Canada: Federal Financial Institutions Legislative And Regulatory Reporter - July And August 2019

Last Updated: September 18 2019
Article by Donna Spagnolo and Robert Dawkins

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.

The July 2019 edition follows below.




Title and Brief Summary


(Federally Regulated Insurers (FRIs))

August 13, 2019

OSFI's Activities with respect to IFRS 17

On June 26, 2019, the International Accounting Standards Board (IASB) released an exposure draft proposing amendments to International Financial Reporting Standard 17 - Insurance Contracts (IFRS 17), one of which is a deferral of the effective date by one year to January 1, 2022.

If the IASB approves the amendments to IFRS 17 and the Canadian Accounting Standards Board incorporates them into the CPA Canada Handbook, OSFI will revise its publicly posted advisories and update the timeline for the key milestones communicated in its June 27, 2018 Capital letter accordingly.

In the fall of 2019, OSFI will hold consultative discussions on IFRS 17 Accounting Policy choices with FRIs to understand positions taken and determine if there is consistency and /or comparability of IFRS 17 application across the Canadian industry.

If the IASB approves the new IFRS 17 effective date, OSFI expects to add another directed consultation with regard to adapting the insurance capital guidance for IFRS 17 in June 2020. The directed consultation will cover near-final LICAT and MCT 2022 guidelines, forms, and QIS 2. OSFI intends to finalize the LICAT and MCT 2022 guidelines in 2021.

In June 2019, the insurance industry was provided with draft regulatory returns updated for IFRS 17. OSFI's goal is to launch a public consultation on the draft regulatory returns in November 2019. OSFI intends to finalize the regulatory returns by June 2020.

OSFI will continue to monitor IFRS 17 progress through semi-annual progress reports submitted by FRIs.



July 2019



Title and Brief Summary


Bank for International Settlements

July 23, 2019

Margin requirements for non-centrally cleared derivatives

The Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO) have revised the framework for margin requirements for non-centrally cleared derivatives.

Relative to the 2015 framework, the revisions extend by one year the final implementation of the margin requirements. With this extension, the final implementation phase will take place on 1 September 2021. To facilitate this extension, the Basel Committee and IOSCO have also introduced an additional implementation phase that begins on 1 September 2020. 

Effective September 1, 2020

Financial Stability Board

July 19, 2019

Regulatory framework for haircuts on non-centrally cleared securities financing transactions

The Financial Stability Board has announced adjustments to the implementation timelines for its recommendations on securities financing transactions (SFTs), specifically the Regulatory framework for haircuts on non-centrally cleared securities financing transactions.

The framework aims to address financial stability risks associated with SFTs, setting out numerical haircut floors to apply to non-bank-to-non-bank SFTs. The report was originally published on 12 November 2015; the timelines for recommendations 14 to 18 in Annex 1 have now been adjusted, and the Annex re-published.

Recommendation 14 effective January 2022

Recommendation 15 effective January 2024

Recommendation 16 effective January 2021

Recommendation 17 effective January 2023

Recommendation 18 effective January 2022

OSFI (Banks,
Bank Holding Companies,
Federally Regulated Trust and Loan Companies)

July 18, 2019

Use of the Advanced Measurement Approach for Operational Risk Capital

OSFI is revising its capital requirements for operational risk applicable to deposit-taking institutions (DTIs) considering the final Basel III revisions published by the Basel Committee on Banking Supervision in December 2017. Institutions currently approved to use the Advanced Measurement Approach (AMA) will be required to use a revised Basel III Standardized Approach when the revised requirements are implemented in Canada in Q1 2021.

Consistent with OSFI's Guideline E-21, Operational Risk Management, OSFI expects larger, more complex banks to continue using internal and external loss data and scenario analysis in their operational risk management frameworks. Banks currently using the AMA approach will no longer be required to use Business Environment and Internal Control Factors in their operational risk management frameworks after Q4 2019.


OSFI (Banks,
Bank Holding Companies,
Federally Regulated Trust and Loan Companies)

July 18, 2019

Draft Guideline: Guideline B-6 – Liquidity Principles

OSFI is issuing proposed revisions to its Guideline B-6 – Liquidity principles for consultation. Guideline B-6 sets out OSFI's expectations around the management of liquidity risk for banks, bank holding companies and federally regulated trust and loan companies. Together with the Liquidity Adequacy Requirements (LAR) Guideline, which outlines a set of quantitative liquidity standards and metrics, it forms the framework under which OSFI assesses the liquidity adequacy of the institutions it supervises.

