Office of the Superintendent of Financial Institutions consults on 2027 capital adequacy guideline revisions cutting standardized credit risk weights for ADC and certain corporate loans

The Office of the Superintendent of Financial Institutions has launched a 90-day public consultation on proposed revisions to the Capital Adequacy Requirements Guideline (2027), including changes to standardized credit risk and market risk capital requirements intended to better align requirements with underlying risks while reducing regulatory burden. For credit risk under the Standardized Approach, the draft recalibrates the treatment of land acquisition, development and construction (ADC) exposures by lowering the base risk weight for low-rise residential real estate from 150% to 130%, introducing a 90% risk weight for residential ADC (high and low-rise) where pre-sales are at least 75%, and allowing ADC projects with loan-to-values below 80% to be treated as mostly complete and risk-weighted as income producing commercial real estate where a certificate of occupancy has been issued. For corporate exposures, the draft reduces risk weights for Corporate Small and Medium Size Enterprise exposures and for unrated non-investment-grade corporate exposures under the Standardized Approach. Market risk revisions include updates to credit spreads and maturity assignments for cash equity positions and to ongoing monitoring and approval requirements. The consultation closes on February 18, 2026. OSFI expects to publish the final CAR Guideline (2027) in September 2026, with an effective date of November 1, 2026, or January 1, 2027 for institutions with a fiscal year ending October 31 or December 31, respectively.