OSFI Announces New Guidelines To Manage Third Party Risks

The Office of the Superintendent of Financial Institutions (OSFI) has released its Guideline B-10 – Third-Party Risk Management ("Guideline") for all federally regulated financial institutions (FRFIs), excluding foreign bank branches and foreign insurance company branches. The Guideline sets out OSFI's third-party risk management expectations for FRFIs and places emphasis on governance and risk management programs. The measures are intended to enable FRFIs to manage and oversee third-party relationships effectively.

Background

Since 2001, OSFI has provided guidance on outsourcing activities to FRFIs in its Guideline B-10: Outsourcing of Business Activities, Functions and Processes (revised in 2003 and 2009) ("Previous Guideline"). The Previous Guideline only applied to outsourcing activities and provided guidance for FRFI's risk management processes and contractual terms with outsourcers.