On December 5, OSFI held its fall Industry Day, which served as a technical briefing on regulatory measures released on November 21^st.  

OSFI shared the results from the first phase of its Policy Review where OSFI will rescind 20 guidelines and regulatory advisories. This ongoing initiative aims to ensure OSFI’s guidance remains current, fit-for-purpose, and able to adapt to emerging risks. OSFI also announced its intention to develop two new guidelines on risk management and board governance, which will enable OSFI to rescind more overlapping regulatory guidance in the future.  

Regulatory changes include: 

• Minimum Qualifying Rate (MQR) Industry Letter: OSFI has announced that the prescribed Minimum Qualifying Rate (MQR) for uninsured straight switches between FRFIs at renewal is no longer required. OSFI has confirmed that this stress test exemption only applies to transfers “from one federally regulated lender to another,” and that the stress test will still apply to uninsured mortgages that are either originated by or transferred to non-FRFIs such as provincially regulated credit unions. As OSFI only regulates FRFIs, the relaxation of the straight switch expectation is limited to one FRFI to another to ensure consistent regulatory oversight, particularly under OSFI's B-20 guidelines. The uninsured mortgages are considered to be a small portion of the market. For more information, click here.  

• Revised Regulatory Notice on Commercial Real Estate (CRE) Lending: The first CRE notice was published in 2023, and this updated notice clarifies and reinforces expectations around forbearance practices for CRE lending. OSFI recognizes the importance of working constructively with CRE borrowers facing temporary financial difficulty; however, FIs should not “extend and pretend” or use forbearance to mask or delay taking necessary action to mitigate risk. Click here for more information.  

• Regulatory Notice on Culture Risk Management: This notice sets expectations for managing culture risk in governance and enterprise-wide culture management. Since 2015, OSFI has consulted the industry on three separate occasions to develop a culture risk guideline; however, OSFI ultimately settled on a regulatory notice. The notice offers the flexibility to include the information it contains in a future guideline and rescind it. The notice is also more succinct than previous drafts. For more information, click here.  

• Final Liquidity Adequacy Requirements (LAR) Guideline: The revised LAR updates monitoring tools used to address intraday liquidity risk, introduces a new regulatory return, and updates the treatment of Banker’s Acceptances. In the consultation, OSFI proposed that indirect clearers would submit an abbreviated monthly return, whereas direct clearers in Lynx would submit a full monthly return. CCUA advocated that indirect clearers should be granted reporting relief, and OSFI supported that request as many SMSBs are required to pre-fund payments. It also shifted the reporting frequency from monthly to quarterly, and the spring implementation will be delayed to November 2025. However, many of the tools will continue to be applicable to all FRFIs. Click here for more information.  

OSFI also announced finalization of the Life Insurance Capital Adequacy Test (LICAT) Guideline,  the Mortgage Insurer Capital Adequacy Test (MICAT) Guideline, and the International Financial Reporting Standard (IFRS) 17 Guideline.