The Office of the Superintendent of Financial Institutions (OSFI) has released a revised policy plan on its guidance for and supervision of federally regulated banks, life insurance companies and not-for-profits offering insurance products. OSFI superintendent Peter Routledge issued an open letter on Monday.
“This approach is agile, targeted, transparent and risk-based, while ensuring Canada’s resilient financial system delivers stronger outcomes for economic growth,” Routledge wrote. “To be clear, this is not about doing less — it’s about doing things smarter.”
The letter laid out three steps OSFI is taking on policy and guidance.
OSFI is delaying the release of its draft Corporate Governance and Accountability Guideline so it can produce a more narrowly targeted document on board and senior management accountability. A consultative document is scheduled for January.
The regulator is pushing revisions to the Life Insurance Capital Adequacy Test Guideline out past 2028. It has also delayed the reduction of capital requirements for domestic infrastructure debt and equity, provided OSFI criteria are met.
In January, OSFI will begin a consultation to “streamline and clarify” guidance on credit risk management in key lending areas.
On the supervisory front, OSFI is reducing the scope and changing the scheduling of information requests and reviews. It is also cancelling some of the data collection projects it undertook prior to the Covid pandemic.
“This effort contributes to the Government of Canada’s Red Tape review by continuing to modernize our policies, guidance and supervision; removing unnecessary burden; and aligning our oversight with the key risks at the right time,” Routledge wrote. “These changes do not jeopardize the safety and soundness of Canada’s financial system. Rather, they simplify and focus our regulatory and supervisory expectations.”
The Red Tape review launched in July, and will be overseen by the recently created Red Tape Reduction Office.