OSFI Structure and Operations

Table of Contents

About us

The Office of the Superintendent of Financial Institutions (OSFI) is an independent federal government agency that regulates and supervises some 400 federally regulated financial institutions and 1,200 pension plans to determine whether they are in sound financial condition and meeting their requirements.

Mandate

Fostering sound risk management and governance practices

  • OSFI advances a regulatory framework designed to control and manage risk.

Supervision and early intervention

  • OSFI supervises federally regulated financial institutions and pension plans to determine whether they are in sound financial condition and meeting regulatory and supervisory requirements.
  • OSFI promptly advises financial institutions and pension plans if there are material deficiencies, and takes corrective measures or requires that they be taken to expeditiously address the situation.

Environmental scanning linked to safety and soundness of financial institutions

  • OSFI monitors and evaluates system-wide or sectoral developments that may have a negative impact on the financial condition of federally regulated financial institutions.

Taking a balanced approach

  • OSFI acts to protect the rights and interests of depositors, policyholders, financial institution creditors and pension plan beneficiaries while having due regard for the need to allow financial institutions to compete effectively and take reasonable risks.

In fulfilling its mandate, OSFI supports the government’s objective of contributing to public confidence in the Canadian financial system.

Accountability and Governance

Various formal and informal processes enable OSFI to execute its mandate. For example, the Financial Institutions Supervisory Committee, which the Superintendent chairs, meets on a quarterly basis to facilitate the exchange of information relating to the supervision of federally regulated financial institutions. Members include OSFI, the Department of Finance, the Bank of Canada, the Canada Deposit Insurance Corporation and the Financial Consumer Agency of Canada. While the Department of Finance reports directly to the minister, OSFI and the others are arm’s-length agencies or Crown corporations, reporting to Parliament through the minister.

OSFI's accountability framework includes:

  • issuing an annual report and departmental plan
  • submitting financial statements and related control processes to an annual external audit
  • an external audit committee and internal audit group and audit reports
  • conflict of interest and code of ethics policies
  • consultations with the following before new rules are finalized:
    • financial institutions/industry
    • other relevant government agencies
    • subject matter experts 
  • appearing before Parliamentary committees to provide information on:
    • topics of interest
    • OSFI’s annual report and departmental plan
    • important assessments
  • conducting confidential surveys and consultations with key stakeholders to assess OSFI’s performance as a supervisor and regulator of federally regulated financial institutions
  • participating in reviews to determine whether OSFI is meeting internationally established standards for prudential regulators.

Governing Legislation

OSFI was established in 1987 by an Act of Parliament: the Office of the Superintendent of Financial Institutions Act (OSFI Act).

OSFI derives its powers from, and is responsible for administering, the following legislation:

  • Bank Act
  • Trust and Loan Companies Act
  • Cooperative Credit Associations Act
  • Insurance Companies Act
  • Pension Benefits Standards Act, 1985, and
  • all related regulations

These acts and regulations set out the rules for the structure and operation of federally regulated financial institutions and the standards for federally regulated private pension plans. The various acts address the unique aspects of the sectors each governs, and are designed to be consistent with each other.

Ministerial authority

OSFI reports to Parliament through the minister of Finance. Although the minister of Finance is responsible for OSFI, the Superintendent is solely responsible for exercising the authorities provided by the financial and pension legislation, and must report to the minister from time to time on the administration of legislation governing financial institutions and pension plans.

Who OSFI regulates and supervises

OSFI regulates and supervises some 400 financial institutions and some 1200 pension plans in Canada, including the following:

Deposit-taking institutions:

  • banks, including:
    • domestic banks
    • foreign banks
    • full-service foreign bank branches, and
    • foreign bank branches that provide only lending services
  • trust companies
  • loan companies
  • cooperative credit associations
  • cooperative retail associations

Insurance companies:

  • life insurance companies
  • fraternal benefit societies
  • property and casualty insurance companies
  • mortgage insurance companies

Private pension plans:

  • federally regulated private pension plans organized and administered primarily for the benefit of employees and former employees of organizations under federal jurisdiction, such as banking, inter-provincial transportation and telecommunications.

For a full list of institutions and pension plans, visit: Who We Regulate.

