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Appendix
Disclosure of Information

Under the OSFI Act, the Superintendent is required to report to Parliament each year on the disclosure of information by financial institutions and the progress made in enhancing the disclosure of information in the financial services industry.

OSFI promotes effective disclosure by: publishing selected financial information on OSFI’s external website (and through Beyond 20/20 Inc. for federally regulated insurance companies only – see OSFI’s website under Financial Institutions/Financial Data); providing guidance to federally regulated financial institutions (FRFIs) on their disclosures; and, participating in international supervisory groups with similar objectives.

Public Disclosures Associated with Building a More Stable Future

Public disclosures of risk management practices and risk exposures made by FRFIs have become a significant focus to achieving transparency, financial stability and restoring market confidence since the global financial crisis. Over the past few years, publications released by international organizations, such as the Financial Stability Board (FSB), the European Banking Authority, and the Basel Committee on Banking Supervision (BCBS) have stressed the need for enhanced risk disclosures. OSFI believes that strong disclosures and market discipline are key elements for effective corporate governance and sound risk management practices within an institution.

During 2014-2015, OSFI focused on issuing guidance for several disclosure projects which included:

  • April 2014 – revisions to Public Disclosure Requirements related to Basel III Pillar 3 composition of capital, to accommodate Credit Valuation Adjustment (CVA) phase-in
  • July 2014 – issuance of the final Guideline D-11: Public Disclosure Requirements for Domestic Systemically Important Banks on Liquidity Coverage Ratio
  • September 2014 – issuance of the final Guideline D-12: Public Disclosure Requirements related to Basel III Leverage Ratio

OSFI has also participated as a member of the Working Group on Disclosures subgroup of the BCBS on recent Pillar 3 disclosures initiatives and will be working on the domestic implementation of the BCBS Revised Pillar 3 Disclosure Requirements standard issued in January 2015.

Financial Stability Board Guidance

In October 2012, the Enhanced Disclosure Task Force (EDTF), established by the FSB, issued 32 recommendations to improve risk disclosures. Since then, OSFI has worked closely with Canada’s six major banks (designated as domestic systemically important banks) to implement the 32 EDTF recommendations and performed quarterly reviews of the six major banks’ public disclosures to monitor the progress of implementation. The six major banks, as highlighted by the EDTF in its 2014 progress report, made substantial improvements to risk disclosures and achieved virtually full compliance with the 32 EDTF recommendations by 2014.

OSFI expects the six major banks to adopt future disclosure recommendations in the banking arena that are endorsed by international standard setters and the FSB, as well as evolving domestic and international bank risk disclosure best practices.

OSFI is committed to continuing to improve public disclosures in order to promote safety and soundness in the way institutions conduct business, and contribute to public confidence in the Canadian financial system. OSFI will continue to support disclosure initiatives through its membership in international associations and through reviewing our domestic disclosure requirements and practices.