Canada’s Office of the Superintendent of Financial Institutions (OSFI) has confirmed that a new framework for supervision will come into force on 1st April 2024.
The new framework will guide OSFI’s supervision of federally regulated financial institutions (FRFIs) and private pension plans.
OSFI says that the new framework is the most significant change to OSFI’s supervisory approach in 25 years. New items in the Supervisory Framework include:
- Expanding the current 4-point risk rating scale to an 8-point scale which will provide an earlier indication to FRFIs of changes in OSFI’s risk assessment of their organizations;
- Including more information for FRFIs about the drivers of their risk rating; and
- The introduction of new risk assessment categories: business risk, financial resilience, operational resilience, and risk governance, together with the integration of climate risk considerations.