Federal Financial Institutions Legislative And Regulatory Reporter – August 2021 – Finance and Banking – Canada – Mondaq News Alerts

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The Reporter provides a monthly summary of Canadian federal
legislative and regulatory developments of relevance to federally
regulated financial institutions. In addition, purely technical and
administrative changes (such as changes to reporting forms) are not
covered.

Institution Published Title and Brief Summary Status OSFI   August 13, 2021

OSFI Issues Updated Requirements for Technology and
Cyber Incident Reporting And New Cyber
Self-Assessment

The Office of the Superintendent of Financial Institutions
(OSFI) released updated requirements governing how
federally regulated financial institutions (FRFIs) should disclose
and report technology and cyber security incidents to OSFI.

The updated Technology and Cyber Security Incident Reporting
Advisory
supports a coordinated and integrated response to
technology and cyber security incidents when they occur at
FRFIs.

Separately, OSFI also released an updated Cyber Security Self-Assessment that helps FRFIs
gauge and improve their current state of readiness in the face of
emerging and expanding cyber threats.

  August 13, 2021

Revisions to Public Disclosure Requirement Related
to The Identification of Global Systemically Important
Banks

OSFI is releasing the final revisions to its Advisory:
"Global systemically important banks - Public disclosure
requirements"
published in September 2015.

In July 2018, the Basel Committee on Banking Supervision (BCBS)
released an updated assessment methodology that is used annually by
the BCBS and the Financial Stability Board (FSB) to identify global
systemically important banks (G-SIBs). The updated assessment
methodology will take effect for the 2022 G-SIB assessment
exercise.

The revised Advisory addresses changes to the disclosure
requirements included in the updated assessment methodology,
specifically the new Trading Volume indicator and the inclusion of
insurance activities for certain existing G-SIB indicators. The
revised Advisory also provides additional guidance on the
availability of publicly disclosed G-SIB indicators and the nature
of qualitative information to accompany the disclosure
requirements.

Questions regarding the Advisory may be addressed to Lindsay
Cheung, Senior Analyst, Capital Division, by email at [email protected]

    August 13, 2021

Memoranda to the Appointed Actuary (Life Insurance
and Property and Casualty Insurance)

OSFI's Memoranda to the Appointed Actuary (Life Insurance and Property and Casualty Insurance) 2021 has now
been posted on OSFI's website.

    August 12,, 2021

OSFI Adjusts Temporary Exclusions from Leverage
Ratio Exposure Measures (Takes Effect at End of
2021).

OSFI has confirmed that the exclusion of sovereign-issued
securities from the leverage ratio exposure measure for
deposit-taking institutions (DTIs), introduced at the outset of the
COVID-19 pandemic, will not be extended past December 31, 2021.
Central bank reserves will continue to be excluded from the leverage ratio exposure measure for
DTIs.

The decision to allow the temporary exclusion of
sovereign-issued securities to expire is in line with previous OSFI
decisions to discontinue other temporary relief measures introduced
in response to COVID-19 when they are no longer credible, consistent, necessary and
fit-for-purpose
in the Canadian context. OSFI will closely
monitor conditions and remains ready to take any further action,
including the unwinding of other temporary measures, as
required.

  August 5, 2021

Draft Pillar 3 Disclosure Guideline 2023 for
SMSBs

Continuing its initiative to develop tailored requirements that
account for the unique nature of Canadian Small and Medium-sized
banks (SMSBs), OSFI is issuing for Public Consultation the
Draft Pillar 3 Disclosure Guideline for SMSBs.

The Draft Guideline lists the disclosures
required by SMSBs and their respective implementation dates. OSFI
will include the detailed tables and templates in the final
Guideline.

Questions and comments should be addressed to Javinder Sidhu,
Accounting Policy Division, at [email protected] by September 29,
2021. A non-attributed summary of comments received, along with
OSFI's responses, will be posted on OSFI's website when the
final version of the guideline is released. Effective November 1,
2022. Questions and comments by September 29, 2021.

Effective November 1, 2022. Questions and comments
by September 29, 2021.

IAIS

  August 30, 2021

IAIS Publishes Application Paper on
Macroprudential Supervision.

Following public consultation that ended earlier this year, the
Application Paper on Macroprudential
Supervision
was adopted by the IAIS Executive Committee.
The Application Paper provides further guidance on the supervisory
material related to macroprudential supervision in Insurance Core
Principle 24. The outcome of the public consultation can be
accessed on the IAIS website - Closed Consultations page.

 

FSB

  August 20, 2021

Continuity of Access to FMIs for Firms in
Resolution: Streamlined Information Collection to Support
Resolution Planning (Revised Version 2021)

This questionnaire updates the previous
questionnaire for FMIs, which was published in August 2020. It has
been revised following an evaluation of stakeholders' first
experiences with the process via an online survey in April 2021.
While a large majority of respondents (from various perspectives)
indicated that the questionnaire template was useful, a number of
suggestions were also made. To the extent feasible, these have been
incorporated as clarifications or amendments to the introductory
section. No major changes have been made to the questionnaire
itself - this keeps the burden for FMIs low when they next update
their responses.

