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ARTICLE · 12 JULY 2019

OSFI Proposes Changes To The Foreign Bank Branch Deposit Requirement

The Office of the Superintendent of Financial Institutions has proposed revisions to Guideline A-10, the "Foreign Bank Branch Deposit Requirement", formerly known as the Capital Equivalency Deposit.

CanadaFinance and Banking

The Office of the Superintendent of Financial Institutions (OSFI) has proposed revisions to Guideline A-10, the "Foreign Bank Branch Deposit Requirement", (the Guideline), formerly known as the Capital Equivalency Deposit. The revisions to the Guidelines address regulatory standards for authorized foreign banks' minimum deposit to be held in trust.

The revisions include changes to the Guideline "to reflect current practices." A simplification of the Guideline will provide users with greater certainty and clarity of meeting OSFI's requirements. The second key adjustment is to the current foreign bank branches (FBB) deposit ratio calculation. Specifically, the adjustment will no longer consider off-balance sheet liabilities and will now include accrued expenses. The current deposit ratio calculation requires a percentage of liabilities to be factored in, and the proposed changes will likely reduce the total liabilities listed by FBBs.

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