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Perspectives

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Federal Financial Institutions Legislative and Regulatory Reporter — January 2019

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.

January

Institution

Published

Title and Brief Summary

Status

OSFI
[Banks, Foreign Bank Branches, Bank Holding Companies, Trust and Loan Companies, Cooperative Retail Associations, Life Insurance Companies, Property and Casualty Insurance Companies, Insurance Holding Companies]

January 24, 2019

Technology and Cyber Security Incident Reporting

The advisory Technology and Cyber Security Incident Reporting sets out OSFI’s expectations for federally regulated financial institutions (FRFIs) with respect to the reporting of technology and cybersecurity incidents affecting FRFI operations. The advisory describes characteristics of incidents that should be reported to OSFI, in addition to initial notification and subsequent reporting requirements.

This Advisory will supersede any prior instructions for technology and cybersecurity incident reporting. In the meantime, FRFIs are expected to continue reporting any major incidents according to previous instructions communicated by their Lead Supervisors.

Effective on March 31, 2019.

FINTRAC

January 18, 2019

What is a suspicious transaction report?,Reporting suspicious transactions to FINTRAC,Money laundering and terrorist financing indicators

When there are reasonable grounds to suspect that a transaction or an attempted transaction is related to the commission or attempted commission of a money laundering (ML) or terrorist financing (TF) offence, individuals and entities must submit a suspicious transaction report (STR). These STR guidance pieces provide a detailed explanation of the requirements and all three should be read in conjunction with each other.

What is a suspicious transaction report?explains the value of STRs to FINTRAC and explains the steps that can be taken to determine if there are reasonable grounds to suspect that a transaction is related to ML or TF.

Reporting suspicious transactions to FINTRA Cexplains in detail the steps that need to be taken in order to submit STRs to FINTRAC. This guidance includes details on how to complete the narrative section of an STR as well as highlights common problems to avoid.

The STR guidance pieces replace, respectively,Guideline 2: Suspicious transactions,Guideline 3A: Submitting Suspicious Transaction Reports to FINTRAC electronically and Guideline 3B: Submitting Suspicious Transaction Reports to FINTRAC by paper.

Effective

BIS

January 14, 2019

Minimum capital requirements for market risk

The January 2016 standard has been revisedto address issues that the Basel Committee identified in the course of monitoring the implementation and impact of the framework.

Revisions include the following key changes:

  • a simplified standardized approach for use by banks that have small or non-complex trading portfolios;
  • clarifications on the scope of exposures that are subject to market risk capital requirements;
  • refined standardized approach treatments of foreign exchange risk and index instruments;
  • revised standardized approach risk weights applicable to general interest rate risk, foreign exchange and certain exposures subject to credit spread risk;
  • revisions to the assessment process to determine whether a bank's internal risk management models appropriately reflect the risks of individual trading desks; and
  • revisions to the requirements for identification of risk factors that are eligible for internal modelling.

Effective on January 1, 2022.

Finance Canada

January 11, 2019

A Review into the Merits of Open Banking: Consultation document

This paper seeks stakeholder views on the following questions:

  • Would open banking provide meaningful benefits to and improve outcomes for Canadians? In what ways?
  • In order for Canadians to feel confident in an open banking system, how should risks related to consumer protection, privacy, cybersecurity and financial stability be managed?
  • If you are of the view that Canada should move forward with implementing an open banking system, what role and steps are appropriate for the federal government to take in the implementation of open banking?

Comments should be provided by February 11, 2019.


Disclaimer

This Reporter is prepared as a service for our clients. It is not intended to be a complete statement of the law or an opinion on any subject. Although we endeavour to ensure its accuracy, no one should act upon it without a thorough examination of the law after the facts of a specific situation are considered.

To view the Reporter for previous months, please visit our Banking and Financial Services publications page.

  • Par : Jeffrey S. Graham