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FSRA Launches Consultation on Proposed Rules for Credit Unions and Caisses Populaires

·2-min read

TORONTO, June 14, 2021 /CNW/ - The Financial Services Regulatory Authority of Ontario (FSRA) is consulting on three rules to make supervising Ontario's credit unions and caisses populaires more transparent and effective.

FSRA logo (CNW Group/Financial Services Regulatory Authority of Ontario)
FSRA logo (CNW Group/Financial Services Regulatory Authority of Ontario)

The proposed rules strengthen the sector and better align to international standards.

Proposed Rule – Sound Business and Financial Practices
The Proposed Rule introduces a principles-based approach to business and financial practices by setting outcomes for:

  • Member governance

  • Board of Directors governance

  • Senior management

  • Operational management

  • Internal audit, compliance, and finance functions

  • Enterprise risk management

  • Subsidiary governance

The Proposed Rule will replace Deposit Insurance Corporation of Ontario (DICO) By-Law No. 5.

Proposed Rule – Capital Adequacy for Credit Unions and Caisses Populaires
The Proposed Rule is expected to improve risk sensitivity and resiliency. It sets new requirements for:

  • Calculating capital ratios and supervisory minimums (Tier 1 and Tier 2 Capital, Risk Weighted Assets, Capital Conservation Buffer, Total Capital Ratio, and Leverage Ratio)

  • Credit, Operational, and Market Risk

  • Internal Capital Adequacy Assessment Process

Proposed Rule – Liquidity Adequacy for Credit Unions and Caisses Populaires
The Proposed Rule is more clear, transparent, and closely aligned to international standards. It sets new requirements for:

  • Diversification of Funding

  • Calculating and Reporting of Liquidity Ratios: Liquidity Coverage Ratio, Net Stable Funding Ratio, and Net Cumulative Cash Flow

  • Internal Liquidity Adequacy Assessment Process

All three rules will be made under the new Credit Unions and Caisses Populaires Act, 2020, once proclaimed into force.

FSRA invites comments from June 14, 2021 to September 14, 2021.

During the consultation period, FSRA is hosting a technical briefing on all three rules on June 24, 2021. Learn more and sign up here.

Learn more:

The Financial Services Regulatory Authority of Ontario (FSRA) is continuing to work with those we regulate to ensure financial safety, fairness and choice for consumers and members. Learn more at https://www.fsrao.ca/.

SOURCE Financial Services Regulatory Authority of Ontario

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View original content to download multimedia: http://www.newswire.ca/en/releases/archive/June2021/14/c8628.html

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