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.
|Institution||Published||Title and Brief Summary||Status|
|Finance Canada||October 29, 2018||Bill C-86, A second Act to implement certain
provisions of the budget tabled in Parliament on February 27, 2018
and other measures
On October 29, 2018, Budget Implementation Act, 2018, No. 2 (Short title) was introduced at the Parliament of Canada.
|House Second Reading November 6, 2018; referred to Standing Committee on Finance|
|FATF||October 25, 2018||Risk-based Approach Guidance for the Life
The risk-based guidance for the life insurance sector highlights the nature and level of money laundering and terrorist financing risks of the life insurance sector. It provides indications and examples of money laundering and terrorist financing (ML/TF) risks for a range of life insurance products. The guidance highlights that the ML/TF risk assessment should reflect the nature, size and complexity of the business: from a simple risk assessment for less complex life insurers and intermediaries, to a more complex risk assessment that takes into account group-wide risk appetite and framework. The guidance stresses the importance of the involvement of senior management.
The Guidance aims to support the design and implementation of the risk-based approach for the life insurance sector, taking into account national ML/TF risk assessments and legal and regulatory frameworks to combat money laundering and terrorist financing
|FATF||October 19, 2018||Regulation of virtual assets
Given the urgent need for an effective global, risk-based response to the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) risks associated with virtual asset financial activities, the FATF has adopted changes to the FATF Recommendations and Glossary that clarify how the Recommendations apply in the case of financial activities involving virtual assets.
The FATF uses the term "virtual asset" to refer to digital representations of value that can be digitally traded or transferred and can be used for payment or investment purposes, including digital representations of value that function as a medium of exchange, a unit of account, and/or a store of value.
These changes add to the Glossary new definitions of "virtual assets" and "virtual asset service providers" — such as exchanges, certain types of wallet providers, and providers of financial services for Initial Coin Offerings (ICOs).
These changes make clear that jurisdictions should ensure that virtual asset service providers are subject to AML/CFT regulations. They should be licensed or registered and subject to monitoring to ensure compliance.
|BIS||October 18, 2018||Leverage ratio treatment of client cleared
This consultative document seeks the views of stakeholders on whether a targeted and limited revision of the leverage ratio's treatment of client cleared derivatives may be warranted, based on the findings of the Committee's review of the impact of the leverage ratio on banks' provision of client clearing services and in consideration of key policy objectives of G20 Leaders both to prevent excessive leverage and improve the quality and quantity of capital in the banking system and to promote central clearing of standardised derivatives contracts.
The range of treatments that the Committee may consider include:
|Comments should be provided by January 16, 2019.|
|OSFI [Federally Regulated Life Insurance Companies, Fraternal Benefit Societies]||October 10, 2018||2019 Life Insurance Capital Adequacy Test
OSFI is issuing the final version of the 2019 LICAT guideline.
In addition to minor edits and clarifications, key changes made to the guideline include:
|OSFI [Banks, Bank Holding Companies, Federally Regulated Trust and Loan Companies, Cooperative Retail Associations]||October 5, 2018||Proposed changes to Guideline B-12: Interest Rate
OSFI is issuing proposed revisions to guideline B-12 Interest Rate Risk Management. The guideline, which was last issued in 2005, provides a risk control framework for managing interest rate risk to prudent level at institutions.
In April 2016, the Basel Committee on Banking Supervision (BCBS) published revisions to the framework for Interest Rate Risk in the Banking Book (IRRBB). OSFI's draft guideline incorporates most of the BCBS guidance to reflect changes in the market, the methods expected to be used by institutions for measuring, managing and monitoring IRRBB, as well as updates related to supervisory practices. OSFI is targeting implementation of the revised guideline for January 1, 2020.
|Comments period ended on November 19, 2018.|
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