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.
October 2016
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Institution |
Published |
Title and Brief Summary |
Status |
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Finance |
A second Act to implement certain provisions of the budget tabled in Parliament on March 22,2016 and other measures, Bill C-29 Division 5 of Part 4 (ss. 117-135) amends the Bank Act to consolidate and streamline provisions that apply to a bank or an authorized foreign bank in relation to the protection of customers and the public. It sets out the principles upon which the provisions are based as well as their purpose, and implements enhancements in the areas of corporate governance, access to basic banking services, disclosure of information, business practices and public reporting. It also makes a consequential amendment to the Financial Consumer Agency of Canada Act. |
Second reading |
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Financial Action Task Force (FATF) |
Guidance on Criminalising Terrorist Financing (Recommendation 5) This guidance paper explains the various aspects that the terrorist financing offence must cover in national legal systems. FATF Recommendation 5 provides measures to assist countries in fulfilling the legal requirements of the International Convention for the Suppression of the Financing of Terrorism, and relevant United Nations Security Council Resolutions. In addition, FATF Recommendation 5 goes beyond the international legal obligation to further strengthen the measures that countries should have at their disposal to disrupt terrorist financing. |
Effective |
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Financial Action Task Force (FATF) |
Guidance on Correspondent Banking Services new guidance explains the FATF's requirements in the context of correspondent banking services to manage, rather than avoid, the money laundering and terrorist financing risks associated with these business relationships. This guidance addresses one of the points of this action plan: the clarification of regulatory expectations. |
Effective |
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Finance |
The Government of Canada is reviewing the distribution of risk in Canada's housing finance system. This consultation paper seeks information and feedback on whether lender risk sharing would enhance the current housing finance system, and on elements critical to the development of a lender risk sharing policy. Lender risk sharing would require mortgage lenders to retain and manage a portion of loan losses on insured mortgages that default. |
Written comments should be provided by February 28, 2017. |
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Finance |
Published (Gazette) — October 15, 2016 |
Proposed By-law Amending the Canada Deposit Insurance Corporation Differential Premiums By-law The main objectives of the proposed Amending By-law are to amend the current By-law to address the two issues stated below:
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The proposed Amending By-law would come into effect for the 2017 premium year. |
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BIS/Basel [Applicable to banks] |
Final standard on total loss-absorbing capacity (TLAC) holdings The standard seeks to limit contagion within the financial system if a global systemically important bank (G-SIB) were to enter resolution. It reflects changes made following the public consultation, and includes the following elements:
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The standard will take effect 1 January 2019 for most G-SIBs. |
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BIS/Basel [Applicable to banks] |
Issued October 11, 2016 |
Regulatory treatment of accounting provisions IS released a consultative document and a discussion paper on the policy considerations related to the regulatory treatment of accounting provisions under the Basel III capital framework. The consultative document sets out the Committee's proposal to retain, for an interim period, the current regulatory treatment of provisions under the standardised and the internal ratings-based approaches for credit risk. The discussion paper discusses policy options for the long-term regulatory treatment of provisions under the new ECL standards. |
Comments on the proposals should be provided by 13 January 2017. |
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Finance |
Issued October 3, 2016 |
Building on measures announced in December 2015, the Government will:
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The "Mortgage rate stress test" applies to all insured mortgages effective October 17, 2016. The eligibility criteria for high-and low-ratio insured mortgages is effective November 30, 2016. |
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
