Revised OSFI Capital Ruling for Limited Recourse Capital Notes

Document Properties

  • Type of Publication: Capital Ruling
  • Category: Capital
  • No: 2020 – 01
  • Date: March 15, 2021
  • To: Federally Regulated Financial Institutions (FRFIs)

OSFI has published an update to its July 18, 2020 capital ruling on the Limited Recourse Capital Notes (LRCNs). The revised ruling now addresses LRCN issuances from institutions of all sizes and across different industry sectors.

The revisions include a number of clarifications to the ruling’s conditions and limitations, which are part of OSFI’s prudent approach to assessing the quality and quantity of financial instruments used as regulatory capital. This is consistent with our mandate to protect the rights and interests of depositors, policyholders and financial institution creditors, while also allowing financial institutions to compete effectively and take reasonable risks.

The ruling continues to conclude that federally regulated financial institutions may recognize the LRCNs as regulatory capital subject to the capital treatment, conditions and limitations set out in the revised ruling.

Should you have any questions, please contact

Yours sincerely,

Ben Gully
Assistant Superintendent
Regulation Sector