Implementation Timeline for Basel III Operational Risk Capital Requirements
To: Banks, Bank Holding Companies, Federally Regulated Trust and Loan Companies
OSFI is revising its capital requirements for operational risk applicable to deposit-taking institutions (DTIs) to reflect the final Basel III reforms published by the Basel Committee on Banking Supervision (BCBS) in December 2017
This re-alignment provides several benefits including additional time to clarify reporting instructions with the objective of ensuring a consistent interpretation of the revised requirements. It also aligns with the expected implementation date of the revised capital and liquidity requirements for small and medium-sized institutions (SMSBs).
DTIs that previously used the Advanced Measurement Approach (AMA) for operational risk capital purposes should continue to use the Standardized approach
Further consultation related to the 2022 domestic implementation of the final Basel III reforms, through OSFI’s Capital Adequacy Requirements (CAR) for operational risk and credit risk, and the Leverage Requirements Guideline, will take place in late spring 2020. This consultation, in addition to OSFI’s recently issued consultative document on SMSB capital and liquidity requirements, will provide more detail on the expected operational risk capital requirements that will apply to DTIs starting in 2022.
Questions concerning the transition to OSFI’s revised operational risk capital requirements should be addressed to Neil Colligan in OSFI’s Capital Division by e-mail at firstname.lastname@example.org.
Assistant Superintendent, Regulation Sector