Canada: Technology And Cyber Security Incident Reporting For Federally Regulated Financial Institutions

On January 24, 2018, the Office of Superintendent of Financial Institutions ("OSFI") published a Technology and Cyber Security Incident Reporting Advisory ("Advisory") setting out new reporting requirements for technology and cyber security incidents. The Advisory applies to all federally regulated financial institutions ("FRFIs"), which includes all banks in Canada, and all federally incorporated or regulated trust and loan companies, insurance companies, cooperative credit associations, fraternal benefit societies and pension plans.

Under the Advisory, a technology or cyber security incident is defined as an incident that has "the potential to, or has been assessed to, materially impact the normal operations of an FRFI, including confidentiality, integrity or availability of its systems and information" ("Incident").

The Incident reporting requirements under the Advisory will become effective on March 31, 2019 and will apply to all FRFIs. Third party service providers who have access to FRFI operations, information systems or data, should also be made aware of the reporting requirements under the Advisory, as they may be required to support FRFIs with their reporting obligations.


Due to the increased digitization of the financial services industry, OSFI has recently taken steps to re-examine its oversight role and approach to enhancing and managing cyber security at FRFIs. In taking these steps, one of OSFI's key priorities has been to strengthen its ability to anticipate and respond to severe but plausible risks (including cyber risks) to the Canadian financial system within the broader context of the Government of Canada's National Cyber Security Strategy, as was highlighted in its 2018-2019 Departmental Plan and 2017-2020 Priorities.

The Advisory sets out the requirements, which are meant to supplement OSFI's expectations for FRFIs' incident management frameworks, for: (a) when FRFIs must report Incidents to OSFI; and (b) Incident reports. The FRFIs' obligations are intended to help OSFI identify areas where FRFIs can take steps to proactively prevent such incidents or to improve their resiliency in cases where an incident has occurred.

When read together with OSFI's key priorities, the Advisory appears to provide OSFI with greater cyber security oversight and the ability to collect data points to assess whether adjustments (if any) should be made to its guidance on FRFIs' incident management frameworks.

Incident Reporting

Under the Advisory, FRFIs will be required to report Incidents which they assess to be of a high or critical severity level. FRFIs are responsible for assessing whether an Incident is sufficiently material (in accordance with their respective incident management frameworks) to be reported to OSFI. To assist in determining whether an Incident is of a high or critical severity level, the Advisory provides the following non-exhaustive list of characteristics which may be attributable to reportable Incidents:

  • Significant operational impact to key/critical information systems or data;
  • Material impact to FRFI operational or customer data, including confidentiality, integrity or availability of such data;
  • Significant operational impact to internal users that is material to customers or business operations;
  • Significant levels of system/service disruptions;
  • Extended disruptions to critical business systems/operations;
  • Number of external customers impacted is significant or growing;
  • Negative reputational impact is imminent (e.g. public/media disclosure);
  • Material impact to critical deadlines/obligations in financial market settlement or payment systems (e.g. Financial Market Infrastructure);
  • Significant impact to a third party deemed material to the FRFI;
  • Material consequences to other FRFIs or the Canadian financial system; or
  • An FRFI incident has been reported to the Office of the Privacy Commissioner or local/foreign regulatory authorities.

Further, the Appendix to the Advisory provides the following non-exhaustive list of some examples of reportable Incidents:

Scenario Name

Scenario Description


Cyber Attack

Account takeover botnet campaign is targeting online services using new techniques, current defences are failing to prevent customer account compromise.

• High volume and velocity of attempts;

• Current controls are failing to block attack;

• Customers are locked out; or

• Indication that accounts have been compromised.

Service Availability & Recovery

Technology failure at data center.

• Critical online service is down and alternate recovery option failed; or

• Extended disruption to critical business systems and operations.

Third Party Breach

A material third party is breached, FRFI is notified that third party is investigating.

• Third party is designated as material to the FRFI; or

• Material impact to FRFI data is possible

Extortion Threat

FRFI has received an extortion message threatening to perpetrate a cyber attack (e.g. DDoS for Bitcoin).