How OSFI regulates and supervises

OSFI regulates by developing rules, interpreting legislation and regulations and providing regulatory approvals for certain types of transactions. It also contributes to new accounting, auditing and actuarial standards. All of this must balance the goals of safety and soundness with the need for institutions to operate within a competitive marketplace.

OSFI supervises by analyzing financial and economic trends to identify emerging issues that could adversely affect institutions. It assesses an institution’s financial condition, material risks and the quality of its governance, risk management and compliance. When weaknesses are identified, OSFI intervenes early and works with executive management, boards and pension plan administrators to correct matters.

OSFI’s scope of regulation and supervision does not include consumer-related or market conduct issues, nor the investment/securities sector. These are the responsibility of other regulatory bodies or agencies, both federal and provincial.

OSFI Partners

OSFI works closely with its federal financial regulatory partners, including the Department of Finance, the Bank of Canada, the Canada Deposit Insurance Corporation and the Financial Consumer Agency of Canada. Together, these agencies collaborate regularly to share information on matters relating to the supervision of federally regulated financial institutions. These partners also meet to discuss financial sector policy issues.

OSFI also works with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), which is responsible for ensuring compliance with Canada’s Proceeds of Crime (money laundering) and Terrorist financing Act.

Collaboration and consultations with provincial counterparts and industry in Canada and abroad are a regular occurrence and help OSFI to understand and resolve potential issues.

International activities

International organizations such as the Financial Stability Board, the Basel Committee on Banking Supervision and the International Association of Insurance Supervisors play a key role in the development of regulatory frameworks for banks and insurers that contribute to a strong and stable global financial system. OSFI has earned a strong international reputation through its active participation in such international organizations, which allow it to share Canadian perspectives and help shape international rule setting.

Structure

OSFI employs some 800 people in offices located in Ottawa, Montreal, Toronto and Vancouver. It is organized into seven main sectors:

  • Superintendent’s Office
  • Internal Audit
  • Corporate Services and Transformation
  • Supervision
  • Policy, Innovation, and Stakeholder Affairs
  • Risk, Strategy, and Governance
  • Office of the Chief Actuary

Corporate Services and Transformation Sector

Corporate Services creates and implements the strategies that deliver enterprise-wide solutions that make the day-to-day operational activities of OSFI possible. Corporate Services leads our transformation and realization of foundational Blueprint elements in line with OSFI’s values.

Structure of the Corporate Services and Transformation Sector

Chief Financial Officer: OSFI’s CFO will create a new fully dedicated change management team that will provide greater structure and discipline around change management, ultimately improving the effectiveness of our efforts and strengthening OSFI’s change culture.

Divisions:

  • Finance
  • Procurement Services
  • Access to Information and Privacy
  • Enterprise Change Management

Chief Human Resources Officer: Human resources will be leading the Blueprint culture initiative and will build the foundation that will shape an inclusive and diverse culture and measure key culture performance indicators.

Divisions:

  • HR Operations
  • Corporate Programs and Development
  • Workplace effectiveness
  • Diversity Equity Inclusion and Culture

Chief Information Officer: IM/IT ensures the new technology environment is supported by a modern operating model, and a modernized suite of tools to supply our engaged and connected workforce.

Divisions:

  • Client Relationship Management IMIT Strategic Management
  • Enterprise Information Management
  • Application Services
  • Infrastructure and Technology Services
  • Cyber security

Chief Security Officer: The CSO will lead the PIVOT project and make rapid advances in our business continuity program.

Divisions:

  • Security
  • Facilities Services

Chief Transformation Officer: The CTO team are drivers of change who provide stewardship of the Blueprint initiatives. This team will ensure that interdependencies are known and understood; support horizontal collaboration; and support business leaders as they refocus our mandate to place greater emphasis on contributing to public confidence.

Supervision Sector

The Supervision Sector will supervise federally regulated financial institutions and pension plans through assessing and responding to financial and operational risks while making capital (and liquidity) adequacy assessments.

Structure of the Supervision Sector

Risk Advisory Hub: Oversees financial risk analysis functions, including related expertise for capital and liquidity adequacy assessments and advice on implementation of applicable guideline standards.

Risk Assessment and Intervention Hub: Leads supervisory functions for banking, insurance, and private pension plans.

Supervision Central Office: Responsible for all activities designed to support the internal operation of the Supervision Sector, including relevant management and corporate performance reporting and planning.