The changes proposed aim to ensure that the guideline remains current and relevant as well as appropriate for the scale and complexity of institutions. In addition, the updated guidance clarifies OSFI's expectations regarding institutions' liquidity risk management practices.
OSFI is targeting implementation of the proposed revisions to Guideline B-6 for January 1, 2020.

Comments should be received by September 13, 2019


July 11, 2019

Advancing Proportionality: Tailoring Capital and Liquidity Requirements for Small and Medium-Sized Deposit-Taking Institutions

The Office of the Superintendent of Financial Institutions (OSFI) has released a discussion paper titled Advancing Proportionality: Tailoring Capital and Liquidity Requirements for Small and Medium-Sized Deposit-Taking Institutions.
The paper seeks input on possible changes to capital and liquidity requirements for small and medium-sized deposit-taking institutions, and outlines OSFI's initiative to develop more tailored requirements that take into account their unique nature.

As new capital and liquidity standards are developed internationally and implemented domestically, OSFI is focused on ensuring that its capital and liquidity regime remains appropriate for these smaller, less complex organizations. This paper focuses on the first phase of this initiative – the Pillar 1 minimum requirements. Subsequent phases will focus on the Pillar 2 (prudential and risk management expectations) and Pillar 3 (public disclosure) requirements.


Comments should be submitted by September 27, 2019

Finance Canada

Canada Gazette Part II, July 10, 2019

Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2019, SOR/2019-240

The amendments to the regulations strengthen Canada's AML/ATF Regime by updating customer due diligence requirements; regulating businesses dealing in virtual currency; updating the schedules to the regulations; including foreign money service businesses (MSB) in Canada's AML/ATF Regime; updating beneficial ownership reporting requirements in suspicious transaction reports; clarifying a number of existing requirements; and making minor technical amendments.

Effective June 1, 2021, with the exception of s. 39 (effective June 25, 2019) and ss. 3, 6(1) to (3) 50 to 98, 100 to 105, 111 and 112 (effective June 1, 2020)

Finance Canada

Canada Gazette Part II, July 10, 2019

Payment Clearing and Settlement Regulations, SOR/2019-257
The Budget Implementation Act, 2018, No. 1 (The Act) amends the Payment Clearing and Settlement Act (PCSA) to implement a Financial Market Infrastructure (FMI) resolution framework so that the appropriate tool kit is in place to intervene in the unlikely event that a systemically important FMI fails. The Regulations provide further details of the FMI resolution regime implemented in the PCSA in the areas of limited clearing members, conflict of interest, resolution plans, cost recovery, compensation, and oversight information.

The Regulations come into force concurrently with the proclamation in force of the amendments to the PCSA by the Act.

Effective June 23, 2019

Financial Action Task Force

July 5, 2019

Terrorist Financing Risk Assessment Guidance

The FATF requires each country to identify, assess and understand the terrorist financing (TF) risks it faces, as an essential part of dismantling and disrupting terrorist networks. Countries often face particular challenges in assessing TF risks due to the low value of funds or other assets used in many instances, and the wide variety of sectors misused for the purpose of financing terrorism.

This guidance aims to assist practitioners, and particularly those in lower capacity countries, in assessing terrorist financing risk at the jurisdiction level by providing good approaches, relevant information sources and practical examples based on country experience.


Financial Stability Board

July 2, 2019

Review of the Technical Implementation of the Total Loss-Absorbing Capacity (TLAC) Standard

The Total Loss-Absorbing Capacity (TLAC), published in 2015, was designed so that failing global systemically important banks (G-SIBs) will have sufficient loss-absorbing and recapitalisation capacity for authorities to implement an orderly resolution. Being able to implement orderly resolution minimises impacts on financial stability, maintains the continuity of critical functions, and avoids exposing public funds to loss.

This technical review concludes that progress has been steady and significant in both the setting of external TLAC requirements by authorities and the issuance of external TLAC by G-SIBs. This has been instrumental in enhancing the resolvability of G-SIBs, strengthening cooperation between home and host authorities and boosting market confidence in authorities' capabilities to address too-big-to-fail risks.



About BLG

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
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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