• Threat is credible; or

• Probability of critical online service disruption

Reporting Requirements

When an FRFI determines that an Incident is of a high or critical severity level, the FRFI must provide an initial written or electronic report to its OSFI Lead Supervisor and to, as promptly as possible, but no later than 72 hours following such determination. The initial report must include the following:

  • Date and time the incident was assessed to be material;
  • Date and time/period the incident took place;
  • Incident severity;
  • Incident type (e.g. DDoS, malware, data breach, extortion);
  • Incident description, including: (a) known direct/indirect impacts (quantifiable and non-quantifiable), including privacy and financial; (b) known impact to one or more business segment, business unit, line of business or regions, including any third party involved; (c) whether incident originated at a third party, or has impact on third party services; and (d) the number of clients impacted;
  • Primary method used to identify the incident;
  • Current status of incident;
  • Date for internal incident escalation to senior management or Board of Directors;
  • Mitigation actions taken or planned;
  • Known or suspected root cause; and
  • Name and contact information for the FRFI incident executive lead and liaison with OSFI.

Where specific details are unavailable at the time of the initial report, the FRFI must indicate "information not yet available" and provide the best known estimate of when all such details are expected to become available.

Further, following its provision of the initial report to OSFI, the FRFI is expected to provide:

  • Regular updates (e.g. daily) to OSFI as new information becomes available and until all material details about the reportable Incident have been provided;
  • Situation updates, including any short term and long term remediation actions and plans until the reportable Incident has been contained or resolved; and
  • A report on the FRFI's post-incident review and lessons learned once the reportable Incident has been contained, recovered and closed.

In relation to the foregoing updates, depending on the severity, impact and velocity of the reportable Incident, the OSFI Lead Supervisory may request that an FRFI change the method and frequency of any such updates.

Compliance Challenges

The Advisory presents some compliance uncertainties and challenges for FRFIs. For example:

  • Materiality: The expectation for FRFIs to determine whether an Incident is of a high or critical severity level, may produce inconsistent results on what constitutes a reportable Incident amongst FRFIs. For example, FRFIs will need to assess how many of the characteristics an Incident must have and how much of an impact they must make to be deemed sufficiently material to be reported to OSFI. When FRFIs are uncertain about Incident materiality, they should consult their OSFI Lead Supervisor.
  • Timing: Since there is no bright line test for whether an Incident constitutes a reportable Incident or not, the timing on reporting may be indeterminable.
  • Conflicting Obligations: The obligation to report on any details pertaining to a third party involved in a reportable Incident may conflict with contractual obligations that the FRFI owes to such third party, such as confidentiality obligations.

OSFI may address some of the challenges presented above in its future guidelines.

Compliance Considerations

FRFIs should review their incident management framework and possibly adjust their cyber risk management policies and procedures to: (a) align with OSFI's expectations; and (b) ensure that material Incidents are reported to OSFI in a timely manner. In reviewing their incident management framework, FRFIs should consider the following:

  • Policies and Procedures for Incident Assessment and Reporting: FRFIs should consider whether their written policies and procedures (including training materials) should be updated to ensure that applicable personnel: (a) are able to understand and assess the characteristics of reportable Incidents and their severity levels; and (b) are sufficiently trained to send Incident reports to OSFI in accordance with the requirements set out in the Advisory.
  • Third Party Service Providers: FRFIs should review agreements with third party service providers who have access to FRFI information systems, data and operations to ensure that such service providers are required to report all technology and cyber security incidents, and associated details, so that the FRFI can assess whether such incidents are reportable to OSFI. Further, FRFIs should consider whether their written policies and procedures for contracting with third party service providers should be revised to ensure all such incidents, and associated details, are reported to the FRFI.
  • Privacy Reporting: FRFIs should be made aware that the reporting obligations under the Advisory are distinct from the breach notification requirements found in in Canada's Personal Information Protection and Electronic Documents Act ("PIPEDA"), which came into force on November 1, 2018. For example:
  • The timing for when a material Incident must be reported to OSFI under the Advisory differs from when a privacy breach must be reported to the Office of the Privacy Commissioner under PIPEDA;1 and
  • The materiality threshold for reportable Incidents under the Advisory is for Incidents that are of a high or critical severity level, whereas the threshold for reporting privacy breaches under PIPEDA is where there is a "real risk of significant harm".2


1 Pursuant to s. 10.1(6) of PIPEDA, "the notification shall be given as soon as feasible after the organization determines that the breach [of security safeguards involving personal information under its control] has occurred."

2 Pursuant to s. 10.1(1) of PIPEDA, "An organization shall report to the Commissioner any breach of security safeguards involving personal information under its control if it is reasonable in the circumstances to believe that the breach creates a real risk of significant harm to an individual.

To view the original article click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions