If institutions are having difficulties with particular aspects of the requirements related to GSAs, they may reach out bilaterally to OSFI to discuss them. It should be noted, however, that a debt cushion approach is not permitted under the FIRB approach. Under section 4.1.16, the proposed requirement to apply a 1.5 risk-weight multiplier for certain exposures with currency mismatch would involve considerable resources to change front-end systems. The challenges are further amplified by setting a threshold of where more than 10% of the borrower’s income, without a natural or financial hedge, used to qualify for the loan is denominated in a foreign currency.
- OSFI has assessed this risk to be relatively low and as such, to reduce operational burden, the 1.5 risk-weight multiplier for currency mismatch will only apply to residential real estate exposures.
- Stakeholders requested that OSFI consider permitting signposting to the shareholder proxy circular in place of disclosing Table REMA and Templates REM1-3.
- Stakeholders requested that interest rate and inflation swaps (and correlation between the two) sets be given cross-hedging set correlations consistent with the SA-CVA framework.
- Some files or items cannot be translated, including graphs, photos and other file formats such as portable document formats (PDFs).
- Institutions should nonetheless have a framework in place that outlines their process to report intra-period LCRs and NCCFs.
- The implementation date of the revised CVA risk and the market risk chapters of the CAR Guideline (i.e., Chapters 8 and 9) will be fiscal Q1-2024Footnote 2.
The timing of the shareholder proxy circular’s release, after the reporting of the financial fiscal year ending October 31, would provide users with more relevant, clear, and meaningful information. In the final Pillar 3 Disclosure Guideline for D-SIBs, Template ENC accommodates off-balance sheet amounts. D-SIBs may signpost to their current asset encumbrance disclosures developed through EDTF in place of Template ENC.
Credit Ratings
?? Our team has worked hard to ensure that our platform delivers fast and reliable performance, so it’s great to know that it has met your expectations. We understand the importance of a seamless trading experience, and we’re committed to providing a platform that you can rely on. Thank you for choosing IronFX, and we look forward to continuing to support your trading journey! Whether you’re a beginner or an experienced trader, we strive to provide a welcoming and suitable trading environment for everyone.
Several technical questions were received from stakeholders related to intraday liquidity. Institutions subject to the Comprehensive NCCF will be required to report undrawn amounts according to the credit quality of clients. Stakeholders asked whether OSFI has a tentative timeline for the implementation date of the intraday monitoring tools (Chapter 7). OSFI notes that the text in Chapter 9 aims to show one example for equity derivatives products within the category of positions with non linear positions.
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OSFI does not see any unintended consequences from this treatment and it is not an oversight despite the Basel III rules. Paragraph 286 has been updated to reflect all 32 publicly available cities, and a list of the 32 cities has been included in Appendix 5-3. For loans outside that list of 32 cities, please use the composite-11 index. This requirement for seasoning related legacy fx reviews to LGD is simply stating that if there is evidence of seasoning effects (e.g., evidence that LGDs peak several years after default), estimates should be adjusted to account for the identified seasoning effects. OSFI does not believe a similar change is required to Chapter 4 for IPCRE since CRE projects often rely on income generated by the property for repayment.
Furthermore, any required investigation into backtesting breaches typically includes investigation into specific risk factors within the class for relevant desk level breache. The rules text allows for the exemption from market risk capital requirement for hedges of xVA risk whereby a market standard is well established and more or less consistently used. OSFI feels that there has not been sufficient convergence in market practice for hedging other areas of xVA risk to permit these hedges to be exempted from market risk capital requirements. Regarding paragraph 348, under the FIRB there is no capital incentive for a lender to establish security as a first lien lender if the collateral does not meet the narrow requirements currently outlined.
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Stakeholders requested that IRT requirements should only apply to IRTs executed on or after the start of the year of FRTB implementation (i.e. November 1, 2023 for institutions with an October 31 fiscal year end). Stakeholders pointed to a need for grandfathering of legacy trades which has become more pronounced as a result of pandemic-related changes in the industry. Existing IRTs extend well beyond the implementation date of the FRTB due to the ALM structure at Canadian institutions. Further, the pandemic has triggered a surge in surge in deposits/loans and consequent hedging requirements which mature well beyond Q1 2024. Repo-style transactions that are (i) entered for liquidity management or (ii) valued at accrual for accounting purposes are not part of the presumptive list.
Feel free to explore our services further and don’t hesitate to reach out if you have any questions at ??IronFX ??Solid Trading. Guideline B-6 Liquidity Principles disclosure requirements will remain applicable for SMSBs upon the implementation of Pillar 3 Disclosure Requirements for SMSBs. OSFI will ensure the final Pillar 3 Disclosure Guideline for SMSBs will reference Guideline B-6. Stakeholders requested that OSFI consider permitting signposting to the shareholder proxy circular in place of disclosing Table REMA and Templates REM1-3.