Office of the Superintendent of Financial Institutions
On January 12, 2014, the Basel Committee on Banking Supervision (BCBS) issued the full text of the Basel III leverage ratio framework and disclosure requirementsFootnote 2 (the BCBS LR Framework). The BCBS LR Framework introduces a simple, transparent, non-risk based leverage ratio to act as a credible supplementary measure to the risk-based capital requirements and includes public disclosure requirements starting January 1, 2015.
This guidelineFootnote 3 provides clarification on the implementation of the BCBS LR Framework disclosure requirements for all institutionsFootnote 4 (LR disclosures) and builds on OSFI's April 2017 Pillar 3 Disclosure Requirements guideline.
All institutions should apply Part 2 and Part 3 of this guideline. Domestic Systemically Important Banks (D-SIBs) are required to make disclosures as described in Part 4 of this guideline. All other institutions ("non-D-SIBs") are required to make disclosures as described in Part 5 of this guideline.
Exemption from disclosures applies to institutions that continue to meet the exemption criteria outlined in OSFI's Pillar 3 Disclosure Requirements guideline.
OSFI requires institutions to fully implement the revised disclosures as described in this guideline in the first quarter of 2019. Institutions can disclose additional information at their discretion.
Disclosures are to be made at the same frequency as, and concurrently with, the publication of the financial statements. For those institutions that do not publish financial statements, the LR disclosures should be provided at the same frequency as the publication of their Pillar 3 disclosures.
Institutions must either disclose required information as described in Part 4 or Part 5 of this guideline within their published financial statements or, at a minimum, provide a direct link to the completed disclosures on their website. Institutions that do not publish financial statements must disclose required information with their other Pillar 3 disclosures as described in OSFI's Pillar 3 Disclosure Requirements guideline.
Institutions must make available on their website an ongoing archive of all reconciliation templates, disclosure templates and explanatory tables relating to prior reporting periods. Institutions are required to ensure public access to previously issued Pillar 3 disclosures for a minimum of 12 months; where institutions make investor information available for longer periods, the same archive period should also be used for Pillar 3 disclosures.
D-SIBs are required to publicly disclose:
Summary comparison table – D-SIBs are required to report the reconciliation of their balance sheet assets from their financial statements with the leverage ratio exposure measure, using the attached Reporting Table 1 in Annex I.
Common disclosure template – D-SIBs are required to provide a breakdown of the main leverage ratio regulatory elements, using the attached Reporting Table 2 in Annex I.
Reconciliation with public financial statements – D-SIBs are required to disclose the source of material differences between their total balance sheet assets (net of on-balance sheet derivative and securities financing transaction (SFT) assets) as reported in their financial statements and their on-balance sheet exposures in line 1 of the common disclosure template.
Other – D-SIBs are required to explain the key drivers of material changes in their Basel III leverage ratio observed from the end of the previous reporting period to the end of the current reporting period (whether the changes stem from changes in the numerator and/or from changes in the denominator).
Non-D-SIBs are required to provide a breakdown of the main leverage ratio regulatory elements using the attached Reporting Table 2 in Annex I.
All tables shown below have been extracted from and should be read in conjunction with the BCBS LR Framework and OSFI's Leverage Requirements (LR) guideline.Footnote 5
Table 1Footnote 6 : LR1 - Summary comparison of accounting assets vs. leverage ratio exposure measure for D-SIBs
The following provides the Basel LR Framework description (with references to OSFI's LR guideline) for each line item in Table 1:
D-SIBs should disclose the row numbers as indicated below to ensure that market participants can easily compare D-SIBs both nationally and internationally. Where there is no value in a box, the row can be reported as N/A or Nil but the row number must not change.
Table 2: LR2 - Leverage ratio common disclosure template for D-SIBs and non-D-SIBsFootnote 7
(Explanations of each row are provided on the following page)
Securities financing transaction exposures
Other off-balance sheet exposures
The following provides the Basel LR Framework description (with references to OSFI's Leverage Requirements Guideline) for each line item in Table 2.
Institutions should disclose the row numbers as indicated below to ensure that market participants can easily compare institutions. Where there is no value in a box, the row can be N/A or Nil but the row number must not change.
For institutions with a year end October 31st or December 31st, respectively.
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BCBS January 12, 2014: Basel III leverage ratio framework and disclosure requirements http://www.bis.org/publ/bcbs270.pdf
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Formerly the guideline entitled Public Capital Disclosure Requirements related to Basel III Leverage Ratio, last revised in December 2017.
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Banks and bank holding companies, to which the Bank Act applies; federally regulated trust or loan companies, to which the Trust and Loan Companies Act applies; and cooperative retail associations, to which the Cooperative Credit Associations Act applies; are collectively referred to as "institutions".
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OSFI's Leverage Requirements guideline: http://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/LR19.aspx
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Paragraph 52, BCBS January 12, 2014: Basel III leverage ratio framework and disclosure requirements http://www.bis.org/publ/bcbs270.pdf
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Page 12, Lines 1 to 22: BCBS January 12, 2014: Basel III leverage ratio framework and disclosure requirements: http://www.bis.org/publ/bcbs270.pdf.
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