OSFI’s annual supervisory letters

The Office of the Superintendent of Financial Institutions (OSFI) issues Annual Supervisory Letters to all federally regulated financial institutions as part of its ongoing oversight of more than 400 federally regulated financial institutions and 1,200 pension plans.

These letters are a tool for dialogue between OSFI and institutions, and part of OSFI's ongoing approach to communicating with regulated financial institutions. They provide tailored feedback to each institution based on its risk profile, operations, and governance.

Specifically, the letters communicate OSFI's assessment of an institution's risk profile, highlight supervisory issues, and outline expectations for improvement. They are a cornerstone of OSFI's principles-based supervisory approach, enabling early intervention and promoting sound risk management practices.

While these letters are not public, they play a critical role in guiding institutions on how to manage risks and meet regulatory expectations, and support OSFI's efforts to maintain the safety and soundness of Canada's financial system. They summarize OSFI's view of the institution's risk profile, outline supervisory expectations, highlight areas of for improvement, and suggest outcomes institutions are expected to achieve. For example, if OSFI sees weaknesses in a bank's risk governance or financial resilience, it will flag these in the letter and may communicate an expected outcome.

These letters also support OSFI's broader goals that may not be institution specific, but communicate perspectives on the general risk environment, reinforcing the messages in the Annual Risk Outlook and Semi-annual Risk Outlook.

While the letters are confidential, they are part of a transparent and collaborative process between OSFI and regulated institutions. Institutions are encouraged to engage openly with OSFI, share information, and take proactive steps to address concerns. This helps ensure that Canada's financial institutions remain strong, stable, and able to support the economy.

In short, annual supervisory letters are a normal part of OSFI's operations and contribute to OSFI's principles-based approach to regulation. They are a vital tool for maintaining trust in Canada's financial system. They help institutions understand where they stand, what risks they face, and how to improve—making the system safer for everyone.