Office of the Superintendent of Financial Institutions
OSFI is releasing for consultation two documents on the proposed management of operational risk capital dataFootnote 1 for
institutions required, or those applying, to use the Basel III Standardized Approach for Operational Risk
(“SA”) capital in Canada:
The DME outlines data management principles that OSFI expects institutions using the SA to adhere to, which
includes the Basel Committee on Banking Supervision’s Principles for Effective Risk Data Aggregation and Risk Data
Reporting (“RDARR”). The AT summarizes OSFI’s detailed expectations based on
Chapter 3 of the draft Capital Adequacy Requirements GuidelineFootnote 2, RDARR principles, and the DME. Together,
the DME and AT aim to ensure that institutions have effective management of current and historical operational risk
In addition, OSFI has reviewed the existing implementation notes and self-assessment templates for institutions
using TSA/AMA in light of the new requirements for the Basel III SA. Many of the qualifying requirements for TSA/AMA
(e.g., scenario analysis, external data, business environment and internal control factors etc.) are not part of the
new SA, which uses internal operational loss data as a direct input as part of the capital charge calculation.
Moreover, many of the operational risk management expectations found in the implementation notes have been updated
and incorporated into other Basel standards as well as OSFI guidance (e.g., Guideline E-21: Operational Risk
management; and the Corporate Governance Guideline).
As such, we are proposing to rescind the existing governanceFootnote 3 and data maintenanceFootnote 4 implementation notes
for AMA/TSA institutions as well as the TSA & AMA Self-assessment TemplateFootnote 5 upon implementation of
the revised CAR guideline in 2023. These would be replaced by the aforementioned proposed DME and related AT.
Please provide comments on the DME and AT by July 30, 2021. Questions and comments may be addressed via email at email@example.com.
Risk Support Sector
Operational Risk Capital data includes internal operational risk loss data and the components of the
Business Indicator that are used to calculate operational risk capital.
Return to footnote 1
Draft CAR Chapter 3 -
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on governance expectations (2006)
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on data maintenance principles for operational risk (2006)
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TSA & AMA self-assessment
template. The template is divided into two worksheets: Operational Risk Management (“ORM”)
Practices and AMA Methodology.
Return to footnote 5