The questionnaire was developed in consultation with FMIs, FMI
participants and FMI oversight authorities. It covers general
information on the FMI and its legal structure; (the
rulebook/contractual provisions regarding termination; and
arrangements and operational processes to facilitate continued
access in resolution. It is designed to reduce the burden of
duplicative information-gathering efforts by streamlining the
collection of certain baseline information relevant to continuity
of access in resolution. The questionnaire aims to reduce the
"many to one" nature of inquiries from FMI participants
and authorities to FMIs for resolution planning and streamline the
provision of this information from FMIs to firms and authorities
through the use of a common template.

All FMIs are encouraged to complete the questionnaire and to
publish their responses, or to make them available in other ways to
FMI service users and resolution authorities to inform their
resolution planning.

The FSB emphasizes that if an FMI chooses not to complete the
questionnaire, it should be prepared to respond to its clients'
(and their resolution authorities') information requests within
reasonable deadlines as mutually agreed.

  FSB August 20, 2021

Continuity of Access to FMIs Services (FMI
Intermediaries) for Firms in Resolution: Framework for Information
from FMI Intermediaries to Support Resolution
Planning

In 2017, the FSB published its Guidance on Continuity of Access to Financial
Market Infrastructures for a Firm in Resolution
. The
Guidance sets out arrangements and safeguards to facilitate
continuity of access to FMI services for a firm in resolution with
a view to maintaining the firm's critical functions that rely
on the continued access to FMI services. As part of implementing
the Guidance, authorities and firms (as FMI service users) develop
plans to facilitate continuity of access in resolution. This
requires information about the nature of the FMI service user's
relationship with both FMIs and FMI intermediaries on the
arrangements and safeguards that would affect an FMI service
user's access to FMI services in the run-up to, and during, its
resolution.

The framework set out in this document seeks to help FMI
intermediaries better understand which information clients and
their RAs may need from them. It does so by providing an overview
of the baseline information that is potentially relevant for
clients and RAs, which they and FMI intermediaries can then
discuss, as needed, in their bilateral engagement. Thus, the
framework makes it more predictable for FMI intermediaries which
topics could be part of information requests from their clients
and/or from their clients' RAs. This could potentially allow
them to identify opportunities to streamline their response
process, reducing the resources required to provide this
information.

As part of their outreach, the FSB will host a webinar for
stakeholders on this Framework on September 16, 2021.
Representatives of FMI service providers, FMI service users and
authorities who would like to attend should contact [email protected]
for more details.

FSB August 18, 2021

Public Responses to Consultation on Policy Proposals to
Enhance Money Market Fund Resilience

On 30 June 2021, the Financial Stability Board (FSB) published
Policy proposals to enhance money market fund resilience:
Consultation Report
. Interested parties were invited to
provide written comments by August 16, 2021. The public comments
received are now available. The FSB expects to publish the final
policy proposals in October 2021.

 

Legislation

Canada Gazette, Part I, Volume 155, Number 34 August 18, 2021

Notice of Designation to the Canadian Payments
Association

The Canadian Payments Association (Payments Canada) operates
Lynx, Canada's modernized wholesale payment system, which will
be used for settling transactions from other financial market
infrastructures, reinforcing the Bank of Canada's policy
interest rate and processing high-value payments in the country.
Lynx is a system eligible to be designated under the Act since it
has at least three participants (at least one of which is a
Canadian participant and at least one of which has its head office
in a jurisdiction other than Ontario, where the Payments Canada
head office is located), clearing and settlement are all conducted
in Canadian dollars, and payment obligations that arise from the
system are ultimately settled through adjustments to the accounts
of participants at the Bank of Canada.

Pursuant to this Notice, the Governor of Bank of Canada
expresses the opinion that Lynx could be operated in such a manner
as to pose systemic risk and therefore should be designated as
subject to Part I of the Act. The Minister of Finance is of the
opinion that it would be in the public interest to designate
Lynx.

Accordingly, Lynx is hereby designated as a system that is
subject to Part I of the Payment Clearing and Settlement
Act
, effective as of the day that Lynx commences
operations.

  Canada Gazette, Part II, Volume 155, Number
17 August 5, 2021

Canadian Payments Association By-law No. 9 - Lynx:
SOR/2021-182

The Board of Directors of the Canadian Payments Association,
pursuant to subsection 18(1) of the Canadian Payments Act makes the
annexed Canadian Payments Association By-law No. 9 - Lynx.

  Canada Gazette, Part II, Volume 155, Number
17 August 4, 2021

Financial Consumer Protection Framework Regulations:
SOR/2021-181

Regulations to support the coming into force of the new
legislative framework, being the Financial Consumer Protection
Framework in the Bank Act, have been published in the Canada
Gazette

 

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