Phase 1 (Initial Readiness Assessment) information requirements for Entities with technologically innovative or emerging banking models

Thank you for your interest in the streamlined approvals framework for targeted new entrants. All interested entities are required to provide us with a written submission that must include the following Initial Readiness Assessment information requirements.

Once we receive the requested information, we will schedule an initial meeting to review. This is an opportunity to provide us with greater details on your business model and enable us to review governance, ownership structure, financial resilience and overall readiness.

General expectations

All applicants should:

• provide a self-assessment of readiness and eligibility (see Screening Criteria for Eligibility in the Streamlined Approvals Framework) before engaging with The Office of the Superintendent of Financial Institutions (OSFI).
• be prepared to proceed under a risk-based supervisory approach, including acceptance of the potential use of conditions, restrictions, or other mitigants at entry, as appropriate.

Ownership and Financial Strength

The applicant is expected to provide:

1. the name of the jurisdiction and date of incorporation or establishment of the applicant;
2. the current organization chart (with percentages owned) of the applicant's corporate group, including entities in which the applicant (and any of its parents that are not also applicants) beneficially owns 10% or more of the voting rights (indicate by an asterisk whether any of the entities shown on the chart operate in Canada, and provide a summary of these operations);
3. details regarding any voting agreement or other similar arrangements that involve persons exercising direct or indirect control over the applicant;
4. the names of all persons owning more than 10% of any class of shares or ownership interests in the applicant (and in any of its parents that are not also applicants), and the percentage of shares or ownership interests held (to the extent not already shown in the organization chart referred to in (b) above);
5. a summary of the current and proposed financial services and other key non-financial activities carried on by the applicant and its affiliates (other than the proposed Federally Regulated Financial Institution (FRFI)), including:
   1. those proposed to be provided by affiliates to the proposed FRFI,
   2. those proposed to be provided by the proposed FRFI to affiliates of the applicant
   3. a list of jurisdictions in which they operate, and
   4.  the nature and degree of regulatory oversight applicable to the financial services activities;
6. details of any shares or ownership interests of the applicant (and any of its parents that are not also applicants) that are held by a government or a political subdivision, an agent or agency thereof, together with a summary of its involvement in the operation and affairs of the applicant^{Footnote 1};
7. information that demonstrates that the applicant has, or has access to, the necessary resources to provide on-going financial support to the FRFI;
8. audited consolidated financial statements of the applicant (and of any of its parents that are not also applicants) for the last three years (balance sheet, income statement, statement of changes in shareholders' equity)^{Footnote 2};
9. a copy of the most recent report on the applicant (and on any of its parents that are not also applicants) issued by a recognized credit rating agency, if available;
10. details of whether the applicant (and any of its affiliates that are not also applicants) has been:
    1. denied a request to establish a financial institution or a branch in any jurisdiction; and
    2. the subject of any criminal proceedings or administrative sanctions.

Business Plan

The applicant is expected to provide a five‑year business plan that includes:

1. the reasons why the applicant is seeking to establish the proposed FRFI;
2. an analysis of target markets and opportunities that the proposed FRFI will pursue and the plans to address them;
3. an analysis of competitors, showing both challenges and opportunities, and plans to address them;
4. the reasons why the applicant believes that the proposed FRFI will be successful, and the overall strategy for achieving this success, including a discussion of key assumptions;
5. a detailed description of each line of business to be conducted by the proposed FRFI and the products and services to be offered, including how the lines of business interrelate;
6. for each year in the five-year business plan, details regarding the implementation of the Liquidity Adequacy Requirements, including on-going reporting on the Net Cumulative Cash Flow and Liquidity Coverage Ratio;
7. the risk-based capital and leverage ratios for each year of the five-year business plan, including a breakdown of key elements used to calculate those ratios on a Basel III basis^{Footnote 3};
8. five-year pro forma financial statements (base case) for the proposed FRFI, including balance sheet, income statement, details regarding key assumptions and an identification of major asset, liability, income and expense categories;
9. details regarding the proposed organizational structure including senior management reporting lines and key responsibilities within the organization;
10. details regarding the proposed composition of the board of directors and senior management, and details regarding any persons selected or sought for those positions;
11. an assessment of the applicant's categorization under the Small and Medium-Sized Deposit-Taking Institutions (SMSBs) Capital and Liquidity Requirements;
12. an initial exit strategy, including an outline of the steps that the applicant proposes to take to exit from the federal regulatory system in the event it is unable to execute its business plan.