Office of the Superintendent of Financial Institutions
The Office of the Superintendent of Financial Institutions (OSFI) announced earlier this year that it will supervise the governance and internal controls surrounding banks’ Canadian Dollar Offered Rate (CDOR) submission processes.
On May 30, OSFI published for comment a draft version of the Guideline E-20, which is intended to assist CDOR submitting banks in establishing strong governance and controls in order to maintain confidence in CDOR as a robust interest benchmark in Canada.
Following a review of industry comments, OSFI is now issuing the final version of its Guideline on CDOR Benchmark-Setting Submissions. The annex to this letter summarizes key comments received from the public and provides an explanation of how these issues were dealt with in the final Guideline. Full implementation of the Guideline by CDOR submitting banks is expected no later than December 31, 2014.
OSFI will contact each submitting bank to discuss the supervisory work that will underpin this Guideline, including the nature of information that will be reviewed by OSFI and the frequency with which banks will be expected to provide such information.
Lastly, OSFI notes that the industry is working to strengthen governance of CDOR in order to meet principles established by International Organization of Securities Commissions. For example, the industry has released a submitters’ code of conduct and announced the beginning of its process to establish an administrator for CDOR.
Questions concerning Guideline E-20 should be addressed to Philipe A. Sarrazin, Managing Director, Legislation and Policy Initiatives at 613-998-4190, or by email at email@example.com.