Supervision Methods, Standards, and Controls: Responsible for all activities designed to support the development and maintenance of supervisory techniques used in the robust assessment and control of supervisory risks.

Supervision Quality Assurance: Responsible for all activities designed to support the robust application of quality assurance across all of Supervision.

The Supervision Institute: Responsible for all activities designed to support the development of supervisory capabilities, including learning and development as well as an incubator for supervision technologies.

Policy Innovation and Stakeholder Affairs Sector

Policy and Innovation will complete the suite of policies in production related to Non-Financial Risks and develop a leading policy response to climate related risks that contributes to global confidence in the Canadian financial sector.

Stakeholder Affairs leverages a solid foundation in both RAD and Communications to develop a formal strategic stakeholder relations function to ensure that our positions are strategically and consistently conveyed to partners, stakeholders and the public.

Structure of the Policy Innovation and Stakeholder Affairs Sector

Accounting Policy: Identifies and influences changes to accounting or auditing standards that impact FRFIs and provide expert advice to supervision colleagues on accounting, auditing and capital disclosure issues.

Central Office: Provides continuous support in the areas of governance, planning, finance and people management to enhance operating effectiveness of key sector processes, reporting, and planning.

Climate Risk Hub: Leads an agile, proactive and pragmatic approach to setting expectations that compel FRFIs and FRPPs to prepare for managing their climate related risks.

Communications and Stakeholder Affairs: Leads the strategic, integrated approach to engaging with OSFI’s partners, stakeholders, and the public. Provide communications services and advice that integrates into the planning, management and evaluation of the work OSFI does.

Digital Innovation Impact Hub: Identifies the impacts of digitalization on FRFIs and lead the development of OSFI’s position with regards to risks associated with digitization.

Non-Financial Risk: Supports the development of innovative, risk based policy response to non-financial risks that support Supervision in the their risk assessment activities.

Regulatory Affairs and Strategic Policy: Develops and implements prudential and legislative guidance. Administers the federal financial institutions and pensions statutes primarily in relation to approvals, compliance and OSFI’s formal intervention tools.

Risk, Strategy, and Governance Sector

The Risk, Strategy, and Governance Sector ensures OSFI makes risk-intelligent decisions informed by:

  • Research and analytics of present and future risks impacting FRFIs and ourselves
  • Evolving data and analytics capabilities
  • A second-line challenge function underpinned by a comprehensive Enterprise Risk Management Framework
  • Support from a Strategy and Governance Office for consistency and alignment

Structure of the Risk, Strategy, and Governance Sector

Applied Risk Research and Analytics: Leads a centralized and dedicated applied research group to scan and report on the environment for emerging risks, regulatory developments and other relevant trends.  Develop stress testing tools and scenario analytics capacity to provide forward-looking risk surveillance.

Enterprise Risk Management: Leads OSFI’s enterprise risk management program, including an enterprise-wide risk appetite framework that defines the risks that we are consciously willing to take in the pursuit of our mandate.

Risk and Data Analytics: Transforms how OSFI collects, manages and drives value from data. Provides expertise, including oversight of data collection systems, data quality processes, data engineering routines, BI reporting and the increasing use of advanced analytics.

Strategy and Governance: Responsible for the development and implementation of OSFI’s strategic planning and performance measurement frameworks and reporting.

Office of the Chief Actuary

The Office of the Chief Actuary provides actuarial services and advice to the Government of Canada on federal social insurance programs, and federal public sector insurance and pension programs.

Structure of the Office of the Chief Actuary

Social Insurance Programs: Assists the Chief Actuary in providing to the minister of Finance or the minister of Families, Children and Social Development, statutory actuarial reports showing the costs, liabilities, and long-term financial projections for the CPP, OAS and the CSLP respectively. Other non-statutory actuarial services include actuarial estimates of costs and liabilities and long-term financial projections of any changes to these programs being considered by governments.

Public Sector Insurance and Pension Programs: Assist the Chief Actuary in providing to the president of Treasury Board or the minister of Finance, statutory actuarial reports on the costs, liabilities and long-term financial projections in respect of several insurance and pension programs covering the federal public service, the Canadian Armed Forces, the RCMP, federally appointed judges and members of Parliament. This section is also involved in providing actuarial advice and costing to assist various government departments in the design, funding and administration of these programs.