments. The letter also provides an update to industry on
initiatives announced by OSFI in a December 2015 letter aimed at
strengthening the measurement of capital held by the major banks
and mortgage insurers.
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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