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ARTICLE · 18 JUNE 2020

OSFI Updates Its COVID-19 Guidance On Dividend Increase Restriction

Blake, Cassels & Graydon LLP
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On June 11, 2020, the Office of the Superintendent of Financial Institutions (OSFI) updated its COVID-19 FAQs to address the dividend increase restriction applicable to federally ...

CanadaFinance and Banking
Paul Belanger
Paul Belanger
Ora Morison
Ora Morison
Vladimir Shatiryan
Vladimir Shatiryan
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On June 11, 2020, the Office of the Superintendent of Financial Institutions (OSFI) updated its COVID-19 FAQs to address the dividend increase restriction applicable to federally regulated deposit-taking institutions and federally regulated insurers.

As part of the regulatory measures OSFI has taken to address issues stemming from COVID-19, OSFI announced on March 13, 2020 that it expected federally regulated financial institutions (FRFIs) to halt dividend increases and share buybacks (Dividend Restriction). The updated FAQs provide more detailed information on this restriction. Specifically, the FAQs address the following:

WHAT IS A DIVIDEND INCREASE?

OSFI defines a dividend increase as an increase in the total dollar amount of dividends paid after March 13, 2020 compared with the last approved regularly scheduled dividend (be it quarterly or less frequent) that occurred prior to March 13, 2020. A regularly scheduled dividend is a cash payment by a FRFI - a

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